Financial Crime World

Belgium Cracks Down on Financial Crime: AML/CTF Regulations and Compliance Obligations

Belgium’s commitment to combating money laundering (ML) and terrorism financing (TF) within its financial system is highlighted by the Belgian Financial Intelligence Processing Unit (CTIF-CFI). This administrative body, established under the Law on the prevention of money laundering and terrorism financing and on the restriction of the use of cash (AML Law) in 2017, plays a crucial role in Belgium’s efforts.

Role of CTIF-CFI

CTIF-CFI is responsible for:

  • Processing and disseminating financial intelligence to support investigation, prevention, and prosecution efforts against ML and TF.

The Financial Services and Markets Authority (FSMA), acting as a supervisory authority, ensures that financial institutions comply with AML/CTF regulations set by the AML Law.

Compliance Obligations for Financial Institutions

Financial institutions in Belgium must adhere to specific regulations to ensure compliance with the AML Law. Here’s a summary:

Internal Controls

  1. Risk management procedures
  2. Customer and transaction due diligence
  3. Suspicious activity reporting
  4. Record-keeping
  5. Internal control
  6. Compliance management systems

Designated Personnel

  1. Compliance officer
  2. AML Law overseer
  3. Staff responsible for AML policies and procedures

Reporting Violations

Providing an impartial, anonymous channel for employees to report potential AML Law breaches is essential.

Overall Risk Assessment

Identifying and evaluating ML/TF risks.

Customer Due Diligence

Verifying identities and conducting due diligence on beneficial owners as per the AML Law.

Record-Keeping

Maintaining records of the aforementioned information for ten years following the end of a commercial relationship or the occurrence of a rare transaction.

Reporting Suspicious Transactions

Regulated entities must report any suspicious transactions to CTIF-CFI. This includes:

  • Transactions suspected of being related to ML or TF.
  • Transactions from entities operating within an EU Member State but lacking a subsidiary, branch, or other establishment there.

By strictly enforcing these regulations, Belgian authorities aim to minimize opportunities for criminals to exploit the financial system for illicit gains or terrorist activities.