Financial Crime World

Belgium’s Robust Financial Compliance Framework: Navigating AML/CFT Regulations for Businesses

Belgium, known for its vibrant economy and influential position in Europe, faces an escalating threat from financial crimes, including money laundering and terrorism financing activities. In 2021, the Financial Intelligence Unit (FIU) of Belgium recorded a staggering 46,000 suspicious transactions – a 50% surge from the previous year. To counteract these threats and maintain global anti-money laundering (AML) and counter-financing of terrorism (CFT) efforts, Belgium has established a comprehensive regulatory framework and assigned designated authorities to oversee compliance.

Understanding AML Regulations in Belgium

If you’re planning to set up or expand your business in Belgium, being aware of how the country’s AML regulations will impact your organization and the necessary steps to mitigate risks is essential.

Belgium’s AML Regulators

The Financial Services and Markets Authority (FSMA)

Established in 2011, Belgium’s primary financial regulator is the FSMA. This authority is responsible for overseeing the supervision of financial products and services, ensuring compliance with financial conduct rules, and monitoring markets and distributed financial information. The FSMA collaborates with the National Bank of Belgium (NBB) and the Federal Public Service Economy to ensure transparency, fairness, and orderly operations within Belgium’s markets [1].

  • Responsibilities: The FSMA’s role encompasses supervising financial institutions, providing regulatory guidance, and enforcing sanctions for non-compliance.
  • Collaboration with other Authorities: The FSMA partners with national and international financial organizations to represent Belgium on the global financial stage and adhere to international financial crime agreements.

The Financial Intelligence Processing Unit (CTIF)

To comply with the Financial Action Task Force (FATF) and EU directives, Belgium has established a financial intelligence unit (FIU) named the CTIF. The CTIF collects and processes AML/CFT data, including suspicious transaction reports (STR), to provide law enforcement agencies with actionable intelligence for ongoing investigations [2].

  • Collaboration with Other FIUs: The CTIF collaborates with counterpart FIUs in other countries to enhance cross-border financial crime investigations and prosecutions.

Key AML Regulations in Belgium

Belgium’s primary AML/CFT legislation is the Law of 18 September 2017 on the Prevention of Money Laundering and Terrorist Financing, commonly known as the AML Law [3]. This law implements the EU’s Anti-Money Laundering Directives and imposes risk-based AML/CFT requirements on businesses operating within Belgium’s jurisdiction. The Belgian government updates the AML Law as new directives are released to ensure regulatory compliance with the latest standards.

Consequences of Noncompliance

Belgian authorities can impose fines for noncompliance with the AML Law. Penalties reach up to €1,250,000 for non-financial companies and €5000 or 10% of annual turnover (whichever is greater) for financial institutions [4].

Complying with Belgium’s AML Law

The AML Law requires firms to conduct a risk assessment of individual customers and deploy proportionate AML/CFT compliance measures based on the level of risk they present [5]. Effective risk assessment is a formidable challenge for financial institutions, necessitating the collection and analysis of vast amounts of data to create accurate customer risk profiles. Belgian AML/CFT compliance solutions typically comprise the following controls:

  1. Customer due diligence (CDD)
  2. Ultimate beneficial ownership (UBO) verification
  3. Customer screening against relevant watchlists, such as politically exposed person (PEP) lists and global sanctions lists
  4. Adverse media screening
  5. Sanctions screening

Preparing for Upcoming Regulations: Belgium’s Crypto Regulation

Belgium, like other EU member states, will implement the Markets in Crypto Assets (MiCA) regulation, expected to be introduced in 2024 [6]. This regulation will affect the AML/CFT treatment of crypto assets and introduce specific requirements for stablecoins. Additionally, an EU-wide crypto asset service provider register will be established, overseen by the European Banking Authority.

How Ripjar Can Support Your AML Compliance in Belgium

Ripjar’s Labyrinth Screening platform is designed to help businesses in Belgium, the EU, and across the globe meet AML/CFT compliance requirements. Informed by thousands of global data sources in real-time, this platform delivers actionable intelligence quickly and accurately [7].

  • Leveraging the Latest Data: Labyrinth Screening is informed by real-time updates from the latest adverse media, sanctions lists, and watchlists, ensuring clients have access to the most up-to-date information.
  • Cutting-Edge Technology: Labyrinth Screening uses machine learning technology to process vast amounts of data, minimizing false positive alerts and enabling swift decision-making.

For more information on how Ripjar can support your AML compliance in Belgium, contact us today.

[1] European Commission. (2022). Belgian Financial Services and Markets Authority. [2] The Belgian FIU. (n.d.). About us. [3] Belgian Parliament. (2017). Law of 18 September 2017 on the Prevention of Money Laundering and Terrorist Financing. [4] Deloitte. (2020). Penalties under the Belgian Anti-Money Laundering Law. [5] European Commission. (2022). Guideline on risk factors for the purpose of customer due diligence for AML/CFT purposes. [6] European Parliament. (2020). Markets in Crypto-Assets (MiCA). [7] Ripjar. (n.d.). Labyrinth Screening.