Financial Crime World

Title: Belgium Cracks Down on Financial Crimes: An Overview of AML Regulators, Key Regulations, and Compliance Solutions

Belgium, a prosperous European country and global political influencer, has become increasingly vulnerable to financial crimes such as money laundering and terrorism financing. In response to these threats and the global anti-money laundering (AML) and counter-financing of terrorism (CFT) efforts, Belgium has strengthened its regulatory framework.

Doing Business in Belgium: A Clear Understanding of AML Regulations

This article outlines the crucial regulatory bodies, essential regulations, and compliance solutions that your organization needs to stay protected from financial crime risks in Belgium.

Regulatory Bodies

1. Financial Services and Markets Authority (FSMA)

The Financial Services and Markets Authority (FSMA), Belgium’s primary financial regulator, was established in 2011. Its responsibilities include:

  • Supervision of financial products and services
  • Ensuring compliance with financial conduct rules and AML/CFT regulations
  • Surveillance of markets and distributed financial information
  • Financial education

The FSMA collaborates with the National Bank of Belgium (NBB) and the Federal Public Service Economy to conduct onsite inspections and request documentation to ensure compliance with AML/CFT regulations. The FSMA may impose warnings, business prohibitions, and significant financial penalties against offending firms.

As a member of the European Securities and Markets Authority (ESMA) and other international financial organizations, the FSMA plays a role in protecting global financial markets.

2. Financial Intelligence Processing Unit (CTIF)

CTIF, Belgium’s financial intelligence unit, is responsible for collecting and processing AML/CFT data. Its key functions include providing actionable intelligence for subsequent law enforcement investigations and coordinating with counterpart FIUs in other countries to aid in the investigation and prosecution of financial crimes.

Key Regulations

1. AML Law

Belgium’s main 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.” This law, which transposes the details of EU’s Anti-Money Laundering Directives (AMLDs), requires firms to follow risk-based AML/CFT requirements. The Belgian government updates the AML Law to include the latest regulatory details as new AMLDs are released.

Compliance Solutions

1. Customer Due Diligence (CDD) Measures

To comply with Belgium’s AML Law, firms must conduct risk assessments of individual customers and deploy proportionate AML/CFT compliance measures, including:

  • Customer due diligence (CDD) measures to establish and verify customer identities
  • Ultimate beneficial ownership (UBO) verification for corporate structures to ensure transparency
  • Customer screening against relevant watchlists, including politically exposed persons (PEPs) and sanctions lists, and adverse media sources for ongoing monitoring

Staying informed about international regulations and maintaining an effective and efficient compliance program is crucial in mitigating financial crime risks across jurisdictions. Implementing a robust AML/CFT solution can help your business streamline its compliance while ensuring continued compliance with constantly evolving regulations.