Financial Crime World

Title: Belgiūm’s Battle Against Money Laundering and Terrorist Financing: A Look at the Legal Framework

Money Laundering and Terrorist Financing: A Global Threat

Money laundering and terrorist financing pose substantial threats to the global economy and national security. In Belgium, the fight against these financial crimes is a top priority, with stringent legal provisions and international collaborations in place.

Understanding Money Laundering and Terrorist Financing

Money laundering involves introducing illicit funds into the legal system to conceal their illegal origin, while terrorist financing focuses on providing resources to terrorist organizations to further their destructive agenda.

  1. Money Laundering:

    • Objective: Disguise the origin of illegal funds
    • Process: Placement, Layering, Integration
      • Placement: Introduce funds into the financial system
      • Layering: Create confusion to obscure the origin
      • Integration: Reinvest in legal economic activities

  2. Terrorist Financing:

    • Objective: Conceal the destination of funds
    • Process: Layering to maintain anonymity of principals and beneficiaries
    • Methods: Banking techniques, parallel systems, physical transportation

Global Scale of Money Laundering and Terrorist Financing

According to IMF estimates, the global scale of money laundering and terrorist financing ranges between €400 and €1,000 billion or approximately 2.5% to 5% of the global GDP.

Combating Money Laundering and Terrorist Financing

To address these threats, Belgium, along with thirty other nations, established the Financial Action Task Force (FATF) in 1989. At the European level, five directives were adopted, while Belgium enacted the Act of 18 September 2017 on the prevention of money laundering and terrorist financing (ML/TF Act).

Key Provisions of the ML/TF Act

Regulations and Applications

The ML/TF Act covers a wide range of professions and entities:

  1. Financial institutions
  2. Legal professions (notaries, lawyers)
  3. Real estate agencies
  4. Casino operators
  5. Art markets

Provisions

The regulations include:

  1. Identification checking: Verify identities of clients, beneficial owners, complex cases, and transactions
  2. Detecting atypical transactions: Report unusual transactions
  3. Record keeping: Keep records of transactions, customers and business relationships
  4. Reporting: Suspicious activities reported to the Financial Intelligence Processing Unit (CTIF-CFI)

Protection Measures

Important rights and protection measures have been installed for entities and individuals who report suspicious activities in good faith.

Role of the CTIF-CFI

Members of CTIF-CFI, the police, and external experts are bound by professional secrecy, and CTIF-CFI plays a pivotal role in assessing and forwarding reports to the Public Prosecutor when serious indications of money laundering or terrorist financing are identified.

Conclusion

This overview provides an insight into the key aspects of financial crimes, the legal framework in Belgiūm, and the roles of various actors involved in the fight against these significant threats. Let us stay informed and work together to ensure a safer and more transparent financial system.