Financial Institution Fraud Prevention in Belgium: A Closer Look at Sanctions Regulations
Introduction
In 2017, Belgium’s law on preventing money laundering and terrorist financing was passed. This legislation has introduced new provisions aimed at strengthening financial institution fraud prevention in the country.
What Does it Mean?
Reporting entities, such as banks, insurers, stockbrokers, notaries, lawyers, estate agents, diamond merchants, accountants, among others, are required to establish a control system that enables them to monitor and report on financial sanctions. This includes developing risk management models, conducting due diligence measures, and making staff aware of the financial sanctions and associated measures.
Who Are Affected?
Not all entities are subject to this requirement. Only those stipulated in Article 5 of the Anti-Money Laundering (AML) law, primarily financial institutions and some non-financial professions, must define a control system to comply with financial sanctions.
Which Financial Sanctions Apply?
The obligation to develop a monitoring system applies only to financial sanctions imposed under sanctions regimes against terrorism or the proliferation of weapons of mass destruction. However, a monitoring system developed for these purposes can also be used to comply with other sanctions regimes.
Who Oversees Compliance?
Compliance with this obligation is monitored by supervisory authorities exercising AML oversight on reporting entities. Article 85 of the AML law specifies which authority is responsible for each type of entity. Additionally, the Treasury is competent to investigate and report any infractions against financial sanctions.
Distinguishing Enhanced Due Diligence Measures
It’s essential to differentiate between the obligation to develop a monitoring system for financial sanctions and enhanced due diligence measures for high-risk countries. Although some countries are mentioned in both provisions, they concern distinct obligations aimed at preventing money laundering and terrorist financing.
Useful Information
For more information on financial institution fraud prevention in Belgium, reporting entities can refer to:
- Law of September 18th 2017 on the prevention of the use of the financial system for the purposes of money laundering and terrorist financing and limitations to the use of cash
- National Bank of Belgium’s website on defining a control system for complying with financial sanctions (Article 8 of the AML law)
- FPS Finance’s website on applying enhanced due diligence measures in respect of high-risk countries (Article 7 of the AML law)
Need Help?
If you have questions about financial sanctions or require assistance, please contact the Treasury via e-mail at quesfinvragen.tf@minfin.fed.be.