Financial Crime World

Belgium Cracks Down on Financial Crime: Robust AML/CFT Regulations and Penalties

Belgium, a thriving economic powerhouse in Europe, is known for its robust financial sector that attracts institutions and service providers from the EU and beyond. To guard against financial crimes, including money laundering and terrorism financing, the country has enacted stringent Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) regulations.

Money Laundering Prohibitions in Belgium

Belgium unequivocally bans money laundering under the Law of January 11, 1993.

  • Article 505 of the Penal Code: Prohibits money laundering, punishable by up to five years in prison.
  • Predicate Offenses: Over the years, Belgium’s domestic legislation has evolved to encompass a wider range of money laundering predicate offenses beyond drug trafficking.
  • Terrorist Financing: The legislation now criminalizes the financing of terrorist acts or organizations in accordance with Council Directive 2001/97/EC and the European Union’s third anti-money laundering directive.

Regulatory Oversight

The Belgian financial sector is regulated by several key entities:

  1. Belgian Banking and Finance Commission (CBFA): Oversees banking, finance, exchange houses, and stock brokerages.
  2. Belgian Gaming Commission: Regulates casinos.
  3. Financial Services and Markets Authority (FSMA): Highest regulatory authority, tasked with safeguarding the nation’s financial system and ensuring AML/CFT compliance.

The Role of the FSMA

Launched on April 1, 2011, the FSMA replaced the Banking Finance and Insurance Commission (CBFA). Its mission includes:

  • Fostering fair and orderly functioning and transparency of Belgium’s financial markets
  • Collaborating closely with the National Bank of Belgium on six essential objectives

AML/CFT Regulations in Belgium

As a European Union member, Belgium is obligated to include the EU’s Anti-Money Laundering Directives (AMLD) into its national legislation.

  • 5AMLD and 6AMLD: In 2017, Belgium amended its legislation in accordance with these directives.
  • New Coverage: Extended the scope of AML/CFT regulations to cover cryptocurrency service providers, prepaid cards, high-value commodities transactions, and additional beneficial ownership measures.

Penalties

Transgressions against money laundering regulations in Belgium carry severe financial and criminal consequences.

  • Individuals: Up to five years imprisonment and fines of up to €800,000.
  • Businesses: Fines of up to €1.6 million.
  • AML Compliance Regulations: Fines of up to €5 million for individuals and up to 10% of their previous year’s earnings for businesses.
  • Obstructing Investigations: Up to €5 million in fines and a year of imprisonment.

These stringent penalties underscore Belgium’s commitment to combating financial crime and safeguarding the integrity of its financial system.