Financial Crime World

Fighting Financial Crimes in Belgium: AML/CFT Regulations and Enforcement

Belgium, known for its vibrant financial industry, has implemented robust Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) regulations to counteract the growing threat of money laundering and terrorist financing.

Outlawing Money Laundering

  • Money laundering is strictly prohibited in Belgium under the Law of January 11, 1993.
  • Article 505 of the Penal Code imposes up to five years’ imprisonment and fines for money laundering.
  • The regulations expanded the scope of money laundering offenses with the incorporation of financing terrorism.
  • Belgium updated its legislation to incorporate the EU’s third anti-money laundering directive in January 2010.

Regulatory Framework

  • The Belgian Banking and Finance Commission (CBFA) regulates financial institutions, exchange houses, stock brokerages, and insurance firms.
  • The Belgian Gaming Commission oversees casinos.
  • Professionals not governed by the CBFA or other agencies are regulated by the CTIF-CFI.

Leading the Way: The Financial Services and Markets Authority (FSMA)

  • The FSMA acts as the primary regulatory body in Belgium, ensuring AML/CFT compliance.
  • Financial institutions adhere to the FSMA’s guidelines and obligations under Belgian anti-money laundering and counter-terrorist financing legislations.

Formation of the FSMA

  • Established on April 1, 2011, the FSMA replaced the Banking Finance and Insurance Commission (CBFA).
  • An autonomous public organization, governed by Royal Decree.
  • Six-member board members serve six-year terms.
  • Primary role: ensuring the fair and orderly functioning, transparency, and safeguarding of Belgium’s financial markets.

Conduct Guidelines and AML/CFT Regulations

  • The FSMA sets conduct guidelines for financial institutions and ensures compliance with business practices and regulations.
  • 2017 regulations include cryptocurrency service providers, prepaid cards, high-value commodities transactions, and beneficial ownership measures under 5AMLD.

Penalties for Noncompliance

  • Failure to adhere to AML/CFT regulations result in significant penalties:
    • Individuals: up to five years imprisonment and fines of up to €800,000.
    • Businesses: fines of up to €1.6 million.
    • Individuals responsible for AML compliance violations: fines of up to €5 million.
    • Businesses: penalties up to 10% of their previous year’s earnings.
    • Hinder AML investigations: fines totaling €5 million and a year’s imprisonment.
  • Belgium’s strict penalties highlight the government’s dedication to combating financial crimes.