Financial Crime World

Belgium Takes Aim at Financial Crime with Tough Anti-Money Laundering Regulations

Outlawing Money Laundering

In a bid to combat financial crime and maintain the integrity of its financial system, Belgium has established robust anti-money laundering (AML) and counter-terrorist financing (CFT) regulations. As one of Europe’s most prosperous nations, Belgium is home to a thriving financial landscape that attracts institutions from across the European Union and beyond.

Regulatory Framework

The Law on Money Laundering

Belgium’s Law of January 11, 1993 explicitly prohibits money laundering, with Article 505 of the Penal Code rendering it a criminal offense punishable by up to five years in prison. The country’s domestic legislation has been amended to incorporate the EU’s third AML directive, expanding the scope of money laundering predicate offenses to include terrorist financing.

Regulatory Oversight

Key Regulators

  • The Belgian Banking and Finance Commission (CBFA) oversees financial institutions.
  • Casinos fall under the regulation of the Belgian Gaming Commission.
  • Professions not regulated by these agencies are overseen by CTIF-CFI.
  • The Financial Services and Markets Authority (FSMA), established in 2011, is the apex regulatory body responsible for safeguarding Belgium’s financial system and ensuring AML/CFT compliance.

The Role of the FSMA

As an autonomous public organization reporting to the Belgian parliament, the FSMA operates under Royal Decree. Its primary mandate is to uphold the fair and orderly functioning and transparency of Belgium’s financial markets. To achieve this, it collaborates closely with the National Bank of Belgium, working toward six key objectives:

  • Monitoring and supervision: ensuring that institutions operate in accordance with regulatory requirements.
  • Ensuring institutional compliance: verifying that institutions adhere to regulatory standards.
  • Oversight of financial products: monitoring the development and sale of financial products.
  • Supervision of financial service providers: overseeing the activities of financial service providers.
  • Monitoring supplemental pension plans: ensuring the proper functioning of supplemental pension plans.
  • Advancement of financial education: promoting financial literacy among consumers.

Conduct Regulations

The FSMA issues conduct guidelines that apply to all financial institutions operating in Belgium. These guidelines aim to ensure equitable and consistent treatment of financial services and products across the industry while upholding stringent safety standards.

AML/CFT Regulations

As a member of the European Union, Belgium is obligated to integrate the bloc’s AML Directives into its national legislation. The Fifth Anti-Money Laundering Directive (5AMLD) was incorporated into Belgian law in 2017, broadening the scope of AML/CFT regulations to cover:

  • Cryptocurrency service providers: ensuring that cryptocurrency service providers implement effective measures to prevent money laundering.
  • Prepaid cards: regulating prepaid cards to prevent their use in money laundering activities.
  • High-value commodities transactions: monitoring high-value commodities transactions to prevent the laundering of proceeds from crime.
  • Beneficial ownership measures: requiring institutions to identify and verify the beneficial owners of customers.

Penalties for Noncompliance

Noncompliance with money laundering regulations in Belgium carries both financial and criminal repercussions. Individuals found guilty of money laundering face up to five years imprisonment and fines of up to €800,000, while businesses may encounter fines reaching up to €1.6 million. Those who obstruct AML investigations risk penalties of up to €5 million and a year of imprisonment.

Belgium’s commitment to combating financial crime is evident in its stringent regulations and penalties. As the country continues to maintain its position as one of Europe’s most prosperous nations, it remains dedicated to ensuring the integrity of its financial system.