Financial Crime World

Title: Belgian Financials Brace for Stricter Anti-Money Laundering Rules as FSMA Cracks Down

Belgium’s Commitment to Countering Financial Crimes

Belgium, known for its vibrant European economy and robust financial industry, is strengthening its defenses against financial crimes, such as money laundering and terrorism financing. With a diverse financial landscape welcoming institutions and service providers from the EU and beyond, the importance of combating these illicit activities is undeniable. The Belgian Government’s response? Reinforced Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) regulations.

Money Laundering Prohibitions in Belgium

  • Zero Tolerance for Money Laundering: An offense outlined by Article 505 of the Penal Code, carrying a five-year prison term.
  • Expanded Scope of Money Laundering Predicate Offenses: Adheres to Council Directive 2001/97/EC and includes financing terrorism acts or organizations (1993 Law).
  • Latest Update: Embraced EU’s third AML directive in 2010.

Regulatory Oversight

Financial entities in Belgium are subject to the following regulatory bodies for money laundering and terrorism financing:

  • Belgian Banking and Finance Commission (CBFA): Banks, exchange houses, stock brokerages, and insurance firms.
  • Belgian Gaming Commission: Casinos.
  • CTIF-CFI: Non-regulated professions.
  • Financial Services and Markets Authority (FSMA): Apex regulatory body ensuring AML/CFT compliance.

FSMA: From Watchdog to Gamechanger

  • Founded in 2011: Replaced CBFA and focuses on fair functioning and transparency of Belgium’s financial markets.
  • Autonomous Public Organization: Under the Belgian parliament.
  • Mandated Regulatory Objectives: Supervising financial markets and institutions.

Role of the FSMA

  • Conduct Guidelines: Strict rules to maintain a fair functioning financial sector.
  • Ongoing Adherence: Financial sector must remain vigilant to avoid costly penalties.

Stricter AML/CFT Regulations

  • European Union Member: Adoption of the bloc’s Anti-Money Laundering Directives (AMLD).
  • Regulatory Expansion: Included cryptocurrency service providers, prepaid cards, high-value commodities transactions, and beneficial ownership measures under the AML/CFT regulations.
  • Fifth AMLD (2017): Cryptocurrencies, prepaid cards, and high-value commodities transactions subject to AML/CFT regulations.
  • Sixth AMLD (2020): Mandated a June 2021 compliance deadline for digital currencies.

Consequences of Noncompliance

  • Financial Penalties: Fines of up to €800,000 for individuals and €1.6 million for businesses.
  • Additional Consequences: Potential imprisonment and regulatory breach fines of up to €5 million for individuals and 10% of the previous year’s earnings for businesses, accompanied by annual imprisonment for individuals obstructing investigations.