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FINANCIAL INSTITUTIONS MUST DEMONSTRATE THOROUGH KNOWLEDGE AND UNDERSTANDING OF ML/FT RISKS
Brussels, [Date] - In a move to strengthen its anti-money laundering and combating the financing of terrorism (ML/FT) regulations, the National Bank of Belgium has issued new guidelines requiring financial institutions to conduct a comprehensive risk assessment of their ML/FT exposure.
Compliance with Anti-Money Laundering Law
According to Article 17 of the Anti-Money Laundering Law, financial institutions must document, update, and submit their overall risk assessments to the NBB. The law also requires institutions to implement corrective measures necessary to reduce identified risks by July 1st, 2019 at the latest.
Importance of Understanding ML/FT Risks
The NBB emphasized the importance of financial institutions having a thorough understanding of ML/FT risks in order to effectively mitigate them. “Financial institutions must be able to demonstrate their knowledge and understanding of ML/FT risks through regular risk assessments and updates,” said an NBB spokesperson.
Three-Phase Process for Risk Assessment
The new guidelines require financial institutions to conduct a three-phase process, including:
- Identifying potential ML/FT risks
- Assessing the likelihood and impact of these risks
- Implementing corrective measures to mitigate them
Institutions must also update their risk assessments periodically to reflect changes in their business activities, legal and regulatory environment, and socio-economic context.
Additional Support and Training
The NBB has published detailed guidelines on its website, outlining the specific requirements for financial institutions to conduct their ML/FT risk assessments. The bank will also provide additional support and training to help institutions comply with the new regulations.
“We understand that implementing these new guidelines may require significant resources and efforts from financial institutions,” said the NBB spokesperson. “However, we are committed to supporting our stakeholders in this process and ensuring that they have the necessary tools and expertise to effectively mitigate ML/FT risks.”
Timeline for Compliance
The new guidelines come into effect on July 1st, 2019, and financial institutions must submit their updated risk assessments to the NBB by December 31st, 2020.