Financial Crime World

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Establishing an Operational System for Freezing Assets in Case of Embargo or Assets Freeze

Financial institutions must set up an operational system to freeze assets with immediate effect when a customer is detected as being subject to a financial embargo or assets freeze. This includes implementing measures to prevent any business transactions, releasing funds or assets to third parties, and reporting the freezing measure to the relevant authorities.

Practical Implementation of Freezing Measures

Prohibition on Entering into a Relationship

  • No business can be conducted with customers listed under the embargo or assets freeze.
  • All transactions aimed at establishing or maintaining a business relationship with such customers are prohibited.

Prohibition on Making Assets Available

  • All transactions aimed at releasing funds or assets to third parties are prohibited, including freezing accounts and contract performances.
  • Financial institutions must ensure that no assets belonging to customers under embargo or assets freeze can be made available to them.

Immediate Reporting

Financial institutions must contact the FPS Finance - Treasury Department immediately after applying an assets freezing measure. This ensures prompt communication and cooperation between financial institutions and regulatory authorities.

Review of Risk Profile and Due Diligence Measures

Financial institutions should review the risk profile of customers under embargo or assets freeze, as well as those related to them, and implement appropriate due diligence measures. This includes conducting thorough background checks, verifying customer identities, and monitoring their transactions for suspicious activities.

Reporting Suspicious Activities

In case of suspicion of money laundering, terrorist financing, or proliferation of weapons of mass destruction, financial institutions must report this to CTIF-CFI immediately. This ensures that the relevant authorities are informed and can take necessary action to prevent such activities.

Lifting of Embargo and Freezing Measures

When an embargo or assets freeze is lifted, financial institutions should contact the FPS Finance - Treasury Department to determine the necessary measures to be taken. This includes reviewing and updating their policies and procedures to ensure compliance with regulatory requirements.

Internal Control Measures

Financial institutions must implement internal control measures, including periodic monitoring of policies and procedures for financial embargoes and assets freezes. They should also ensure that organisational and operational obligations are adequately met to prevent any non-compliance or weaknesses in their systems.