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Financial Institutions Must Implement Ambitious Action Plan to Address ML/FT Risks

BRUSSELS, BELGIUM - Financial institutions in Belgium have been given a deadline of July 1st, 2019, to implement an action plan aimed at mitigating the risks associated with money laundering and terrorist financing (ML/FT). This plan is part of a broader effort to strengthen the country’s anti-money laundering (AML) regime.

Implementation Requirements

According to Article 17 of the Anti-Money Laundering Law, financial institutions must define new or additional measures to manage or mitigate ML/FT risks if existing risk management measures are deemed insufficient. The action plan must be “sufficiently ambitious” in providing timely and appropriate solutions for identified weaknesses, and prioritization may be necessary based on the impact of gaps on overall efficiency.

Prioritization and Coherence

The National Bank of Belgium (NBB) has emphasized the importance of ensuring the coherence of the action plan. Financial institutions are required to provide more substantial actions for activities or risk factors assessed as high-risk during the gap analysis phase.

Timeline for Implementation

Financial institutions that are unable to implement certain remedial measures within the given timeframe must submit a reasoned request for postponement to the NBB by May 31st, 2019. The NBB may extend the deadline until January 1st, 2020, depending on the circumstances and justification in view of the risk.

Ongoing Risk Assessment

Financial institutions are also required to update their overall risk assessment periodically, whenever significant events occur that could significantly modify the nature and scale of ML/FT risks or their assessment. The NBB expects financial institutions to review their quantitative and qualitative information annually, or at a lower frequency if justified by the principle of proportionality.

Communication with the NBB

Financial institutions must document, update, and make available their overall risk assessments to the NBB. The documents and submission method are published on the “Reporting by Financial Institutions” page. Future updates should be mentioned and clarified in the activity report of the AML Compliance Officer (AMLCO), with updated versions of relevant documents provided.

Consequences of Non-Compliance

The NBB has stressed the importance of timely and effective implementation of risk mitigation measures, emphasizing that financial institutions must take a proactive approach to managing ML/FT risks. Failure to comply with these requirements may result in regulatory action.