Financial Institutions Urged to Take Action on Money Laundering Risk Management
Adjustment Phase Underway
The National Bank of Belgium (NBB) has issued guidelines for financial institutions in Belgium to assess and address potential weaknesses in their risk management processes related to money laundering (ML) and terrorist financing (TF). As a result, financial institutions have been instructed to develop an action plan to address gaps identified during a recent global risk assessment.
Key Requirements
- Prioritize measures based on the impact of identified risks on the institution’s overall efficiency in managing ML/TF risks
- Ensure coherence and consistency across all areas, with more substantial actions required for high-risk activities or factors
Deadline for Implementation
Financial institutions have until July 1st, 2019 to implement any corrective measures necessary to address identified risks. Those that require additional time may submit a request for postponement to the NBB by May 31st, 2019, with the possibility of an extension until January 1st, 2020.
Periodic Updates Required
The NBB has emphasized the importance of periodic updates to the overall risk assessment. Financial institutions should review their assessments:
- Annually
- More frequently if significant events occur that could impact ML/TF risks (e.g., changes in products, services, customer base, distribution channels, or new technologies)
Documentation and Submission
The NBB requires financial institutions to document and submit their updated risk assessments, along with any supporting information. Institutions are encouraged to consult the “Reporting by Financial Institutions” page for guidance on submission requirements and methods.
Importance of Effective Risk Management
In a statement, the NBB emphasized the importance of effective ML/TF risk management, citing the need for financial institutions to stay vigilant in the face of evolving risks and regulatory requirements. The guidelines aim to support institutions in their efforts to prevent money laundering and terrorist financing, while also promoting a stable and secure financial system.