Financial Crime World

The Money Laundering/Terrorist Financing Act in Belgium: A Comprehensive Overview

The Money Laundering/Terrorist Financing Act (ML/TF Act) is a crucial piece of legislation in Belgium aimed at preventing money laundering and terrorist financing. This article provides an in-depth look into the key aspects of the law, including its applicability to various professions, preventive measures, reporting obligations, sanctions, and cash payment restrictions.

Applicable Professions

The ML/TF Act applies to a wide range of non-financial professions, including:

  • Service providers: Businesses that offer services such as hospitality, tourism, and transportation.
  • Real estate agents: Professionals involved in buying, selling, or renting properties.
  • Diamond traders: Businesses that buy, sell, or trade diamonds and other precious stones.
  • Finance leasing companies: Companies that provide financing for the acquisition of assets, such as vehicles or equipment.
  • Professional football clubs: Sports organizations that participate in professional football leagues.

Preventive Measures

These professions must implement systems to prevent money laundering and terrorist financing. This includes:

  • Risk assessments: Conducting regular risk assessments to identify potential vulnerabilities.
  • Internal policies: Developing and implementing internal policies to prevent money laundering and terrorist financing.
  • Employee training: Providing employees with training on these issues to ensure they are aware of their responsibilities.

Reporting Obligations

If a business suspects or has serious grounds for believing that there is a threat of money laundering or terrorist financing, they must report this to the Financial Intelligence Processing Unit (CTIF). They may also be required to provide additional information at the request of the CTIF.

Sanctions

Failure to comply with these obligations can result in an administrative fine. The amount of the fine varies depending on the type of profession:

  • Non-financial professions: €250-€1,250,000.
  • Financial professions: €5,000-10% of annual turnover.

Cash Payment Restrictions

The ML/TF Act also imposes restrictions on cash payments that may be made or received by businesses. These restrictions are as follows:

  • Property sales: Payment may only be made by bank transfer or cheque.
  • Payments between consumers and financial institutions: No limitation applies to payments and donations between consumers and certain financial institutions such as banks.
  • Public sales under supervision: Cash payments up to €3,000 may be made or received at public sales under the supervision of a judicial officer.
  • Purchase/sale of precious metals: Purchase/sale between professionals of precious metals, scrap metals or copper cables; purchase of precious metals, old metals or copper cables by a professional from a consumer.

Cash Payment Limitations

In other cases, the payment and acceptance of a payment for one or several debts between which there seems to be a link may not exceed €3,000 in cash. The same applies to one or several donations between which there seems to be a link.

The ML/TF Act aims to prevent money laundering and terrorist financing by putting in place regulations on businesses that can help identify suspicious transactions. By understanding the key aspects of the law, businesses can ensure they are complying with their obligations and helping to maintain a safe financial environment.