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NBB Regulates Financial Embargo and Assets Freezing Measures
In a move to strengthen its anti-money laundering regulations, the National Bank of Belgium (NBB) has outlined new guidelines for financial institutions to follow when implementing regular review processes for monitoring transactions.
Regular Review Processes
According to Article 23 of the Anti-Money Laundering Regulation, financial institutions must regularly update lists of persons subject to financial embargos and assets freezing measures. The NBB has specified procedures for analyzing alerts generated by transaction monitoring systems to ensure their relevance.
Procedures for Analyzing Alerts
When an alert is deemed relevant, financial institutions must immediately freeze assets and notify the competent service at FPS Finance of the freeze. The AMLCO (Anti-Money Laundering Compliance Officer) is responsible for reviewing the transaction and determining whether it generates suspicions of money laundering or terrorist financing.
Guidelines for Setting Up Operational Systems
The NBB has also established guidelines for setting up an operational system to effectively freeze assets, which must be activated when a correspondent bank detects a potential violation of an embargo or assets freeze.
Consequences of Identifying Embargoed Individuals or Entities
If the analysis of an alert leads to the conclusion that a customer or beneficiary is subject to a financial embargo or assets freeze, several consequences follow:
- Financial institutions may not enter into a relationship with such individuals or entities
- Transactions aimed at making assets available must be frozen
Reporting and Due Diligence Measures
In addition, financial institutions must report the implementation of a freezing measure to the FPS Finance - Treasury Department immediately, providing all relevant information. The NBB recommends that this reporting be done by the AMLCO, which should provide the General Administration of the Treasury with all necessary details.
The guidelines also emphasize the importance of reviewing the risk profile of customers included in lists of embargoes or assets freezes and implementing appropriate due diligence measures. If a review leads to a decision to terminate a business relationship, the assets subject to the freezing measure cannot be returned to the customer.
Ongoing Monitoring and Review
Finally, financial institutions are required to monitor their policies and procedures for financial embargoes and assets freezes on an ongoing basis and ensure that internal control measures are adequate.
The NBB’s new guidelines aim to strengthen Belgium’s anti-money laundering regime and prevent the misuse of financial systems.