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Global anti-money laundering briefing: Belgium, October 2017

  • Belgium
  • Fraud and financial crime

25-10-2017

New Belgian Anti-Money Laundering Act

On 16 October 2017, the new Belgian Anti-Money Laundering Act (1) (hereinafter the “AML Act”) entered into force. It mainly implements the EU Directive 2015/849 (hereinafter the “4th AMLD”) into Belgian law, but it also takes into account the 40 recommendations made by the International Financial Task Force. The aim of the new AML Act is to contribute even more in the fight against money laundering and financing of terrorism. Among other things, improvements are foreseen regarding the control of the entities concerned and the national and international cooperation between the competent authorities.

The new AML Act clearly indicates which persons should be identified (art.21 et seq.), the object of identification and identity verification (art. 26 et seq.), when identification should take place (art. 30 et seq.), the obligation to identify both the client's characteristics and the purpose and nature of the business relationship or occasional operation (art. 34) and the obligation to be continuously vigilant (art.35 et seq.). In the annexes, one can now also find the list of the indicative factors -- client-bound, product-bound or geographical – that should help undertakings analyse whether there is a potential higher or lower risk of money laundering or financing of terrorism.

Say goodbye to the Act of 11 January 1993

The Act of 11 January 1993 on preventing use of the financial system for purpose of money laundering and terrorist financing will not be able to celebrate its 25th birthday, but with its 24 years it was a well-known law that underwent not less than 40 amendments in total. These numerous changes over the years, the new structure of the 4th AMLD and the several new European and international provisions made it necessary to have a comprehensive review of the Act of 11 January 1993 for reasons of clarity and legibility. Belgium opted to repeal the Act of 11 January 1993 and to introduce the new AML Act.

All implementing royal and ministerial decrees or other acts of a legislative nature in execution of the Act of 11 January 1993 shall on the other hand remain applicable to the extent that their content is not inconsistent with the AML Act. Hence, the specific legislation on real estate brokers, financial lease companies, security firms, diamond traders … is still applicable.

What is new?

Compared to the 45 articles of the Act of 11 January 1993, the new AML Act with its 192 articles certainly increased in volume. As far as content is concerned, the following key aspects have changed:

  1. The scope of application did not change, except for the gambling games which are no longer limited to gambling games in casinos.
  2. A ‘cascade procedure’ has been introduced for the identification and assessment of the risks of money laundering and financing terrorism. In addition, for the vigilance obligations the risk-based approach is also used.
  3. One of the most important innovations is the introduction of the ‘UBO register’ which is a register of ultimate beneficial owners (see below).
  4. The role, responsibilities and the tasks of operational and strategic analysis of the Belgian Financial Intelligence Processing Unit (2) are elaborated in more detail.
  5. With regard to data protection and data storage, the 4th AMLD introduced a maximum period for the retention of documents of five (5) years from the end of the business relationship or the occasional operation. Member States had the possibility to extend this period for another maximum period of five (5) years. Belgium made use of this possibility and introduced a 10-year retention period, with a transitional arrangement for 2017 (7 years), 2018 (8 years) and 2019 (9 years). After this retention period, the entities concerned must delete the personal data in their possession;
  6. Aiming to improve the cooperation between financial intelligence units and the European Commission;
  7. And finally as far as sanctions are concerned, the new AML Act aligns with the 4th AMLD which provides for effective, proportionate and efficient administrative sanctions and measures for non-compliance by the entities to the obligations imposed. Additionally, the new AML Act provides for criminal sanctions (fines) for the prevention of inspections and verifications, refusal of disclosure or deliberately giving incorrect or incomplete information to the supervisory authorities.

Introduction of the UBO Register

As already mentioned, one of the most important innovations will be the national register of ultimate beneficial owners (“UBO register”). This innovation is required by article 30 of the 4th AMLD whereby Member States will need to ensure that the required information on ultimate beneficial owners is held in a central register. In addition, the information held must be adequate, accurate and current. The 4th AMLD has left discretionary room for the Member States on the actual implementation of the UBO register, for instance this could be done in a commercial register, companies register or a public register.

In Belgium, article 73 of the AML Act refers to the establishment of the UBO register. It will be organized by the General Administration of the Treasury of the FPS Finance (3). Undertakings and other legal entities (such as fiducies, trusts) shall be required to obtain and retain information about their ultimate beneficiaries and shall have to store this information in the UBO register. Nonetheless, the introduction of the UBO register will take additional time, since the King still has to adopt a royal decree on the manner in which information should be collected, the content of the information collected, the use of such information, the modalities for the verification and the management, the authorities who will have access and the actual way of operation of the register. It is expected that these practical implications will be determined by the summer of 2018.

Limitation of the use of cash

The title of the new AML Act explicitly refers to the limitation of the use of cash. Nonetheless, this aspect was already included under the Act of 11 January 1993. The main restriction on cash payments with the prohibition to make cash payments above 3000 euros remains unchanged. The provision on cash payments for precious metals, copper cables or goods containing precious substances on the other hand has become stricter.

  • Wet van 18 september 2017 tot voorkoming van het witwassen van geld en de financiering van terrorisme en tot beperking van het gebruik van contanten / Loi du 18 septembre 2017 relative à la prévention du blanchiment de capitaux et du financement du terrorisme et à la limitation de l'utilisation des espèces, Official Gazette 6 October 2017
  • De Cel voor Financiële Informatieverwerking / La Cellule de Traitement des Informations Financières
  • Algemene Administratie van de Thesaurie van de FOD Financiën / L'Administration générale de la Trésorerie de la SPF Finances

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