Belgium, one of Europe's wealthiest countries, has a well-developed financial environment, housing institutions, and service providers from all over the EU and the rest of the globe. Belgium has implemented a number of AML/CFT Regulations to combat the threat posed by financial crimes such as money laundering and terrorism financing. These regulations impose record-keeping and reporting obligations on banks and other financial services providers operating within its authority.
Money laundering is prohibited in Belgium by the Law of January 11, 1993. Article 505 of the Penal Code makes it illegal, and it carries a maximum sentence of five years in jail. Belgian domestic legislation enacting Council Directive 2001/97/EC on the preventive measures of the use of the financial system for money laundering went into effect in January 2004, expanding the scope of money laundering predicate offenses beyond drug trafficking to include the financing of terrorist acts or organizations. This statute was updated in January 2010 to include the European Union's third anti-money laundering directive.
Belgian financial institutions are controlled by the Belgian Banking and Finance Commission (CBFA), which also oversees exchange houses, stock brokerages, and insurance firms for the purposes of money laundering and terrorism financing. Casinos are regulated by the Belgian Gaming Commission, whereas CTIF-CFI regulates those professions not regulated by the CBFA or other agencies.
Belgium's principal regulatory organization, the Financial Services and Markets Authority (FSMA), is in charge of maintaining the country's financial system and overseeing AML/CFT compliance. With this in mind, financial institutions in Belgium should be aware of the FSMA's function and their obligations under Belgian anti-money laundering and counter-terrorist financing legislation.
The FSMA was founded on April 1, 2011, to replace the Banking Finance and Insurance Commission (CBFA). The FSMA is a self-governing public organization that reports to the Belgian parliament and is governed by Royal Decree, with members of its governance bodies serving for six years. The Belgian government established the FSMA in order to maintain the 'fair and orderly functioning and transparency of the nation's financial markets. As a result, the FSMA oversees all financial service providers, products, and supplemental pensions in the country. In its supervisory function, the FSMA collaborates with the National Bank of Belgium to achieve the following six goals:
Conduct regulations: The FSMA publishes conduct guidelines for all financial institutions operating in Belgium in accordance with its regulatory goals. The laws are meant to ensure that financial services and products are treated fairly and equally across the industry, as well as that they meet certain safety requirements.
As a member of the European Union, Belgium is required to incorporate the bloc's Anti-Money Laundering Directives (AMLD) into its national legislation. Accordingly, Belgium amended its Legislation of September 18 2017 on the prevention of money laundering and terrorist funding, as well as the limitation of the use of cash, to implement the Fifth Anti-Money Laundering Law (5AMLD) and published the law in the Belgian Official Gazette. The legislation increased the scope of AML/CFT regulations to cover cryptocurrency service providers, prepaid cards, and high-value commodities transactions, as well as additional beneficial ownership measures, in addition to current reporting, record-keeping, and monitoring obligations. The most current regulation, the Sixth Anti-Money Laundering Directive (6AMLD), took effect in December 2020, with a June 3, 2021 compliance timeline.
Noncompliance with money laundering rules in Belgium can result in both financial and criminal consequences. Individuals found guilty of money laundering risk up to 5 years in jail and penalties of up to €800,000, while businesses may face fines of up to €1.6 million.
Similarly, individuals found guilty of AML compliance violations may face fines of up to €5 million, while businesses could face fines of up to 10% of their previous year's earnings. Individuals who obstruct AML investigations risk penalties of up to €5 million and a year in jail.