Belgium, one of Europe's wealthiest nations, has a well-developed economic environment and assistance providers from all over the EU and the rest of the world. As a result, Belgium has implemented a number of Anti-Money Laundering (AML) / Countering Terrorist Financing (CFT) regulations to fight the threat posed by financial violations such as money laundering (ML) and terrorism financing(TF). These regulations require record-keeping and reporting responsibilities on banks and other financial services providers functioning within its control.
The Financial Services and Markets Authority (FSMA), Belgium's principal regulatory organization, is responsible for protecting the country's financial system and overseeing compliance with AML/CFT. In this regard, the function of the FSMA and its responsibilities under the Anti-monetary laundering and anti-terrorism funding Law of Belgium should be recognized by financial institutions in Belgium.
The Financial Services and Markets Authority (FSMA) was formed on April 1, 2011, to substitute the Banking Finance and Insurance Commission (CBFA). The FSMA is a self-governing public body that reports to the Belgian government and is directed by Royal Decree, with members of its governance organizations serving for six years. The Belgian government founded the FSMA in order to sustain the 'fair and orderly functioning and transparency of the country's financial markets. As a result, the FSMA supervises all financial service providers, commodities, and supplemental pensions in the nation.
In its supervisory role, the FSMA cooperates with the National Bank of Belgium to perform the following six objects:
The FSMA sets behavior guidelines for all financial institutions operating in Belgium in accordance with its regulatory goals. The regulations are designed to ensure that financial services and products are treated fairly and equally throughout the industry, as well as that they fulfill specific safety requirements.
The Anti-Money Laundering Directive (AMLD) of the block is intended to be included in Belgium's national law as a Member of the European Union. On the prevention of money-wash and terrorist financing and lack of cash use in implementing the Fifth Anti-Money Laundering Directive (5AMLD), Belgium enforced its legislation of September 18, 2017, and published it in the Belgian Official Gazette (BOG). In addition to existing reporting, record keeping, and monitoring needs, the law enlarged the scope of AML/CFT laws in order to comply with bitcoin service providers, prepaid cards, and high-value asset transactions.
The most current legislation, the Sixth Anti-Money Laundering Directive (6AMLD), took force in December 2020, with a June 3, 2021, compliance deadline.
Noncompliance with ML laws in Belgium may result in financial and criminal results. Anyone found that money-laundering criminals are at risk of imprisonment for up to five years, with fines up to €800,000, and organizations may suffer sanctions up to €1,6 million.
Similarly, individuals found guilty of AML compliance violations may face up to €5 million penalties, while companies could face fines of up to 10% of their previous year's earnings. Individuals who hinder AML investigations are liable to fines and prison of up to €5 million and a year.
As a Financial Action Task Force (FATF) member, Belgium requires its financial institutions to establish and execute risk-based anti-money laundering and counter-terrorist financing compliance plans. This implies that Belgian businesses must evaluate the risks of money laundering and implement a compliance strategy that is proportional to the risk.
With this in mind, Belgian businesses should establish an internal anti-money laundering/counter-terrorist financing program. As a result, businesses should check clients against appropriate international sanctions lists, such as the EU's consolidated list and the UN Security Council list. Furthermore, Politicians and other elected officials represent a greater compliance risk since they may be able to circumvent AML restrictions due to their position and influence. Therefore, customers should be screened on a regular basis to determine if they are Politically Exposed Persons (PEPs).