New Belgian legislation to combat trade-based financial crime

Belgium has announced new legislation aimed at improving its anti-money laundering and countering the financing of terrorism (AML/CFT) efforts. The new law introduces several changes to the Belgian AML/CFT regime.

Measures that will impact on the prevention and detection of trade-based financial crime include a register of beneficial owners and the adoption of a risk-based rather than a rules-based approach to AML/CFT compliance.

The law builds on existing legislation and aims to prevent the use of the financial system for the purposes of money laundering or terrorist financing.

Beneficial owners

Belgian law already requires obliged entities to take reasonable measures to identify the beneficial owners of their clients or the representatives of their clients. The main difference is that the new law now expressly extends such obligation to representatives of clients.

The law also contemplates the implementation of a central register of beneficial owners of entities incorporated in Belgium. The register aims to help obliged entities identify the beneficial owner of the legal persons they are dealing with.

A new obligation is imposed upon legal entities incorporated in Belgium requiring them to identify and register their beneficial owners or face fines of between EUR 250 and EUR 50,000 if they fail to meet their obligations.

Risk-based approach

Obliged entities must move from a rule-based approach to a risk-based approach. This means obliged entities should apply AML/CFT provisions that are proportionate to their own AML/CFT risk assessment.

As a consequence, customer due diligence will be based upon individual general assessments of their global AML/CFT risk based on the purpose of an account or relationship; the level of assets to be deposited by a customer; the size of transactions undertaken and the regularity or duration of the business relationship.



Categories: Trade Based Financial crimes News