FATF Mutual Evaluation Report of Belgium - 2015

1. Anti-money laundering and counter-terrorist financing measures in Belgium – Mutual Evaluation Report – April 2015 1
Anti-money laundering and counter-
terrorist financing (AML/CFT)
measures in Belgium
Fourth Round Mutual Evaluation
Key findings, ratings and priority actions
23 April 2015
www.fatf-gafi.org/topics/mutualevaluations/documents/mer-belgium-2015.html

2. Anti-money laundering and counter-terrorist financing measures in Belgium – Mutual Evaluation Report – April 2015
Key findings
 Belgium’s legal framework for AML/CFT is not yet fully in
line with the FATF requirements as revised in 2012.
 Belgium conducts a large part of its AML/CFT activities
and initiatives on the basis of risk, but its understanding
of these risks is fragmented and incomplete.
 An overall AML/CFT approach still needs to be put
together, based on prioritising risks and allocating
resources.
 Belgium has achieved substantial results in international
cooperation, use of financial information and
prosecution of terrorist financing acts.
2

3. Anti-money laundering and counter-terrorist financing measures in Belgium – Mutual Evaluation Report – April 2015
Key findings
 The financial intelligence unit (CTIF) collects good
quality data, but needs to work more closely with
AML/CFT supervisors, businesses and professions
covered by the system, and with the criminal
prosecution authorities to help pool and enhance
knowledge and analyses.
 The financial sector has a good understanding of risks
and seems to take appropriate preventive action, but
tighter risk-based AML/CFT controls will ensure that
obligations are adequately applied.
 Some money value transfer service (MVTS) providers,
have inadequate understanding and implementation of
AML/CFT measures.22-May-15 3

4. Anti-money laundering and counter-terrorist financing measures in Belgium – Mutual Evaluation Report – April 2015
Key findings
 The suspicious transaction reporting policy of some MVTS
is not adequate, and there are shortcomings in the
controls in place for these institutions.
 The implementation of AML/CFT measures by diamond
dealers does not seem adequate to guarantee control of
the sector’s high risks.
 Supervision of these players remains extremely limited,
notably due to a lack of available resources, and despite
the proven risk of money being laundered into this sector,
suspicious transaction reports are totally lacking.
 The number of investigations and prosecutions seems
insufficient up to now given the identified level of risk,
even though two significant cases are currently under
investigation.
22-May-15 4

5. Anti-money laundering and counter-terrorist financing measures in Belgium – Mutual Evaluation Report – April 2015
Key findings
 The non-financial sector has improved its commitment to
AML/CFT. But, not all designated non-financial businesses
and professions concerned have taken action, including a
number of at-risk professions such as lawyers and casinos.
 Competent authorities verify if activities at risk for money
laundering and terrorist financing, such as trade in used
cars or gold, comply with restrictions on payments in cash.
More resources are needed in this area.
 Competent authorities can obtain information on the
beneficial owners of legal persons thanks to access to public
registers, but the updating of these registers is inconsistent.
22-May-15 5

6. Anti-money laundering and counter-terrorist financing measures in Belgium – Mutual Evaluation Report – April 2015
Key findings
 Authorities responsible for preventing and combatting
terrorism and terrorist financing are well-co-ordinated,
know the current risks and are making encouraging
progress to mitigate these risks.
 Criminal prosecution authorities have the legal authority
and tools to effectively combat ML, but greater co-
ordination between the different partners in the law
enforcement system will improve detection and
prosecution of money laundering.
22-May-15 6

7. Anti-money laundering and counter-terrorist financing measures in Belgium – Mutual Evaluation Report – April 2015
Ratings – Effectiveness (1/3)
7
Immediate outcome of an effective system to combat money
laundering (ML) and terrorist financing (TF)
Extent to
which
Belgium has
achieved this
objective
1. ML and TF risks are understood and, where appropriate,
actions co-ordinated domestically to combat ML and TF
Substantial
2. International co-operation delivers appropriate information,
financial intelligence, and evidence, and facilitates action
against criminals and their assets
Substantial
3. Supervisors appropriately supervise, monitor and regulate
financial institutions and designated non-financial
businesses and professions (DNFBPs) for compliance with
AML/CFT requirements commensurate with their risks.
Moderate
4. Financial institutions and DNFBPs adequately apply AML/CFT
preventive measures commensurate with their risks, and
report suspicious transactions.
Moderate

8. Anti-money laundering and counter-terrorist financing measures in Belgium – Mutual Evaluation Report – April 2015 8
Immediate outcome of an effective system to combat money
laundering (ML) and terrorist financing (TF)
Extent to
which
Belgium has
achieved this
objective
5. Legal persons and arrangements are prevented from misuse
for money laundering or terrorist financing, and information
on their beneficial ownership is available to competent
authorities without impediments
Moderate
6. Financial intelligence and all other relevant information are
appropriately used by competent authorities for money
laundering and terrorist financing investigations.
Substantial
7. Money laundering offences and activities are investigated
and offenders are prosecuted and subject to effective,
proportionate and dissuasive sanctions
Moderate
8. Proceeds and instrumentalities of crime are confiscated. Moderate
Ratings - Effectiveness

9. Anti-money laundering and counter-terrorist financing measures in Belgium – Mutual Evaluation Report – April 2015 9
Immediate outcome of an effective system to combat money
laundering (ML) and terrorist financing (TF)
Extent to
which
Belgium has
achieved this
objective
9. Terrorist financing offences and activities are investigated
and persons who finance terrorism are prosecuted and
subject to effective, proportionate and dissuasive sanctions.
Substantial
10. Terrorists, terrorist organisations and terrorist financiers are
prevented from raising, moving and using funds, and from
abusing the non-profit sector.
Moderate
11. Persons and entities involved in the proliferation of weapons
of mass destruction are prevented from raising, moving and
using funds, consistent with the relevant United Nations
Security Council Resolutions.
Moderate
Ratings - Effectiveness

10. Anti-money laundering and counter-terrorist financing measures in Belgium – Mutual Evaluation Report – April 2015
22-May-15
10
Ratings – Effectiveness
0
4
7
0
High
Substantial
Moderate
Low

11. Anti-money laundering and counter-terrorist financing measures in Belgium – Mutual Evaluation Report – April 2015
Ratings – technical compliance
22-May-15
11
AML/CFT POLICIES AND COORDINATION
1. Assessing risks & applying a risk-based approach Largely compliant
2. National cooperation and coordination Largely compliant
MONEY LAUNDERING AND CONFISCATION
3. Money laundering offence Compliant
4. Confiscation and provisional measures Compliant
TERRORIST FINANCING AND FINANCING OF PROLIFERATION
5. Terrorist financing offence Largely compliant
6. Targeted financial sanctions related to terrorism & terrorist financing Partially compliant
7. Targeted financial sanctions related to proliferation Partially compliant
8.Non-profit organisations Partially compliant

12. Anti-money laundering and counter-terrorist financing measures in Belgium – Mutual Evaluation Report – April 2015
Ratings – technical compliance
22-May-15
12
PREVENTIVE MEASURES
9. Financial institution secrecy laws Compliant
Customer due diligence and record keeping
10. Customer due diligence Largely compliant
11. Record keeping Compliant
Additional measures for specific customers and activities
12. Politically exposed persons Partially compliant
13. Correspondent banking Partially compliant
14. Money or value transfer services Largely compliant
15. New technologies Largely compliant
16. Wire transfers Partially compliant

13. Anti-money laundering and counter-terrorist financing measures in Belgium – Mutual Evaluation Report – April 2015
Ratings – technical compliance
22-May-15
13
PREVENTIVE MEASURES (continued)
Reliance, Controls and Financial Groups
17. Reliance on third parties Partially compliant
18. Internal controls and foreign branches and subsidiaries Partially compliant
19. Higher-risk countries Largely compliant
Reporting of suspicious transactions
20. Reporting of suspicious transactions Compliant
21. Tipping-off and confidentiality Compliant
Designated non-financial Businesses and Professions (DNFBPs)
22. DNFBPs: Customer due diligence Largely compliant
23. DNFBPs: Other measures Largely compliant

14. Anti-money laundering and counter-terrorist financing measures in Belgium – Mutual Evaluation Report – April 2015
22-May-15
14
TRANSPARENCY AND BENEFICIAL OWNERSHIP OF LEGAL PERSONS AND ARRANGEMENTS
24. Transparency and beneficial ownership of legal persons Largely compliant
25. Transparency and beneficial ownership of legal arrangements Largely compliant
POWERS AND RESPONSIBILITIES OF COMPETENT AUTHORITIES AND OTHER INSTITUTIONAL
MEASURES
Regulation and Supervision
26. Regulation and supervision of financial institutions Partially compliant
27. Powers of supervisors Largely compliant
28. Regulation and supervision of DNFBPs Partially compliant
Operational and Law Enforcement
29. Financial intelligence units Compliant
30. Responsibilities of law enforcement and investigative authorities Compliant
31. Powers of law enforcement and investigative authorities Compliant
32. Cash couriers Compliant
Ratings – technical compliance

15. Anti-money laundering and counter-terrorist financing measures in Belgium – Mutual Evaluation Report – April 2015
22-May-15
15
TRANSPARENCY AND BENEFICIAL OWNERSHIP OF LEGAL PERSONS AND ARRANGEMENTS
(continued)
General Requirements
33. Statistics Partially compliant
34. Guidance and feedback Largely compliant
Sanctions
35. Sanctions Largely compliant
INTERNATIONAL COOPERATION
36. International instruments Compliant
37. Mutual legal assistance Largely compliant
38. Mutual legal assistance: freezing and confiscation Largely compliant
39. Extradition Largely compliant
40. Other forms of international cooperation Largely compliant
Ratings – technical compliance

16. Anti-money laundering and counter-terrorist financing measures in Belgium – Mutual Evaluation Report – April 2015
22-May-15
16
Ratings – technical compliance
11
18
11
0
Compliant
Largely compliant
Partially compliant
Non-compliant

17. Anti-money laundering and counter-terrorist financing measures in Belgium – Mutual Evaluation Report – April 2015
Priority Actions for Belgium to
strengthen its AML/CFT System
 Absence of AML/CFT priorities
Based on national risk assessments,
competent authorities should
– set priorities in ML/TF actions
– relay priorities and recommendations to
policy makers to define AML/CFT policy that
will cover everything, from prevention to
suppression of money laundering and
terrorist financing
22-May-15 17

18. Anti-money laundering and counter-terrorist financing measures in Belgium – Mutual Evaluation Report – April 2015
Priority Actions for Belgium to
strengthen its AML/CFT System
 Lack of judicial resources
– Belgium must address the lack of human and
technological resources that exists at every
level, to different degrees.
• Lack of resources has an impact on detection,
prosecution and sanction of money laundering.
– Belgium needs a concrete and co-ordinated
strategy for the criminal prosecution of money
laundering.
22-May-15 18

19. Anti-money laundering and counter-terrorist financing measures in Belgium – Mutual Evaluation Report – April 2015
Priority Actions for Belgium to
strengthen its AML/CFT System
 Supervision based on ML/TF risks
AML/CFT control authorities should:
– adapt the scope, frequency and intensity of
supervision according to the nature of the risks
– implement on-site inspections that adequately
correspond to the risks
– allocate appropriate resources to supervision
based on the nature and level of ML/TF risks
facing the various sectors
22-May-15 19

20. Anti-money laundering and counter-terrorist financing measures in Belgium – Mutual Evaluation Report – April 2015
Priority Actions for Belgium to
strengthen its AML/CFT System
 Dialogue and communication
Competent authorities should emphasise
dialogue and communication with the entities
concerned on
• the ML/TF obligations applicable to them
• what is required of them in terms of suspicious
transaction reporting
• the results of AML/CFT supervisory actions
22-May-15 20