Belgium mutual-evaluation-report-2015

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

http://www.fatf-gafi.org/topics/mutualevaluations/documents/mer-norway-2014.html










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.

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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.

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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.

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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.

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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.

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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




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. 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

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

HighSubstantialModerateLow


Ratings – technical compliance

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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



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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



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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


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



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




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18

11

0

CompliantLargely compliantPartially compliantNon-compliant


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

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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.

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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

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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

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Government & Nonprofit

Belgium mutual-evaluation-report-2015