Belgium – Know Your Customer (KYC) Rules

 

 

Belgium‘s banking industry is medium size, with assets of over $2 trillion dollars in 2010. Illicit funds primarily derive from serious forms of financial crime, including tax crime, and drug trafficking proceeds. Authorities note that criminals are increasing their use of remittance transactions and shell companies, and are relying primarily upon non-financial sectors, in particular lawyers, real estate entities and nonprofit organizations, to launder money. In 2010, the Cellule de Traitement des Informations Financieres (CTIF), Belgium‘s financial intelligence unit (FIU), also noted an increase in money laundering via ―money mules‖ and internet scams as well as an increase in the number of cases involving fraud through the European carbon market. The Belgian diamond industry also has been used to launder money.

According to CTIF, most of the criminal proceeds laundered in Belgium are derived from foreign criminal activity. Belgium generally has very little public corruption that contributes to money laundering and none known related to terrorist financing. According to the 2010 CTIF annual report, contraband smuggling represents 7.3% of all cases while terrorist financing represents only 1.5%.

KNOW-YOUR-CUSTOMER (KYC) RULES:

 

Enhanced due diligence procedures for PEPs:

 

PEP is an abbreviation for Politically Exposed Person, a term that describes a person who has been entrusted with a prominent public function, or an individual who is closely related to such a person. The terms PEP, Politically Exposed Person and Senior Foreign Political Figure are often used interchangeably

    • Foreign PEP: NO
    • Domestic PEP: NO

Belgium – KYC covered entities

 

The following is a list of Know Your Customer entities covered by Belgium Law:

    • Banks
    • Estate agents
    • Private security firms
    • Funds transporters
    • Diamond merchants
    • Notaries
    • Bailiffs
    • Auditors
    • Chartered accountants
    • Tax advisors
    • Certified accountants
    • Surveyors
    • Lawyers
    • Casinos

 

Belgium – Suspicious Transaction Reporting (STR) Requirements:

 

Number of STRs received and time frame: 18,673 in 2010

Number of CTRs received and time frame: 9,973 in 2010

The following is a list of STR covered entities covered by Belgium Law:

    • Banks
    • Estate agents
    • Private security firms
    • Funds transporters
    • Diamond merchants
    • Notaries
    • Bailiffs
    • Auditors
    • Chartered accountants
    • Tax advisors
    • Certified accountants
    • Surveyors
    • Lawyers
    • Casinos

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

 

Prosecutions: 11 in 2010
Convictions: One in 2010

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Belgium permits bearer shares for individuals as well as for banks and companies.

In 2011, Belgian authorities became more efficient and timely in freezing suspicious transactions due to improved cooperation among the different operational levels of the law enforcement authorities. They are scrutinizing more closely the purchase of properties by non-profit religious organizations with religious goals, since most of these transactions occur through cash deposited into the accounts of these non-profit organizations.

Belgian authorities are continuing to address implementation issues in two sectors, phone shops and the diamond industry. Phone shops allow customers to make inexpensive phone calls and access the internet. Only a quarter of the approximately 3,000 phone shops are formally licensed, and raids on these shops have uncovered evidence of money laundering operations. Authorities report challenges for officials trying to collect tax revenues and detect money laundering operations because phone shops often declare bankruptcy and later reopen under new management. Belgian authorities recognize the particular importance and special challenges for law enforcement of the diamond industry, as well as the potential vulnerabilities it presents to the financial sector, as 80% of the world‘s rough diamonds and 50% of polished diamonds pass through Belgium. Authorities have transmitted a number of cases relating to diamonds to the public prosecutor.