Corruption, money laundering and financing terrorism

The fight against corruption is a priority for the Belgian Government and is included in the National Security Plan. Widespread corruption is a plague that acts as a major obstacle to a country's sustainable economic development and heightens economic and social inequalities. Corruption is also an important source of resources for organised crime and the financing of terrorism.

The fight against corruption is one of the Sustainable Development Goals of the 2030 Agenda (SDG 16: Peace, justice, and inclusive institutions; SDG 16.5 "Substantially reduce corruption and bribery in all their forms).”

Since 2019, a rule of law assessment mechanism has been established within the European Union. The assessment work is focused on 4 main pillars: the justice system, the anti-corruption framework, media pluralism and other institutional checks and balances.

The fight against corruption is closely linked to the due diligence for responsible business conduct to prevent negative impacts of their activities on human rights, environment, and corruption.

In Belgium, corruption is governed by the Penal Code, modified by the Law of 10 February 1999 (itself adapted by the Law of 11 May 2007). Articles 246 and subsequent of the Penal Code concern public corruption and Articles 504bis and subsequent of the same Code concern private corruption.

At international level, Belgium is a signatory of the following Conventions:

• The United Nations Convention against Corruption (31 October 2003)
  
  It is the only universal convention fighting corruption. As a signatory State, our country is evaluated for its effective application of the provisions of these conventions through a Peer Review evaluation mechanism. The State under review is assessed by two States Parties designated by random draw. All States Parties must be evaluated in each review cycle, which lasts 5 years. At the end of the State review, an analytical summary is published on the website of the United Nations Office on Drugs and Crime.
  
  The FPS Foreign Affairs facilitates the political and inter-institutional coordination of the international review and monitoring mechanisms with which Belgium must comply. Belgium has recommended a good governance methodology as part of this international monitoring process. This tool invites international organisations to strengthen their synergies and coordination to avoid the duplication of these evaluations.
  
  In 2016, Belgium completed its first review cycle, which covered chapters III – Incrimination, and IV – International cooperation. The second review cycle covers chapters II – Prevention, and V – Asset Recovery. The summaries of the review cycles can be found here
  
  In October 2016, Belgium also ratified the six principles that guarantee the transparency of the Convention review process, to promote the involvement of civil society
   
• Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (Organisation for Economic Cooperation and Development, 17 December 1997)
  
  To make businesses working in international markets aware of the risks posed by corruption, the national contact point for the Organisation for Economic Co-operation and Development (OECD) Guidelines within the Federal Public Service Economy and the FPS Justice have developed an Anti-Corruption Guide for Belgian enterprises overseas. This guide enables them to better comply with the rules for combating the corruption of foreign public officials in international business transactions.
  
  By way of guidelines, the FPS Foreign Affairs has sent the 2017 OECD Due Diligence Guidance for enterprises to all diplomatic posts in order to provide Belgian businesses abroad with practical tools for dealing with corruption.
  
  A memorandum of understanding was signed in October 2015 by the FPS Foreign Affairs and FPS Justice. It states that if Belgian diplomatic posts abroad have information regarding corruption that may involve Belgian businesses abroad, they must immediately inform the Directorate General of Multilateral and Global Affairs of the SPF Foreign Affairs, which will send the accusation to the relevant authority. The FPS Justice forwards this information to the Federal Prosecutor.
   
• Criminal Law Convention on Corruption (Council of Europe, 27 January 1999)
  
  This Convention targets active and passive corruption in the public and private sectors. Belgium is also part of the Group of States against Corruption (GRECO), which monitors the application of the Convention in the Member States.
   
• Civil Law Convention on Corruption (Council of Europe, 4 November 1999)
• Convention on the fight against corruption involving officials of the European Communities or officials of Member States of the European Union (Council of the European Union, 26 May 1997)
   

Money laundering is the hiding of capital or funds whose origins are known to be illegal such as drugs, extortion, scams, arms sales, fraud, etcetera.

In Belgium, the Financial Intelligence Processing Unit (CTIF) is at the heart of the Belgian preventive mechanism combating the laundering of money of criminal origin, the financing of terrorism and proliferation. The CTIF also chairs the Assembly of partners, which is part of the Coordination College for the fight against the laundering of money of illicit origin. This Assembly works in money laundering risks and preventive policy. Together with the other partners, it is responsible for drawing up a risk analysis for money laundering.

The Law of 18 September 2017 transposes Directive (EU) 2015/849 of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC.

There are two components to the fight against money laundering:

• preventive aspect: the system created a duty of collaboration and transmission of information on the part of the bodies and persons targeted by this law, with the purposes of detecting suspicious financial operations and informing the CTIF to this effect (duty to report);
• enforcement component: Article 505 of the Penal Code. This article covers three types of behaviour that are likely to constitute the crime of laundering:
  • dealing in stolen goods: having bought, received in exchange or free of charge, possessed, kept or managed material benefits that are the result of an offence;
  •  the conversion or transfer of these material benefits with the aim of hiding or disguising their illegal origin;
  • the hiding or disguising of the nature, origin, location, positioning, movement, or ownership of the material benefits. This is aimed primarily at the use of frontmen, figureheads or shell companies and recourse to companies or financial institutions located in offshore territories or tax havens, etc.

The Law of 5 May 2019 containing various provisions amends the Code of Criminal Procedure. It allows for a better exchange and circulation of information between the various authorities responsible for combating money laundering. It now authorises the public prosecutor to request the necessary information on the products, services and transactions of a financial nature, and the virtual assets concerning the suspect, from:

• the institutions referred to in Article 5, § 1, 3° to 22° of the law of 18 September 2017 on the prevention of money laundering and terrorist financing, and limiting the use of cash;
• the Central point of contact of the National Bank of Belgium, in accordance with the law of 8 July 2018 on the organisation of a central contact point for financial accounts and contracts and on extending access to the central file of notices of seizure, delegation, transfer, collective settlement of debts and recourse.

In addition, when the CTIF has transmitted information to the common databases in accordance with Article 44/11/3ter, § 4 of the Law of 5 August 1992 on the police function, all relevant information may be communicated to all services which, pursuant to that Law, or its implementing decrees, have direct access to all or part of the personal data and information contained in those common databases. This information may only be used by these services for the purposes for which they have access to the common databases.
 

The fight against terrorism and its financing is part of the National Security Plan. To assist it in its mandate, Belgium can count on the 40 recommendations of the Financial Action Task Force (FATF) against money laundering, terrorist financing and proliferation.

These recommendations are divided into 4 groups:

• legal system (Recommendations 1, 2, 3);
• measures to be taken by Financial Institutions and Non-Financial Businesses and Professions to prevent Money Laundering and Terrorist Financing (Recommendations 4 to 25);
• institutional and other measures necessary in systems for combating Money Laundering and Terrorist Financing (Recommendations 26 to 34);
• international cooperation (Recommendations 35 to 40).

The FATF has 38 members and two regional organisations, the European Union, and the Gulf Cooperation Council. It was set up in 1989 by the G7 and operates based on peer evaluation.

Belgium was evaluated at the Group's plenary meeting in February 2015. This evaluation, known as Phase IV, covered technical compliance (to what extent the Member State's legislation complies with the standards of the Group) and effectiveness (to what extent these recommendations are effective).

Belgium must now respond to the Group's remarks to be considered fully compliant with the 40 recommendations.