Corruption, money-laundering and financing of terrorism

 
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 Criminal Law Convention on Corruption (Council of Europe, 27 January 1999).
  • The Civil Law Convention on Corruption (Council of Europe, 4 November 1999).
  • The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD, 17 December 1997).
  • The 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).
  • The Convention against Corruption (United Nations, 31 October 2003).

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

In Belgium, the CTIF (Cellule de Traitement des Informations Financières - Financial Intelligence Processing Unit) is at the centre of the fight against the laundering of money of criminal origin and the financing of terrorism.

The fight against money laundering is governed by the Law of 11 January 1993 on preventing the use of the financial system for laundering money and financing terrorism, amended by the Law of 18 January 2010 (which reflected the transposition into Belgian law of the 3rd anti-money laundering directive) and then by the Law of 26 November 2011 and by the programme act of 29 March 2012.

There are two aspects to the fight against money laundering:

  • Preventive aspect: the system put in place by the law of 11 January 1993 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 aspect: Article 505 of the Penal Code. This article targets three types of behaviour liable to constitute the crime of money laundering:
    • * concealment: having bought, received in exchange or free of charge, possessed, kept or managed material benefits derived from an offence.
    • * the conversion or transfer of these material benefits with the aim of concealing or disguising their illegal origin.

* the concealment or disguising of the nature, origin, location, availability, movement or ownership of the material benefits. This is aimed primarily at the use of front-men, figureheads or shell companies and recourse to companies or financial institutions located in offshore territories or tax havens.

 Anti-corruption guide for Belgian enterprises overseas (PDF, 2.16 MB)

 
Money laundering

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

In Belgium, the CTIF (Cellule de Traitement des Informations Financières - Financial Intelligence Processing Unit) 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 the area of money laundering risks and preventive policy. Together with the other partners, it is responsible for drawing up a risk analysis for money laundering.

Until the law of 18 September 2017 (on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing, and on limiting the use of cash, known as the "BC/FT law"), the fight against money laundering was governed by the Law of 11 January 1993 on preventing the use of the financial system for laundering money and financing terrorism, amended by the Law of 18 January 2010 (which reflected the transposition into Belgian law of the 3rd anti-money laundering directive) by the Law of 26 November 2011 and by the programme act of 29 March 2012.

The Law of 18 September 2017 transposes Directive (EU) 2015/849 of the European Parliament and of the Council 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 component: the system lays down 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 targets three types of  behaviour liable to constitute the crime of money laundering:
    • * concealment: having bought, received in exchange or free of charge, possessed, kept or managed material benefits derived from an offence.
    • * the conversion or transfer of these material benefits with the aim of concealing or disguising their illegal origin.
    • * the concealment or disguising of the nature, origin, location, availability, movement or ownership of the material benefits. This is aimed primarily at the use of front-men, figureheads or shell companies and recourse to companies or financial institutions located in offshore territories or tax havens.

The Law of 5 May 2019 containing various provisions amends the Code of Criminal Procedure.

This law 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 contact point 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, where 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

 
Financing and of terrorism and proliferation

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 FATF (Financial Action Task Force) against money laundering, terrorist financing and proliferation.

These recommendations are divided into 4 groups:

  • Legal systems (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 on the basis of peer evaluation (one member state evaluates another member state).

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 respond to the Group's remarks by 2020 in order to be considered fully compliant with the 40 recommendations.