Belgium

1. Does Belgium have legislation making it a criminal offence to engage in money laundering and/or terrorist financing?

Yes.

With regard to money laundering, there are two facets:

• the repressive facet as set out in article 505 of the Belgian Criminal Code with regard to money laundering; and
• the preventive facet as dealt with by the Belgian Act of 18 September 2017 on the prevention of money laundering and terrorist financing and on the restriction of the use of cash, as amended from time to time (“Belgian Act of 18 September 2017”).

With regard to terrorist financing, the criminal offence is set out in article 140 et seq. of the Belgian Criminal Code.

2. To whom does the legislation apply?

Articles 140 and 505 of the Belgian Criminal Code apply to both natural and legal entities.

Article 5 of the Belgian Act of 18 September 2017 captures all obliged entities, such as credit institutions, insurance companies, payment institutions and electronic money issuers, stockbroking firms, investment firms, alternative financing platforms but also auditors, notaries, real estate agents, diamond traders, professional football clubs etc.

3. What does the legislation prohibit?

Article 505 of the Belgian Criminal Code prohibits the following three actions:

• The act of buying, receiving, exchanging, possessing, keeping or managing assets derived from a predicate offence if the offender knew or ought to have known that the assets derived from an illicit origin;
• The act of converting or transferring assets derived from a predicate offence whereby the offender has the specific intent to conceal the illegal origin of the funds or to help any person involved in the predicate offence to avoid legal consequences; and
• The act of concealing or disguising the nature, origin, location, disposition, movement or ownership of the assets derived from a predicate offence.

The offender may be prosecuted if it knew or ought to have known that the assets derived from an illicit origin.

4. How is money laundering defined? Does underlying criminal activity have to be proven?

“Money laundering” is defined as follows:

• the conversion or transfer of money or other property, knowing that this is derived from criminal activity or from an act of participation in such activity, for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in the commission of such an activity to evade the legal consequences of his action;
• the concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of money or property, knowing that such property is derived from criminal activity or from an act of participation in such an activity;
• the acquisition, the possession or the use of money or property, knowing, at the time of receipt, that these were derived from criminal activity or from an act of participation in such an activity;
• participation in, association to commit, attempts to commit and aiding, abetting, facilitating or counselling the commission of any of the actions referred to under 1°, 2° and 3°. (Article 2 of the Belgian Act of 18 September 2017).

The Public Prosecutor must prove that one of the actions was carried out with a certain intent and that the assets have an illicit origin.

5. What level of intent or knowledge is required to establish a violation?

The level of intent or knowledge depends on the type of offence alleged to have been committed. See responses to questions 3 and 4.

6. What are the potential penalties for infringing the legislation?

Repressive facet (criminal sanction):

For natural persons, the maximum penalties are imprisonment for five years and/or a fine of EUR 800,000.

For legal entities, the maximum fine amounts EUR 1,600,000.

In addition, the ill-gotten assets might be confiscated by the court.

Preventive facet:

The competent authority can request the obliged entity to amend or enhance their internal anti-money laundering framework and/or replace their compliance officer.

In addition, administrative fines are possible up to 10% of the net annual turnover of the previous financial year, with a maximum of EUR 5,000,000 for certain natural persons.

Furthermore, competent authorities can impose daily maximum penalties, revoke licences, suspend activities, make the offences committed by the obliged entity public, etc.

Criminal sanctions may be imposed on financial institutions falling under the supervisory powers of the National Bank of Belgium (“NBB”) for hindering inspections in the context of anti-money laundering (article 36/20, § 1 of the Law of 22 February 1998 establishing the organic statute of the NBB).

7. Does the legislation have extra-territorial reach?

Yes, money laundering can be prosecuted in Belgium:

• if part of the criminal acts have been carried out in Belgium; and
• if the act is also a criminal offence both in Belgium and the foreign country where the offence was carried out.

8. Are there additional anti-money laundering or counter terrorist financing regulations or obligations, such as registration or reporting obligations, for businesses or individuals that operate in particular sectors or undertake particular activities?

Yes, see question 2 with regard to “obliged entities”. These obliged entities are required to identify/verify the identity of their clients and UBOs, assess their clients’ characteristics and the purpose and intended nature of the business relationship and to identify and report atypical operations.

9. What are the potential penalties for failing to comply with these obligations?

See question 6 (preventive facet).

10. Who are the relevant enforcement authorities in Belgium and what are their contact details?

There are several competent authorities, the most significant being: