New Belgian Anti-Money Laundering Act (AMLD5)

On 5 August 2020, an Act implementing the fifth anti-money laundering Directive (AMLD5) into Belgian law was published in the Belgian State Gazette (the AMLD5 Act). The AMLD5 Act will generally enter into force on 15 August 2020.

The AMLD5 Act amends, amongst others, the 18 September 2017 Belgian Act on the prevention of money laundering and terrorist financing and on the restriction of the use of cash (the AML Act).

The most important changes to the AML Act include:

• the introduction of new obliged entities to the personal scope of the AML Act,
• a reduction of the transactions and storage limit for non-reloadable payment instruments,
• the obligation to draw up a list of prominent public functions,
• the harmonisation of enhanced due diligence obligations, and
• an improved cooperation between the competent authorities of the EU member states.

New obliged entities

In accordance with AMLD5, several new entities are brought within the personal scope of the provisions on the prevention of money laundering and terrorist financing (ML/TF).

These new obliged entities are:

• Virtual currency exchanges, i.e. providers engaged in exchange services between virtual currencies and fiat currencies, and custodian wallet providers, i.e. entities that provide services to safeguard private cryptographic keys on behalf of their customers, to hold, store and transfer virtual currencies. These entities will have to register with, and will be supervised by, the Belgian Financial Services and Markets Authority (FSMA).
• Art and antiques dealers, i.e. persons trading or acting as intermediaries in the trade of works of art or antiques, where the value of the transaction or a series of linked transactions amounts to EUR10,000 or more. These entities will need to register with the Federal Public Service Economy.
• Tax advisers, i.e. persons who undertake to provide, directly or by means of related persons, material aid, assistance or advice on tax matters as principal business or professional activity.
• Real estate agents, including those acting as intermediaries in the letting of immovable property, but only in relation to transactions for which the monthly rent amounts to EUR10,000 or more.
• Professional soccer clubs and soccer brokers established in Belgium, as well as the Belgian Soccer Association.

Non-reloadable payment instruments

Under the current version of the AML Act, obliged entities that issue electronic money are derogated from identification and identity verification (KYC) obligations with regard to customers following an appropriate risk assessment that demonstrates a low ML/TF risk and provided certain risk mitigation conditions are met. These risk mitigation conditions require, amongst others, that the relevant payment instrument is not reloadable or can only be used in Belgium to make payments up to a maximum monthly limit of EUR250, and that the maximum amount stored electronically does not exceed EUR250.

In accordance with AMLD5, the AMLD5 Act lowers these transaction and storage limits from EUR250 to EUR150.

Under the current AML Act, the derogation from the KYC obligations is not applicable in the case of redemption in cash or cash withdrawal of the monetary value of the electronic money where the amount redeemed exceeds EUR100. The AMLD5 Act reduces this amount from EUR100 to EUR50 and adds that the derogation from the KYC obligations is also not applicable in the case of remote (i.e., online) payment transactions where the amount paid exceeds EUR50 per transaction.

Prominent public functions

Under AMLD5, EU member states must issue and keep an up-to-date list indicating the exact functions which, according to national laws, regulations and administrative provisions, qualify as prominent public functions for the purposes of defining politically exposed persons. EU member states must also request each international organisation accredited on their territories to issue and keep an up-to-date list of prominent public functions at that international organisation. These lists must then be sent to the European Commission, which will make them public.

The prominent public functions under Belgian law are those already included in Article 4, 28° of the AML Act (e.g., heads of State, ministers, members of parliament, etc.).

Enhanced due diligence obligations

In accordance with AMLD5, EU member states have to ensure that the sectors dealing with third countries presenting strategic deficiencies in their ML/TF prevention regimes, as listed by the European Commission, apply systematic enhanced controls on the financial transactions from and to these countries. These controls are now harmonised across the EU in the form of a list of due diligence measures to be undertaken by obliged entities. The AMLD5 Act introduces this list of due diligence measures in Article 38 of the AML Act.

Improved cooperation between authorities

AMLD5 seeks to facilitate and promote effective cooperation and coordination among the different national and international supervisory authorities. It did so, among others, by including new subsections in AMLD4 (Directive 2015/849) on “Cooperation between competent authorities of the Member States” and “Cooperation between competent authorities supervising credit and financial institutions and other authorities bound by professional secrecy”. The AMLD5 Act implements these enhanced cooperation measures in the AML Act.

Next steps

The implementation of AMLD5 in Belgian law is long overdue. The implementation deadline expired on 10 January 2020. The AMLD5 Act allows for this implementation.

Still, various royal decrees and regulations have yet to be adopted to provide detailed rules on various matters, such as the registration requirements for virtual currency exchanges and custodian wallet providers.