For company directors
The CFI can then oppose execution of the transaction, but that opposition lasts a maximum of five working days from notification. Did your company receive a report from its bank about a suspicious transaction, or was one of your accounts frozen? Advice on anti-money laundering legislation explains who must report, what the financial intelligence unit does next, and what you can do yourself.
Who must report a suspicious transaction, and what happens next?
Article 5 of the Law of 18 September 2017 lists exhaustively who must report a suspicious transaction. That covers not only banks and insurers, but also notaries, estate agents, statutory auditors, accountants, and lawyers for a limited list of acts, such as managing funds or setting up a company.
An obliged entity reports to the Financial Intelligence Processing Unit, the CFI, as soon as it knows, suspects, or has reasonable grounds to suspect that a transaction is linked to money laundering. It does not need to identify the underlying offence itself: suspicion alone is enough to trigger the duty to report.
If the CFI wants to extend the opposition, it must notify the public prosecutor without delay, who can then decide to seize the account in question.
A Belgian company trading worldwide once received substantial amounts from an Iranian client within a short period. The compliance department of the receiving bank reported this to the CFI, which passed it on to the public prosecutor, who decided to seize the account. A detailed report demonstrating real deliveries and contracts led the prosecutor to lift the seizure.
What if the bank ends the relationship itself?
A bank or other obliged entity may not enter into or continue a business relationship where it cannot complete the required customer due diligence. The law even obliges it, in that case, to end an existing relationship, regardless of what that means for your company.
The stakes are real for the obliged entity itself. The administrative fine can reach 5,000,000 euro for banks and insurers, or, if higher, ten per cent of annual net turnover. For accountants, notaries and estate agents, the ceiling is 1,250,000 euro. That explains why a bank would rather treat a file too strictly than too loosely.
The UBO register plays a role in every round of customer due diligence. An obliged entity reports any difference it finds between the register’s data and its own file to the Treasury Administration, and the identity of the reporting entity is never disclosed to the company concerned. Such reports sometimes explain why a bank suddenly asks extra questions about your shareholder structure.
Has your own banking relationship been ended, or your account frozen? Our page on the termination of a client relationship sets out the steps you can take. Obliged companies wanting their own policy reviewed will find more on our aml audit and aml training pages. A whistleblowing procedure meanwhile imposes a similar internal channel. Back to our page for company directors.
Frequently asked questions
Which companies must report suspicious transactions to the financial intelligence unit?
An exhaustive list in the Law of 18 September 2017 sets that out, including banks, insurers, notaries, estate agents, statutory auditors and accountants. Lawyers report only for a limited list of acts, such as managing funds or setting up a company, and they do not report directly to the unit but to the president of their bar.
How long can the financial intelligence unit hold up a suspicious transaction?
A maximum of five working days from notification of the opposition to the company concerned. If the unit wants to extend the block, it must notify the public prosecutor within that period. The prosecutor can then decide whether to seek a further measure, such as a seizure.
Must a bank end its relationship with a client after an AML investigation?
Yes, where the bank cannot complete the required customer due diligence. The law then bans it from continuing the relationship and even obliges it to end an existing one. That applies even where the client cooperates, but doubt about the origin of the funds remains. A second bank often declines the new client afterwards too, without its own further checks.
What does a bank do with a difference between the UBO register and its own file?
The UBO register plays a role in every round of customer due diligence. An obliged entity reports any difference it finds between the register’s data and its own file to the Treasury Administration, and the identity of the reporting entity is never disclosed to the company concerned. Such reports sometimes explain why a bank suddenly asks extra questions about your shareholder structure.