Preface by the Director of the Financial Processing Unit CTIF-CFI
Mr Philippe de KOSTER
After having been affected for two years and a half by the COVID-19 health crisis, we are now facing a war on Europe’s doorstep. The very least we can say is that we are living in a world that is becoming increasingly uncertain.
Despite all of this, the mechanisms for the prevention of money laundering and terrorist financing have worked and the results presented in this annual report 2021 prove this.
Upon the publication of this report I would again like to thank all members of staff, the liaison officers and all our preferential partners (judicial authorities, federal police, FPS Economy,…) for the work they did in 2021, often in difficult circumstances including working from home orders and minimal presence at the office. Especially since the number of disclosures continued to rise sharply in 2021. CTIF-CFI received a record number of 46.330 disclosures, which is an increase of almost 50 % compared to 2020.
Several British payment institutions set up a company in Belgium in order to operate under the freedom to provide services, which may explain a large part of this increase. Awareness of the financial sector and “lookback” operations requested by the National Bank definitely also provide an explanation for this rise.
Given that CTIF-CFI receives such disclosures, it must constantly find a balance between “looking back at the past” and finding a more effective way of approaching money laundering aimed at the future and new money laundering risks such as those linked to the use of cryptocurrencies.
Tools for prioritising and orientating disclosures, which have been used by CTIF-CFI for a number of years and are constantly being improved, have enabled us to deal with this massive surge in new disclosures, without having to secure additional financial resources at present.
1.241 new files were disseminated to the Belgian judicial authorities. A thousand notifications of useful information were sent to administrative authorities of the State (the unit Antifraud Coordination CAF, the Social Intelligence and Investigation Service SIRS-SIOD, FPS Economy, etc.) and to the supervisory authorities in accordance with Articles 83 and 121 of the Law of 18 September 2017.
The IT tools developed by FIU.Net and by CTIF-CFI have also made it possible to disseminate 8.021 XBR (Cross-Border Reports) and 613 XBD (Cross-Border Dissemination Reports) regarding transactions involving another European Member State (cf. Section V.4.).
In accordance with the fourth AML/CFT Directive, when CTIF-CFI receives a disclosure regarding another country, it shall send for analysis, all relevant information in the disclosure to the Financial Intelligence Unit (FIU) of the country in question. These notifications do not replace the current procedure of information exchange upon request or spontaneous exchange, however, which is usually carried out during or at the end of the analysis of a file, but completes this procedure.
Generally speaking some 15.000 items of intelligence received by CTIF-CFI from reporting entities are disseminated to external parties in one way or another, either to the judicial authorities, administrative services of the State, intelligence services (including OCAM-OCAD), AML/CFT supervisory authorities and counterpart FIUs. The information that cannot be disseminated to external parties forms an essential base, which can be used for the purposes of strategic analysis, but also for a potential dissemination in the future if any serious indications of money laundering or terrorist financing would subsequently be identified.
Although there is little change in criminal phenomena and money laundering and terrorist financing techniques, there is growing evidence that the laundered funds are the proceeds of polycriminal activities. Over the past year, a large number of cases have shown how social fraud, serious fiscal fraud and organised crime increasingly feature as interrelated issues.
CTIF-CFI has also identified an increased professionalization of money laundering as such and works tirelessly to raise awareness of this issue among its partners as well as the risks of such an evolution for the rule of law and society as a whole.
Extremely well-structured organisations that operate internationally provide their “money laundering services” to various other high-level criminal organisations involved in various illegal activities (drug trafficking, gangsters, human traffickers, international fraudsters, etc.) that generate huge profits (mainly in cash). Alarmingly, CTIF-CFI has found that these money laundering networks have anchored part of their activities in Belgium, by using a very large number of bank accounts, front companies and front men.
Finally, I would like to stress the efforts made and the significant resources put in place in 2021 by the European Commission (DG FISMA) to ensure the transfer of the secure communication system for European FIUs, FIU.Net, from Europol to the European Commission’s infrastructure, while maintaining the decentralised nature of the system as was the case in the past. This transfer was the start of the development of a modernised FIU.Net, in order to increase the effectiveness of the tools for the prevention of money laundering and terrorist financing and to adapt them to new threats.
The new “AML package” was announced by DG FISMA in June 2021 and subsequently discussed at Council level and this package is now starting to take shape. The main aim is to improve the fight against money laundering and terrorist financing through preventive measures applicable in a uniform manner in all Member States. It will include the creation of an Anti-money Laundering Authority (AMLA), which will of course involve European FIUs.
The AML Package will undoubtedly have a significant impact on the preventive AML/CFT framework, but also on the organisation and future architecture of the system for the prevention of money laundering and terrorist financing in Belgium.
That is why I have asked the Director-General of DG FISMA, Mr John Berrigan, to contribute to CTIF-CFI’s annual report of 2021. I thank him for accepting this request.
I hope you enjoy reading the report.
Philippe de KOSTER