EN
OPINION OF THE EUROPEAN CENTRAL BANK
of 30 September 2002
at the request of the Belgian Ministry of Finance
on a draft law amending the law of 11 January 1993 on the prevention of the use of the financial
system for the purpose of money laundering
(CON/2002/24)
1. On 20 August 2002, the European Central Bank (ECB) received a request from the Belgium
Ministry of Finance for an opinion on a draf t law amending the law of 11 January 1993 on
prevention of the use of the financial system for the purpose of money laundering (the draftlaw).
2. The ECBs competence to deliver an opinion is based on Article 105(4) of the Treaty
establishing the European Community (hereinafter referred to as the Treaty) and the secondand fifth indents of Article 2(1) of the Council Decision 98/415/EC of 29 June 1998 on theconsultation of the ECB by national authorities regarding draft legislative provisions
1, as the
legislative proposal contains provisions concerning, amongst others, restriction on payments incash and new obligations for the financial sector that may have an impact on means of paymentand payment systems. In accordance with the first sentence of Article 17.5 of the Rules ofProcedure of the European Central Bank, the Governing Council of the ECB has adopted thisopinion.
3. The draft law transposes Directive 2001/97/EC of the European Parliament and of the Council
of 4 December 2001 amending Council Directive 91/308/EC on prevention of the use of thefinancial system for the purpose of money laundering
2 by: (i) extending the obligations imposed
by the law of 11 January 1993 to lawyers, who mu st, through their self-regulatory body, (i.e. the
Head of their Bar Association) inform the releva nt authorities of any suspicions they may have;
and (ii) eliminating the distinction between ord inary suspicion and serious suspicion laid
down in Articles 12 and 14 of the law of 11 January 1993 (i.e. an obligation to declare to theFinancial Information Processing Unit all facts which might be an indication of moneylaundering, and no longer just those facts which are likely to constitute evidence of laundering).
                                                     
1 OJ L 189, 3.7.1998, p. 42.
2 OJ L 344, 28.12.2001, p. 76.
2In accordance with Article 1(2) of Decision 98/415/CE, Member States are not obliged to
consult the ECB on the transposition of directives, but the present draft law does not onlytranspose the Directive. In addition, it introduces other improvements to the prevention ofmoney laundering by: (iii) giving a regulatory pow er to the supervisory authorities to determine
the modalities of clients identification and of internal organisation of the persons they supervise(see paragraph 4 below); and (iv) prohibiting cash payments to traders for amounts ofEUR 15 000 or more (see paragraph 5); and (v) some technical improvements which enhancethe overall efficiency of the prevention of money laundering (see paragraph 6). The ECB is, inparticular, consulted on these new improvements.
4. Firstly, the ECB welcomes the enhanced clarity on the money laundering legislative framework
that the draft law introduces. The ECB understands that the Banking and Financial Commissionand the Insurance Control Office regulate the obligations for institutions under the law of 1993by way of circulars. The draft law will strengthen the force of these obligations by conferringthis regulatory power on the Banking and Financial Commission, the Insurance Control Officeand the market authorities (Article 25 of the draft law). This power will allow these authoritiesto lay down the detailed arrangements for supervis ed institutions required by Chapter II of the
law of 11 January 1993 (identification of clients and internal organisation). More specifically,the new regulatory power will be used in order to determine a priori the organisational aspectsthat these institutions should consider when drawing up their internal rules. Proper internalorganisation and controls, and transparency of the anti-money laundering rules for allinstitutions, is an efficient way to prevent the use of the financial system for the purpose ofmoney laundering. The creation of this new regulatory power is welcomed as it will also allowthe relevant authorities to adapt to future adva nces in the standards developed by the relevant
international authorities, in particular the implementation of the recommendations of the FATF
(Financial Action Task Force) regarding action to combat the financing of terrorism.
5. Secondly, Article 14 of the draft law introduces a prohibition of payments in cash for physical
objects of a value of EUR 15 000 or more. This prohibition will ensure indirect control oftraders in high-value goods whose lack of legal status and subjection to a supervisory authoritywould make the application of the measures provided for by the Law of 11 January 1993inappropriate. According to the FATF experts, cash remains a major, if not primary, form inwhich illegal funds are generated today
3 and cash proceeds are usually found at the beginning of
the laundering process, that is at the placement stage. Accordingly, FATF Recommendation 24states that Countries should further encourage in general the development of modern andsecure techniques of money management, including increased use of checks, payment cards,direct deposit of salary checks, and book entry recording of securities, as a means to encouragethe replacement of cash transfers. Control or limitation of payments in cash should
                                                     
3 FATF XII, Report on money laundering typologies 2000-2001, 1 February 2001 (paragraphs 38 to 43).
3consequently be an appropriate method to prevent money laundering. The ECB notes that this
specific restriction on payments in cash does not affect the status of legal tender of banknotesand is compatible with Community law. This point was already underlined in recital 19 of theCouncil Regulation (EC) No 974/98 of 3 May 1998 on the introduction of the euro
4, which
expressly states that limitations on payments in notes and coins, established by Member Statesfor public reasons, are not incompatible with the status of legal tender of euro banknotes andcoins, provided that other lawful means for the settlement of monetary debts are available.Such means are available in Belgium.
6. Lastly, various technical amendments to existing laws are proposed in the draft law in order to
improve the efficiency of anti-money laundering efforts. More specifically, the new rules extendthe powers currently attributed to the Financial Information Processing Unit, the administrativeauthority in charge of processing and transmitting the relevant information concerning moneylaundering, including the possibility of asking for information from the judicial authorities,receivers and provisional administrators. In particular, the draft law extends the possibilityprovided to the Unit by the law of 11 January 1993 of blocking a transaction for 24 hoursbecause of the gravity or of the urgency of the affair in question, by up to two working days.The explanatory memorandum mentions that the Unit has used this power on approximately 100occasions since its creation in 1993. The memorandum also mentions that experience shows that24 hours could, in certain circumstances, be insufficient to allow for further investigations. TheECB understands that Article 12 of the law of 11 January 1993, as amended, does not affect theirrevocability and finality of payments in the sense of Directive 98/26/EC of 19 May 1998 onsettlement finality in payment and securities settlement systems
5. The new provision is therefore
deemed an adequate tool in the fight agains t money laundering within the existing legal
framework.
7. The ECB confirms that it has no objection to the competent national authorities making this
opinion publicly available at their discretion. 
Done at Frankfurt am Main on 30 September 2002.
The President of the ECB
[signed]
Willem F. DUISENBERG
                                                     
4 OJ L 139, 11.5.1998, p. 1.
5 OJ L 166, 11.6.1998, p. 45.