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)
Date: 2002-09-30
Institutions: European Central Bank
Subjects: Belgium, fight against crime, financial stability, money, money laundering, national law, payment system

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  draft  law  amending  the  law  of  11  January  1993  on

prevention of  the  use  of the financial  system  for  the  purpose of  money  laundering  (the “draft

law”).

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 second

and  fifth  indents  of  Article  2(1)  of  the  Council  Decision  98/415/EC  of  29 June  1998  on  the

consultation  of  the  ECB  by  national  authorities  regarding  draft  legislative  provisions1,  as  the

legislative proposal contains provisions concerning, amongst others, restriction on payments in

cash and new obligations for the financial sector that may have an impact on means of payment

and  payment  systems.  In  accordance  with  the  first  sentence  of  Article 17.5  of  the  Rules  of

Procedure of the European Central Bank, the Governing Council of the ECB has adopted this

opinion.

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  the

financial system for the purpose of money laundering2 by: (i) extending the obligations imposed

by the law of 11 January 1993 to lawyers, who must, through their self-regulatory body, (i.e. the

Head of their Bar Association) inform the relevant authorities of any suspicions they may have;

and  (ii)  eliminating  the  distinction  between  “ordinary  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 the

Financial  Information  Processing  Unit  all  facts  which  might  be  an  indication  of  money

laundering, and no longer just those facts which are likely to constitute evidence of laundering).

1 
2 

OJ L 189, 3.7.1998, p. 42.
OJ L 344, 28.12.2001, p. 76.

                                                     
In  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  only

transpose  the  Directive.  In  addition,  it  introduces  other  improvements  to  the  prevention  of

money laundering by: (iii) giving a regulatory power 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  of

EUR 15 000 or more (see paragraph 5); and (v)  some  technical improvements  which  enhance

the overall efficiency of the prevention of money laundering (see paragraph 6). The ECB is, in

particular, 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 Commission

and the Insurance Control Office regulate the obligations for institutions under the law of 1993

by way of circulars. The draft law will strengthen the force of these obligations by conferring

this regulatory power on the Banking and Financial Commission, the Insurance Control Office

and the market authorities (Article 25 of the draft law). This power will allow these authorities

to lay down the detailed arrangements for supervised 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 aspects

that  these  institutions  should  consider  when  drawing  up  their  internal  rules.  Proper  internal

organisation  and  controls,  and  transparency  of  the  anti-money  laundering  rules  for  all

institutions,  is  an  efficient  way  to  prevent  the  use  of  the  financial  system  for  the  purpose  of

money laundering. The creation of this new regulatory power is welcomed as it will also allow

the relevant authorities to adapt to future advances 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  of

traders in high-value goods whose lack of legal status and subjection to a supervisory authority

would  make  the  application  of  the  measures  provided  for  by  the  Law  of  11  January  1993

inappropriate.  According  to  the  FATF  experts,  cash  remains  a  major,  if  not  primary,  form  in

which illegal funds are generated today3 and cash proceeds are usually found at the beginning of

the laundering process, that is at the placement stage. Accordingly, FATF Recommendation 24

states  that  ‘Countries  should  further  encourage  in  general  the  development  of  modern  and

secure  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 encourage

the  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).

2

                                                     
consequently 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 banknotes

and is compatible with Community law. This point was already underlined in recital 19 of the

Council  Regulation  (EC)  No  974/98  of  3  May  1998  on  the  introduction  of  the  euro4,  which

expressly states that ‘limitations on payments in notes and coins, established by Member States

for public reasons, are not incompatible  with the  status  of legal tender  of  euro  banknotes and

coins,  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 extend

the powers currently attributed to the Financial Information Processing Unit, the administrative

authority in charge of processing and transmitting  the relevant information concerning  money

laundering,  including  the  possibility  of  asking  for  information  from  the  judicial  authorities,

receivers  and  provisional  administrators.  In  particular,  the  draft  law  extends  the  possibility

provided  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 100

occasions since its creation in 1993. The memorandum also mentions that experience shows that

24 hours could, in certain circumstances, be insufficient to allow for further investigations. The

ECB understands that Article 12 of the law of 11 January 1993, as amended, does not affect the

irrevocability and finality of payments in the sense of Directive 98/26/EC of 19 May 1998 on

settlement finality in payment and securities settlement systems5. The new provision is therefore

deemed  an  adequate  tool  in  the  fight  against  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 
5 

OJ L 139, 11.5.1998, p. 1.
OJ L 166, 11.6.1998, p. 45.

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