Belgian subsidiaries and branches

Comments and recommendations by the NBB

This page pertains to subsidiaries governed by Belgian law or branches established in Belgium that are part of a group of which the parent company is a financial institution governed by foreign law (of another EEA country or a third country). In such a case, as the Belgian AML/CFTP legislation and regulations have a territorial scope, it should be ensured that the coordination in the area of AML/CFTP that exists at group level is without prejudice to the legal capacity of subsidiaries governed by Belgian law and of branches established in Belgium to fulfil their legal and regulatory AML/CFTP obligations in Belgium.

For this purpose, the Belgian entity (a subsidiary governed by Belgian Law or a branch established in Belgium) should analyse the compliance of the group policies and procedures with the legal and regulatory AML/CFTP provisions applicable in Belgium (see point 1) and ensure that its parent company, if necessary, takes certain measures guaranteeing its permanent ability to comply with these provisions (see point 2). If all or some of the tasks of the Belgian entity’s AMLCO are outsourced to the parent company or to another entity of the group, particular attention should also be paid to the recommendations by the NBB in this area (see point 3).

1. Analysis of compliance of group AML/CFTP policies and procedures with the legal and regulatory AML/CFTP provisions applicable in Belgium

In accordance with Article 26 of the Anti-Money Laundering Regulation of the NBB, the NBB expects the AMLCOs of Belgian subsidiaries or branches that are part of a foreign group to assess, before implementing the ML/FT risk prevention policies and procedures defined at group level, whether these comply with the provisions referred to in Article 8 of the Anti-Money Laundering Law and with the provisions of the Anti-Money Laundering Regulation of the NBB. This compliance analysis should be retained within the Belgian entity and should be available for submission to the NBB at its first request.

If the ML/FT risk prevention policies and procedures defined at group level could potentially impede the proper implementation of the aforementioned provisions by the Belgian entity, the Belgian entity’s AMLCO should ask its parent company for an exemption from the policy and procedures defined at group level in order to remedy the incompatibility found. Where it is not possible to bring the measures imposed by the group into compliance with the aforementioned provisions by applying this exemption procedure, the AMLCO should inform the NBB to enable the latter to examine the consequences of this situation and determine the measures to be taken to remedy it, where appropriate in the context of its collaboration with the competent supervisory authority of the country of origin.

2. Governance mechanisms within the group 

In terms of governance, the group’s organisation and management should not run counter to the legal and regulatory AML/CFTP provisions to which the subsidiaries governed by Belgian law and the branches established in Belgium are subject. 

For instance, it should be ensured that appropriate internal mechanisms within the group allow the autonomy of the Belgian entity’s management bodies in relation to AML/CFTP to be maintained. These mechanisms should be based in particular on:

  1. an adequate allocation of tasks between the AMLCO of the group and the Belgian AMLCO; 
  2. a governance system at the level of the parent company that is respectful of the autonomy of the Belgian entity in relation to AML/CFTP, and particularly of the fact that the Belgian entity’s AML/CFTP policy is effectively managed by the Belgian financial institution’s management bodies (board of directors and management committee or senior management);
  3. a system for the mutual exchange of information within the group which enables both the AMLCO of the group and the AMLCO of the Belgian entity to receive useful information; and
  4. a system for managing conflicts of interest within the group that covers the aspects related to AML/CFTP.

The management bodies (board of directors and management committee or senior management) of the subsidiary governed by Belgian law or of the branch established in Belgium should ensure that these mechanisms are implemented at the level of the parent company. Additionally, they should ensure that the parent company takes full account of the need to provide the Belgian entity’s AMLCO or, where appropriate, the AML unit with adequate human and technical resources to enable it to comply effectively with the Belgian legal and regulatory AML/CFTP obligations. Particular attention should also be paid to the resources of the Belgian entity’s internal audit function, as it must ensure that the AML/CFTP policy implemented within the Belgian entity is in full compliance with the legal and regulatory AML/CFTP provisions applicable in Belgium.

3. Outsourcing of tasks of the Belgian entity’s AMLCO within the group

The recommendations above also apply if all or some of the tasks of the Belgian entity’s AMLCO are outsourced to the foreign parent company or to another entity of the same group.

As regards the compliance analysis of group policies and procedures referred to in point 1:

  • in case of partial outsourcing, the analysis should be performed by the Belgian entity’s AMLCO with regard to all his tasks and should be completed by an impact analysis of this outsourcing which demonstrates that it does not impair compliance with the legal and regulatory AML/CFTP provisions applicable in Belgium;
  • if all tasks of the Belgian entity’s AMLCO are outsourced to the parent company or to another entity of the same group, the aforementioned compliance and impact analyses of the outsourcing should be performed, as the case may be, by the AMLCO or by the senior officer acting as AMLCO, where appropriate assisted by the liaison on the Belgian entity’s payroll. This analysis should be retained within the Belgian entity and should be available for submission to the NBB at its first request.

Moreover, the group’s internal governance mechanisms included in point 2 above are fully applicable. The Belgian entity should also take particular care to ensure that these governance rules are properly complied with at the level of the parent company.

For further information on outsourcing, see also the pages “Governance” and “Performance of obligations by third parties”.  

Disclaimer: This English text is an unofficial translation and may not be used as a basis for solving any dispute