The focus of Belgian prosecutors has increased with respect to sanctions, corruption and money laundering. Cyber criminality rising during the Covid-19 pandemic inevitably calls for a prosecutorial response. The College of Attorneys General still encourages the settling of financial and economic criminal cases, which effectively translates into a continuing increase in criminal settlements.
Cross-border cooperation between judicial and regulatory authorities is intense, particularly in connection with the transfer of information, both at an EU and global level. Financial intermediaries continue to be targeted in fraud matters, especially in complex cross-border cases. We expect the focus on business responsibility for human rights to increase in 2021.
- Investigations trends/developments
- Significant law reforms impacting corporate criminal liability
- Internal investigations – key developments
- Sectors targeted by law reforms or enforcement action
- Cross-border co-ordinated enforcement activity
- Financial crime issue predictions for 2021
We continue to see an increase in enforcement action for (i) corruption; (ii) cyber criminality; (iii) economic and financial crime, including tax fraud; (iv) terrorism; and (v) human trafficking offences.
While overall crime statistics are decreasing, cybercrime is firmly on the rise: 2019 saw a 30% year on year increase in reported cybercrimes, a trend that only accelerated with the outbreak of the Covid-19 pandemic in early 2020 (in particular for online fraud and ransomware attacks). Fighting cybercrime continues to be a priority for Belgian authorities, who increasingly engage in cross-border enforcement and information exchange. Also, we see a trend in Belgian law enforcement actively cooperating with companies seeking to recover systems and data after a cyber-attack.
Seven months after the EU deadline passed, on 20 July 2020, Belgium finally implemented the Fifth AML Directive (2018/843/EU). As a result, several key amendments were made to the existing Belgian AML Act, including the introduction of new “obliged entities”.
The implementation of a Belgian UBO register (another requirement under the AML Directives) had already occurred in October 2018 but was initially subject to a “tolerance period” granted by the Belgian Federal Public Finance Department. The “tolerance period” ended on 31 December 2019, and from 1 January 2020 breaches of UBO-related obligations may result in criminal and/or administrative penalties.
On the sanctions and embargoes front, in addition to criminal liability, breaches of EU sanctions are now also subject to administrative fines by the Belgian Ministry of Finance and Economy, as are breaches of the EU Blocking Regulation that prohibits EU entities or individuals from complying with certain U.S. sanctions and export controls1. Along with the first listings under the EU cyber sanctions regime2 and reports on an impending revision of the sanctions landscape under Belgian law, we are expecting greater enforcement and corporate liability to follow.
There is no regulatory or statutory framework in Belgium specifically dealing with internal investigations. Corporates are in principle free to conduct internal investigations in parallel with criminal or regulatory investigations without any positive duty to disclose the results of the internal investigation. However, general GDPR requirements apply and must be taken into account.
The authorities may seize materials produced in the process of an internal investigation in the context of a search, however, these materials may be protected by legal privilege if an attorney-at-law is involved or, under certain conditions, if produced and sent by in-house counsel.
As an unexpected extra to implementing 5MLD into Belgian law (see above), the Belgian legislator extended the scope of the Belgian AML Act to the professional football sector in Belgium. As a result, football clubs, player agents and the Royal Belgian Football Association are now subject to the Belgian anti-money laundering framework. This triggered an outright revolution in the sector. This change was introduced at the very last hour in the legislative process, reportedly in response to the 2018 Belgian football fraud scandal that is currently the subject of an extensive criminal investigation into private corruption and money laundering (in addition to other criminal investigations recently initiated involving certain football clubs and player agents).
In addition to this specific reform, because of the opacity of money flows in complex cases, we see a continued focus by Belgian prosecutors on financial intermediaries when investigating and prosecuting fraud matters (often based on aiding and abetting).
We have seen an increase in cross-border fraud investigations coordinated at EU-level by the European Anti-Fraud Office (OLAF) and then handed over to Belgian authorities with a recommendation to prosecute. Because OLAF has no prosecutorial powers, it needs to rely on local authorities for repressive measures. A new regulation is being developed to ensure smooth cooperation between OLAF and the European Public Prosecutor’s Office (EPPO) (expected to become operational at the beginning of 2021) and to enhance the effectiveness of OLAF’s investigations. We expect a rise of OLAF-coordinated cross-border investigations as a result of these developments, especially given the strong stance taken by the EU regarding the protection of its financial interests.
Detecting and preventing corrupt practices, money laundering, sanctions/embargoes and cyber security will stay high on the agenda for 2021.
We also expect business responsibility for human rights to be in the focus of GCs over the next year. Companies operating in the EU should be on the lookout for the first listings under the recently adopted EU global human rights sanction regime, which will add yet another layer to the sanctions framework they must comply with. The EU Commission is also expected to publish a draft directive on mandatory human rights and environmental due diligence in Q2 2021, which will have far-reaching consequences for Belgian businesses given the absence so far of any corporate due diligence obligations under Belgian law.
This article is part of the Allen & Overy Cross-border White collar Crime and Investigations Review. Please visit the review homepage for our overviews and insights in other jurisdictions.
Allen & Overy LLP’s group has been handling cases of money laundering, tax fraud, embezzlement, and cybercrime, among other areas. Regulatory investigations and compliance matters are additional core strengths.
Ranked Tier 1 – 2019, Legal 500, Fraud and White collar Crime
The team is led by litigator Joost Everaert, who frequently advises on criminal risk, compliance matters and investigations, and is instructed by defendants and claimants… and negotiations with prosecutors.
Ranked in the “Hall of Fame” – 2020, Legal 500, Fraud and White collar Crime
The white collar crime and investigations practice at Allen & Overy LLP benefits from a hands-on and available team, that never loses focus on key topics.
Ranked Tier 1 – 2020, Legal 500, Fraud and White collar Crime
Counsel Nanyi Kaluma is particularly experienced in cross-border bribery and money laundering investigations.
Ranked as “Rising Star” – 2020, Legal 500, Fraud and White collar Crime
Download the Cross-Border White Collar Crime and Investigations Review
The 'Cross-Border White Collar Crime and Investigations Review' analyses the latest developments and trends, and highlights the most significant among the current and emerging issues that white collar crime and investigations in-house counsel should prioritise in the year ahead.