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Antwerp
By Marc Goldstein
On December 13, 2016, the Antwerp World Diamond Center (AWDC) organized a seminar dedicated to state-of-the-art antimoney-laundering (AML) policies, which will be implemented shortly in Europe and in Belgium in particular.
Trisevgeni Stavropoulos, head of Legal and Compliance at AWDC, explained, “To bring us up to speed, let’s remember that antimoney-laundering and antiterrorist financing guidelines are being established at the supra-national level by global organizations such as the Financial Action Task Force (FATF), the World Bank, the Organisation for Economic Co-operation and Development (OECD), the UN, etc. At the European level, those guidelines are being translated through a directive, which is to be integrated into their legislation by each of the 27 constitutive countries. We’re now at European Union (EU) AML-Directive number five. Directive number four was released in 2015 and all national countries have until June 2017 to implement it into law Therefore talks are being held between AWDC representatives, EU and the Belgian government. The European countries can impose stricter measures than the European directive, should they decide to do so, which has always been the case for Belgium.” Once the law has been passed at the Belgian national level, a Royal Decree can be enacted explaining or fine-tuning the various aspects for one or several sectors in particular.
Even though the purpose of the AML laws is laudable, it’s a fact that on a practical level, the matter is more cumbersome and difficult to handle. Paul Kaplan of Bellataire Diamonds stressed, “Even well-informed, well-meaning customers from the U.S. do not respond quickly and do not understand why we ask for more information than is required by American AML regulations. It too often takes email badgering to get all the information. If a customer is evaluated and is not considered a high risk, we can simplify our request and get all the information we need by asking for copies of documents that supply the necessary information, reducing the often illegible line-by-line filling out of forms. By collecting the signed ultimate beneficial ownership (UBO) forms, business cards, company registration documents and directors’ passports, the same information is given, relatively painlessly. My guess is that here in Antwerp, 70 percent of the people can’t get all the required AML information.” Nancy Arnouts of Mackie Diamonds, elaborated, “What are we to do if the client doesn’t supply all required documentation? Not sell is just out of the question. We have some clients in Hong Kong or from other regions who would even refuse to supply the material because they see it as an insult!” Stavropoulos explained, “We certainly understand there’s a lot of friction between fulfilling AML requirements and maintaining privacy. We’re working on that together with the government and we’re sparing no efforts to give diamantaires a fair chance. For example, we’re providing the database of Bureau Van Dijk, a provider of global business data, for free to the diamond sector. We’re also taking into account the feedback we’re receiving from the sector.”
According to Stavropoulos, the following points will be addressed by the future Belgian law, which is expected to be passed before July or August 2017. - Cash limit should go down from €3,000 (approximately $3,700) to zero for a few high-risk sectors such as gold, diamonds, etc.
- A risk-based approach will probably be approved. The due diligence level is expected to be simplified for transactions that are considered as not involving a high risk of AML or antiterrorist activity. On the other hand, however, there should be enhanced due diligence when risk is deemed high.
- The new law is also expected to require the creation of a Belgian national database where all Belgian companies will have to be listed together with all their UBOs. This tool would then help diamond companies in particular to fulfill their know your customer (KYC) obligations.
- Fourth European Directive also mandates that nations are to fine-tune their definitions of UBO in the sense of who has actual control of the companies.
- Royal Decrees should also be promulgated with at least two purposes:
- defining the parameters of what is low and high risk in the diamond trade
- specifying that, together with some governmental bodies or other sectors, diamantaires should be allowed to have access to the UBO database to be created.
Article from the Rapaport Magazine - January 2017. To subscribe click here.
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