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Antwerp Traders Face Random Compliance Probes

May 9, 2017 10:26 AM   By Rapaport News
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Belgian inspectors are checking diamond companies’ offices at random, the latest in a series of inspections to prevent money laundering, the Antwerp World Diamond Centre (AWDC) has confirmed.

Inspectors from Federal Public Service (FPS) Economy — the Belgian equivalent of an economy ministry — started the audits on April 18 and will continue them until the end of June, the AWDC said in a note to traders last month.

Such checks have taken place annually since 2014, with 30 to 40 companies scrutinized each time. Usually, the FPS informs the AWDC in advance that it will be conducting random inspections. After that, the inspections may occur with or without notice, performed by one or two FPS Economy control officers.

Starting this year, the inspectors have assumed the authority of police officers, enabling them to impose fines and start investigations. If they find a company requires further inquiries or prosecution due to serious violations, they send a report to prosecution authorities. More minor wrongdoings can carry a fine of $544 (EUR 500) to $2,177 (EUR 2,000), depending on the company’s revenue and whether it repeats the offense.

As such, the AWDC has advised firms to keep their bookkeeping and client identification processes up-to-date and have them available at the company offices.

Shashin Choksi of Antwerp-based Swati Gems recently described how inspectors took five random supply invoices and five random sales invoices from his company’s files as part of the probe. The inspectors then asked for related documents, such as company registration papers and details of shareholders, he told Rapaport Magazine, adding that he viewed such procedures as an advantage to the local industry.

“No other diamond center is as strict as we are here,” Choksi said. “Thanks to this asset, with the support of our government, we can clearly make a difference, ensuring the reputation of our product better than anywhere else.”

Belgian diamond traders have been required to comply with the nation’s anti-money-laundering legislation since 2004. A 2013 royal decree added further regulations specifically for the diamond industry.

Under the rules, traders are required to appoint someone who will be responsible for anti-money-laundering activities. They must also carry out client identification, verify documents the company receives, tell the Belgian Financial Intelligence Processing Unit about any suspicious transactions, and submit an activity report to the license service of FPS Economy every year.
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Tags: AML, anti money laundering, Antwerp, Antwerp World Diamond Centre, AWDC, Belgian Financial Intelligence Processing Unit, Belgium, Compliance, diamond trading, Federal Public Service Economy, FPS, legal, legislation, Money Laundering, Rapaport News, Regulation, Shashin Choksi, Swati Gems
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