Belgium -- Travel Rule Implementation Regulatory Overview

The FATF Travel Rule for crypto-assets in Belgium is being implemented primarily through European Union regulations, which are directly applicable in Belgium.

Here's a breakdown:

1. Whether Adopted

• EU Level: Yes, the FATF Travel Rule (Recommendation 16) has been adopted at the EU level through the recast Transfer of Funds Regulation (TFR). This is Regulation (EU) 2023/1113, which specifically extends the rules on information accompanying transfers of funds to transfers of crypto-assets.
• Belgian Level: As an EU Regulation, Regulation (EU) 2023/1113 is directly applicable in Belgium without the need for national transposition into Belgian law. Belgium's existing AML/CFT framework (primarily the Law of 18 September 2017) provides the national enforcement and supervisory structure, and will be supplemented by the TFR.

2. Effective Date

• The recast Transfer of Funds Regulation (EU) 2023/1113 will apply from 30 December 2024.
  • This means VASPs operating in Belgium must comply with the Travel Rule requirements for crypto-asset transfers from this date.

3. Threshold Amounts

• For transfers of crypto-assets involving a Crypto-Asset Service Provider (CASP) (the term used in MiCA and TFR), the Travel Rule applies to all transfers, regardless of value.
• Unlike traditional wire transfers where there might be a threshold for full data collection, for crypto-asset transfers handled by CASPs, there is no de minimis threshold. Information must be collected and transmitted for every transaction.
• Specific (and different) rules apply to transfers to or from unhosted wallets, but for transfers between CASPs, the "no threshold" rule is key.

4. Which VASPs Are Covered

• The Travel Rule in Belgium (via the TFR) covers all Crypto-Asset Service Providers (CASPs) that are authorised or registered to provide crypto-asset services in the EU, as defined under the Markets in Crypto-Assets (MiCA) Regulation (EU) 2023/1114.
• This includes, but is not limited to:
  • Crypto-asset exchanges (trading platforms)
  • Providers of crypto-asset transfers
  • Custodian wallet providers
• In Belgium, the Financial Services and Markets Authority (FSMA) is the competent authority for registering and supervising VASPs under the existing national AML/CFT framework. These registered entities will be subject to the TFR.

5. Technical Implementation Requirements

• Information Collection: CASPs must obtain and hold specific information about the originator and beneficiary of a crypto-asset transfer.
  • Originator Information: Name, crypto-asset account number (or transaction identifier), address (or national ID/customer ID, date/place of birth).
  • Beneficiary Information: Name, crypto-asset account number (or transaction identifier).
• Information Transmission: The originator's CASP must transmit this information to the beneficiary's CASP immediately and securely.
• Verification: CASPs must verify the accuracy of the originator's and beneficiary's information based on documents or data from reliable independent sources.
• Monitoring and Risk Assessment: CASPs must establish risk-based procedures for identifying and managing transfers that lack the required information.
• Data Protection: Implementation must comply with the General Data Protection Regulation (GDPR) regarding the collection, processing, and storage of personal data.
• Interoperability: While the TFR doesn't mandate a specific technical protocol (e.g., TRISA, OpenVASP, Travel Rule Protocol), it implies the need for CASPs to adopt or develop interoperable solutions to facilitate the secure and immediate exchange of data between different CASPs globally. Industry solutions are rapidly evolving to meet these requirements.

6. Penalties for Non-Compliance

• EU Framework: Regulation (EU) 2023/1113 states that Member States (like Belgium) "shall lay down rules on penalties applicable to infringements of this Regulation and shall take all measures necessary to ensure that they are implemented."
• Belgian Framework: Penalties for non-compliance with AML/CFT obligations are already established in Belgian law, primarily in the Law of 18 September 2017 on the prevention of money laundering and terrorist financing and on the limitation of the use of cash (as amended).
  • Administrative Penalties: The FSMA, as the supervisory authority, can impose significant administrative fines. These can range from hundreds of thousands up to several millions of euros, or a percentage of the annual turnover (e.g., up to 10% of the total annual turnover for legal persons). They can also include public reprimands, revocation of registration, and injunctions.
  • Criminal Penalties: Serious or repeated breaches can also lead to criminal sanctions, including imprisonment for natural persons and substantially higher criminal fines for both natural and legal persons.
  • The specific penalties are determined based on the nature, severity, duration, and intent of the infringement, as well as any mitigating or aggravating factors.

Referenced Legislation and Guidance with URLs

• FATF Recommendations (Recommendation 16):
  • https://www.fatf-gafi.org/publications/fatfrecommendations/documents/recommendations.html
• Regulation (EU) 2023/1113 (Recast Transfer of Funds Regulation - TFR):
  • https://eur-lex.europa.eu/eli/reg/2023/1113/oj
• Regulation (EU) 2023/1114 (Markets in Crypto-Assets - MiCA):
  • https://eur-lex.europa.eu/eli/reg/2023/1114/oj
• Directive (EU) 2018/843 (Fifth Anti-Money Laundering Directive - 5AMLD, context for VASP inclusion):
  • https://eur-lex.europa.eu/eli/dir/2018/843/oj
• Belgian Law of 18 September 2017 on the prevention of money laundering and terrorist financing (Loi du 18 septembre 2017 relative à la prévention du blanchiment de capitaux et du financement du terrorisme et à la limitation de l'utilisation des espèces):
  • This law is accessible via the Belgian official journal (Moniteur belge / Belgisch Staatsblad) website. You can search for it on https://www.ejustice.just.fgov.be/cgi_loi/loi_a1.pl (choose "Lois et Arrêtés" and search by date/title).
• FSMA (Financial Services and Markets Authority) - Belgian Regulator for VASPs:
  • General information on crypto-assets and regulations: https://www.fsma.be/en/consumers/crypto
  • Information regarding VASP registration and AML supervision: https://www.fsma.be/en/professionals/crypto-asset-service-providers
  • Circular FSMA_2020_15 (Requirements for VASPs under current Belgian AML Law): https://www.fsma.be/en/news/circular-fsma_2020_15-registration-platforms-exchange-virtual-currencies-fiat-currencies-and-custodian

Key Takeaways for Belgium:

• The Travel Rule is directly applicable in Belgium from December 30, 2024, via EU Regulation 2023/1113.
• No threshold for transactions involving CASPs.
• All CASPs (as defined by MiCA) are covered.
• Compliance requires robust technical solutions for data collection, verification, and transmission, adhering to GDPR.
• Significant penalties for non-compliance are in place under Belgian AML law, enforced by the FSMA.