Netherlands

‘Our country has been more lax than what Europe asks for a year and a half’

Belgian banks are obliged to report suspicious transactions, for example if they suspect that money is being deposited into a bank account that may have been earned through organized fraud. If they do not report the suspicious deposit, the bank can be held responsible for money laundering. The reporting obligation currently only applies to ‘serious’ tax fraud, but not to ‘ordinary’, smaller fraud crimes.

If it depends on Europe, that will change. Or rather: that should have happened a long time ago. By 3 December 2020 at the latest, our country had to transpose the new European rules against money laundering into Belgian law. That has still not fully happened. Europe has meanwhile started proceedings against our country, which could lead to a conviction at the European Court of Justice.

House-garden-and-kitchen fraud

Everything revolves around the distinction between ‘serious’ and ‘normal’ fraud. Minister of Justice Vincent Van Quickenborne does not want banks and accountants to be jointly responsible for house-garden-and-kitchen fraud. “A bank or lawyer who literally accepts 1 euro of ‘possible’ black money could be prosecuted if they did not report this,” Van Quickenborne said.

To avoid a “witch hunt for every taxpayer”, the minister tried to introduce an exception to spare banks and some other professions. But that was brushed aside by the Council of State. Result: nothing will change for the time being. “As a result, our country has been more lax than what Europe demands for a year and a half,” says professor of tax law Michel Maus (VUB).

However, the federal government wants to raise 1 billion euros by 2024 to fight tax and social fraud. This is only feasible if the fight against fraud is significantly increased. There is annoyance within the government about the attitude of Open Vld, which is said to drag on too much. For example, the liberals recently opposed a plan by Minister of Finance Vincent Van Peteghem (cd&v). He wanted to give the tax authorities more time to deal with complex fraud files. “I don’t understand why the liberals don’t want to give tax inspectors the time,” said Van Peteghem.

1 billion euros

Tax experts do not agree on whether the new European rules are really that useful. Proponents say banks will not be prosecuted if they can show that they acted in good faith. Opponents fear that, as a precaution, banks will suddenly make a huge number of reports to the tax authorities.

“Then you get a tsunami of reports that can never be treated anyway,” says Michel Maus. “And then the tax authorities have so much work that major fraudsters can slip between the meshes of the net. An alternative is to depenalize petty fraud. But you can never sell that politically: then the government will be criticized that it apparently does not consider fraud important.”

‘Our country has been more lax than what Europe asks for a year and a half’
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