Corruption and politically exposed persons

The number of files reported in 2010 related to corruption is on the rise compared to 2009 as well as the amounts of these files.

2008 2009 2010 % 2010

Number of files 10 4 9 0,72

Laundered amount(1) 1,71 1,69 5,96 1,00

(1)

Amounts in million EUR

The main characteristics of the files reported in 2010 remain relevant. - Non-financial professions are used as third-party business introducer; - Countries known to be untransparent financial centres are used; - Belgium is used as a transit country;

- Accounts in Belgium are used rather than in the country of origin of politically exposed person25 to conceal transactions and avoid them being detected.

International experience (FATF and others) as well as recent events demonstrate to which extent corruption cases are brought to light in many a political crisis. More than ever before particular attention should be paid to transactions carried out by politically exposed persons wishing to partly or entirely invest the proceeds of their illegal activities by using the financial system.

As a result of crisis situations in various North African countries CTIF-CFI published various warning on its website early 2011. The disclosing entities were asked to remain alert in case of transactions carried out by politically exposed persons26.

1.7.2. Public Prosecutor’s Office

Breakdown of the number of files and the total laundered amount reported in 2010 related to corruption by Public Prosecutor’s Office

The table below provides a breakdown of the number of files and the total laundered amount by Public Prosecutor‟s Office. Most of the files (33,34 %), also representing the highest laundered amount, was reported by CTIF-CFI to the Federal Public Prosecutor‟s Office.

Total number 2010 Total number % Total number 2010 Total amount % Federal Public Prosecutor‟s Office 3 33,34 3.177.877,14 53,28 Brussels 2 22,22 211.205,00 3,54 Charleroi 2 22,22 739.324,83 12,40 Antwerpen 1 11,11 1.141,06 0,02 Tournai 1 11,11 1.834.640,00 30,76 Total 9 100 5.964.188,03 100

Breakdown of the number of files reported in 2010 related to corruption by judicial follow- up

The table below shows that a judicial investigation is underway in 11,11% % of the reported files and 44,44 % of the files has been dismissed.

2010 % 2010

Judicial investigation 1 11,11

Dismissal 4 44,44

Police investigation 3 33,33

No information received yet 1 11,11

Total 9 100

In three cases reported to the Federal Public Prosecutor‟s Office a police investigation is underway.

1.7.3. Cases

Case 1: Money laundering – corruption – untransparent financial centres

Offence Money laundering

Corruption

Parties involved Natural person

Legal person

Sectors involved Financial institutions

Channels used International transfers

Jurisdictions involved

Belgium, Benin, South Korea, Cyprus, France

Disclosing entities Bank

Warning signals - The financial transactions did not correspond to the anticipated

nature of the business relationship.

- Involvement of a non-financial profession

- No economic rationale for opening an account in Belgium (no business activities in Belgium or Europe)

- No convincing explanation by the customer.

- The individual is mentioned as “discrete adviser” of the minister of defence of a country where the risk of corruption in high

In one year and a half the Belgian account of a company from Central Africa was credited with four international transfers for a total amount of over 2,2 million USD by order of a company in electronics in Asia.

The account of this African company was opened two year prior at request of an accountancy fiduciary as the company wanted to do business with companies in Belgium and Europe and wanted to place orders and pay suppliers using this account. The manager did not reside in Belgium but in Africa.

These four international transfers were followed by transfers to South Korea, Cyprus and also to France.

The transactions on these accounts clearly did not correspond to the anticipated nature of the business relationship, i.e. paying suppliers in Europe.

According to press articles an individual whose identity was almost identical to the person involved was the adviser of a minister of defence of a country in Central Africa.

Other articles on the Internet mentioned development projects involving a South Korean company and donations from this company to the army of this Central African country to close the deal.

Case 2: Corruption and fraud detrimental to the financial interests of the European Union

Offence Money laundering

Corruption

Fraud detrimental to the financial interests of the European Communities

Parties involved Legal persons

Natural persons

Sectors involved Financial institutions

Channels used Domestic transfers

International transfers

Jurisdictions involved Belgium, Various countries in the European Union, Eastern

Europe, Africa

Disclosing entities Bank

Warning signals Large and excessive transfers without clear explanations to

private individuals on an account for commercial use

The account in Belgium of a Belgian consultancy company was credited with transfers for more than three million EUR from the European Commission. These were followed by transfers to a range of companies in the European Union, Eastern Europe and various African countries.

Various substantial transfers to private individuals were carried out without any legitimate reason.

Research showed that some of these individuals were probably able to influence the assignment of contracts to the consultancy company.

Moreover, various investigations into corruption had been opened against the consultancy company and the manager when granting a project for European development aid and assistance programmes.

1.8. Terrorism, terrorist financing, including proliferation financing