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Anti-money laundering obligations

Belgian law and the third European directive oblige auditors in Belgium to cooperate with the authorities against money laundering and terrorist financing. While the auditor does not have a responsibility to actively search for money laundering activities, there is an obligation for the auditor to cooperate with the Belgian financial intelligence unit (CFI/CTIF). This obligation also exists for other professions, such as bankers, lawyers, notaries.

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The role of the auditor

When establishing a client business relationship, the auditor must evaluate the risk profile of his new client and establish the identity of the real client, take all necessary measures to discover who the beneficial owner of a prospective client is and obtain an understanding of the ownership and control structure of the client.

Where the auditor is unable to respect his obligation to identify the client, the auditor may not establish a client business relationship. The auditor must verify the identification of clients and their agents or beneficial owners on the basis of documents, data or information from a reliable and independent source (which will usually be the acts of incorporation, the bylaws, the publication of authorisation rights, a list of directors in the case of companies and the identity card or passport for individuals). The entity is legally required to communicate to its statutory auditor the identity of the shareholders / beneficiaries ultimately holding more than 25% of its shares.

During the period of the engagement, there is an ongoing obligation to monitor the client relationship and to document any change in the client risk profile. The auditor will need to perform specific supplementary substantive tests for those clients with a profile showing a risk higher than normal – examples of specific sectors and statements have been published (weapon industry, diamond sector, new technology…).

The IRE/IBR requires the audit firms to insert a supplementary declaration in the representation letter to be signed by the company’s management, where management declares that it has no knowledge of any facts that could lead to money laundering or terrorist financing.

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