In order to comply with the EU directive, Belgium is implementing new regulations on market abuse. The preliminary draft law establishes and refines investigatory powers. How can you navigate the law?

Since June 2016, a new legal framework has applied to market abuse that takes place within the European Union. The Market Abuse Regulation (MAR) (596/2014) ensures that Member States' own regulations adapt to financial developments in order to prevent abuse on the financial markets (including derivatives) and commodities markets.

Three types of abuse have been identified:

•  Market manipulation;
•  Insider dealing;
•  Unlawful disclosure of restricted information.

The EU legislator believes that market abuse harms the integrity of financial markets and undermines public confidence in both securities and derivatives. It should be noted that the regulation's scope of application extends to traded financial instruments.

"Market integrity is essential for the financial markets to be integrated, effective and transparent." European Parliament, 16 April 2014

Belgium ensures compliance

On 31 March, the Belgian Council of Ministers approved a preliminary draft law (FR or NL)  which will apply the EU regulation on market abuse to Belgium. Although the regulations are directly applicable to Belgium, some of their provisions have required implementation in national law.

The preliminary draft law, once approved, will establish and improve investigatory powers. Which measures does it contain? As examples, we can cite disqualification from the profession, the request to hand over electronic communications data, police searches and confiscations, and new measures on market informers.

Sanctions are heavy. The EU now requires the imposition of fines totalling between 1 and 15 million euros, or 15% of the total annual turnover of the company in question.

A test for the repurchase of shares

The regulation transposed into law also affects trading to repurchase own shares. From now on, transactions to repurchase shares must comply with the provisions of the regulations in order to benefit from a presumption of legitimacy. And transactions must now be carried out on regulated markets or MTFs (multilateral trading facilities). The use of derivatives does not benefit from this presumption of legitimacy.

The bill to introduce this obligation in Belgium has been submitted to the Federal Parliament. If the draft bill is approved, B2B e-invoicing will become mandatory from 1 January 2026. Our experts explain why Belgium wants to introduce these new rules, what the implications are for your company and how we can better support you.

“The bill is consistent with international developments and initiatives at the European level,” says Nicolas De Vijlder, Head of Beyond Banking at BNP Paribas Fortis. "Europe's ambition is a harmonised digital standard. Structured e-invoicing between companies will also reduce the administrative burden of invoicing, enabling companies to work more efficiently and increase their competitiveness. The automation of VAT declarations will also help governments prevent tax fraud and adjust economic policies based on more qualitative data.”

Evolution rather than a revolution

“The new legislation is an evolution rather than a revolution,” adds Erik Breugelmans, Deputy Managing Director at BNP Paribas Factoring Northern Europe. "Digitalisation is becoming pervasive at all levels of society, as we have seen with the increase in electronic payments, as well as the additional obligations in recent years regarding electronic invoicing to the government. In this sense, the bill for mandatory electronic invoicing between companies is a logical next step. Our bank is happy to contribute to this process, although we do not intend to offer the same services as accounting software or fintechs. However, we are happy to help our customers with payments and financing."

The impact on businesses

“Customers need to be aware that the new regulations will have an impact on their internal and external processes,” continues Erik Breugelmans. "The majority of Belgian companies mainly serve an international market, which means that the introduction of electronic invoicing will be more complex for them than for companies operating in the domestic market. As the legislation will be introduced in one go, they need to start preparing now."

“The new rules will affect a company’s accounting department as well as its IT department,” emphasises Nicolas De Vijlder. "The procedural requirements are key, otherwise the automated process will not work. However, one of the main benefits of advanced automation is that everything can be done faster and more efficiently. The time between sending an invoice and paying it will be shorter and cash flows more predictable. In addition, it will also reduce the risk of error and fraud, as all transactions will pass through a secure channel."

Ready to offer you even more and better support

“Thanks to the far-reaching digitisation resulting from the new regulations, we will be able to further optimise payments,” concludes Erik Breugelmans. "As a bank, we need to finance our customers’ receivables as quickly and efficiently as possible, so that they have easier access to their working capital. In addition, because we have already gone through an entire process in terms of large-scale automation, we will be able to adapt quickly to the new rules. We can also draw on the expertise of the BNP Paribas Group, which is currently developing an e-invoicing solution for large companies."

Want to know more?

Listen to the episode on B2B e-invoicing :

• French version
• Dutch version 

From 1 May 2019, new legislative rules will apply for Belgian companies and associations.

On 28 February, the Belgian House of Representatives adopted a bill for a new Code on Companies & Associations. The aim? To modernise the current legal framework, align more closely with reality and help make Belgian companies more competitive in relation to their European colleagues.

High impact

The aim? To modernise the current legal framework, align more closely with reality and help make Belgian companies more competitive in relation to their European colleagues. The new legislation will enter into force from 1 May 2019 for new companies and associations and 1 January 2020 for all existing companies and associations (unless these opt in before that date). Mass conversion is likely to occur between 2020 and 2023. All existing companies and associations must use this period to review their articles of association and legal status.

Delay

The new rules would normally have entered into force on 1 January, but the bill's adoption was delayed by the government shenanigans in recent months (Prime Minister Michel submitted his government's resignation on 18 December 2018 after a Green-Red vote of no confidence, ed.). Although the new legislation has been approved by the House, it hasn't yet been published in the Belgian Official Gazette currently. Also, the implementing decrees will take a little longer. Nevertheless, the new rules will apply as of 1 May this year.

Some causes are more important than the pursuit of EBITDA. Without trees there can be no biodiversity, and flora, fauna, soil, water and air are all affected. That is why WeForest is mobilising companies to plant forests.

Reforestation is neither a luxury nor a question for hippies. It is indispensable for the climate and biodiversity, the quality of our soil and water, as well as for food; it is thus vital for the future of all species.

The solutions, which remain under-recognised, are simply waiting to emerge. They are not technical, do not adhere to the logic of extraction and do not call on limited natural resources. They are tremendously effective, draw their inspiration from natural ecosystems and entail integrating trees into fields. See also the article The full potential of reforestation.

We have pinpointed two relevant non-governmental initiatives: Ecosia, a search engine launched by a start-up in Berlin, has attracted 7 billion users and plants one tree for every 45 searches made – the equivalent of some 27 million trees planted to this day; secondly, the non-profit organisation WeForest is utilising its expertise in this area, its basis in science and its business network to engage in sustainable reforestation. We went to meet Marie-Noëlle Keijzer, the founder of WeForest, to hear her story.

From carbon offsetting to corporate 'water footprints'

In the early days, WeForest was not convinced by carbon offsetting, which it regarded as too reductive. Yet it was a means to connect with its target audience: companies anxious to measure, reduce and then offset the carbon emissions that they are not able to avoid. Today, the objective of 'net positive emissions' has been set, which also aims to offset past emissions.

It is obvious that environmental concerns now extend beyond carbon alone. Many are beginning to examine their water footprint. A new vision is taking hold, which entails development aid via the promotion of reforestation. "Moving countries out of poverty and doing more than simply planting trees and leaving: this is how companies now wish to act in a socially responsible way", explains Marie-Noëlle Keijzer, CEO of WeForest.

Intervening on vegetation, carbon, water, air and employment

With the 270 corporate clients that have joined it since 2011, WeForest planted almost 17 million new trees and restored 13,000 hectares of land by the end of 2017, and aims to double these figures by 2020. It offers high-impact marketing materials to customer companies with messages such as 'one sale = one tree planted'. 

In 2014, Brabantia decided to 'do something different'. It wanted to sell products, of course, but also give thought to global issues. Working alongside WeForest, the company entered into a joint financing project supporting reforestation. "Since Brabantia began to state on its website, on YouTube and on its packaging that one tree would be planted for every rotary dryer sold, it has seen a 25% increase in sales every year", explains the head of WeForest, citing well-substantiated case studies with certified benchmarks: "We go beyond the theoretical", she continues. "There is total transparency, with every customer receiving a GPS map of the hectares they have funded. We then ensure the forest is protected, approve our customers' projects and help develop the socio-economic activity of the entire region by initiating alternative revenue sources which create employment."

A tree is more valuable in the ground than on it

WeForest is not engaged in helping Zambia in order to maintain its reliance on international aid, but to educate the hundreds of farmers who chopped down all of their trees in order to sell them for firewood. By bringing them together, the association demonstrates that they do not have to clear trees to sell forestry chips, and that by selectively collecting biomass, they can provide heat without cutting a tree down. WeForest trains women to work as nursery growers, giving them a job, an income and an identity. It also supplies beehives to farmers who have begun to produce honey as a new source of income. Bees have other positive effects too, since they pollinate flowers, plants and fruit crops, for example. "It's really simple", affirms Marie-Noëlle Keijzer. "If we kill bees and birds by using pesticides and insecticides, we are preventing nature from doing its work."

Trees provide a habitat for animals and natural fertiliser for plants

In regions of Brazil where tree coverage is 3%, leopards have completely died out. Agriculture has supplanted forests wherever the ground is level. WeForest cannot operate across the entirety of the country, which is much too large. But they have created green corridors, and life has begun again. Trees and plants have been restored, attracting birds and animals that use them to move around, eat and reproduce.

Trees are also a natural source of fertiliser: corn grows more quickly when it is close to trees. They provide shade and retain water in the soil.

There are trees and trees

Not all reforestation projects are equal. Some trees boost the food supply or increase soil nitrogen levels (such as the lucerne), whereas others are detrimental to diversity. For example, no animals will live in palm tree plantations where the soil is also full of chemicals. "We won't solve the problem if we do nothing to change the causes of deforestation: intensive agriculture for the purposes of producing meat, for example", says Marie-Noëlle Keijzer, firmly convinced. Solutions exist, but everyone needs to accept their share of responsibility.

Sources: BNP Paribas Fortis, WeForest

With more financial resources, better coordination of national policies, improved data sharing and a common framework of legal and ethical rules, Europe now wants to ensure it can make up for its slow progress on artificial intelligence.

On 10 April, 24 EU countries (excluding Cyprus, Romania, Croatia and Greece) and Norway agreed to adopt a "European approach" to artificial intelligence – a technology highly likely to revolutionise various facets of our societies. The objective is clear: to give Europe the tools it needs to rival the technological giants of Asia and America. And with good reason, because European investment in AI lags behind the US and also China, which has announced a new plan to invest EUR 18 billion of public money by the year 2020.

Massive investment

Aware that fighting alone would leave them at a disadvantage, the signatories have clearly understood that they must leave aside their disagreements, pool their financial resources, coordinate national policies and devise a common framework. Although no sum of money has yet been put forward, the European Commission has also said it will ask member states and the private sector to invest a total of EUR 20 billion in research by 2020, alongside up to EUR 1.5 billion it intends to contribute itself. For its part, France has already announced that it will inject EUR 1.5 billion of public money into research on AI during the next four years. In addition to amending national legislation and increasing the funding available for AI, EU ministers have also pledged to create a number of pan-European research centres.

The tremendous potential of AI

The concept of artificial intelligence originated in the 1950s, when the British mathematician Alan Turing wondered whether a machine was capable of "thinking". However, it was during the first decade of this century that the technology began to take off. AI entails implementing a certain number of techniques that aim to give machines the ability to imitate, and even surpass, a form of actual intelligence. Since the first supercomputers capable of beating humans at chess using deep learning algorithms, technology has continued to advance in ways that demonstrate that robots can overtake humans. And although the tidal wave predicted has perhaps not quite materialised yet, the potential of AI does seem extraordinary and likely to disrupt numerous sectors, from health and aviation to logistics, the armed forces and banks.

Ethical rules as a comparative advantage

Artificial intelligence is also the source of a wide range of fears. Top of the list is job losses on a vast scale. But at the same time, others are predicting the opposite. The McKinsey Global Institute, for example, contends that automation and AI will help create 200,000 jobs in Belgium by 2030. The other major concern is the risk of robots that are not only ultra-intelligent, but also possess cognitive abilities that enable them to evade the control of their creators. This dilemma, which touches on legal, philosophical and ethical questions, is also driving the EU to adopt a position. Its stated objective is to move towards a framework of legal and ethical rules that guarantees to keep humans at the heart of developments, deployments and decision-making in relation to AI, as well as prevent the creation and use of harmful AI applications. And such ethical standards will be viewed as a potential competitive advantage for European Union companies.