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A new central register for business loans has arrived in Belgium

Highlight | Dieter Veestraeten / Jan van Loon

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By Act of 28 November 2021 a new legal framework for a central register of loans to companies has been created.

The new register must aid the Belgian National Bank to fulfil its duty to centralize all information on loans, which it currently does through its Central Corporate Credit Register (CCCR) (Centrale voor kredieten aan ondernemingen (CKO)/Centrale des credits aux entreprises (CCE)). This system is now being replaced.

It has been proven that this register was insufficient and that the collection of more detailed information must be the way forward. This new approach is said to improve the National Bank’s prudential control and the economy’s financial stability, given that the financial sector will have more information at its disposal to assess its own credit risk.

The new rules apply to credit institutions having their center of economic interest in Belgium, as well as to registered leasing companies. Both types of financial institutions will have a duty to inform the National Bank of: (i) financial instruments (such as loans) created pursuant to a loan or leasing agreement; (ii) the security obtained under the respective agreement; and (iii) the counterparties of the respective financial institution. All future changes must also be notified to the National Bank.

The registered data will be available to credit institutions and leasing companies for risk assessment purposes when entering into new agreements and for the management of their agreements. It is prohibited to consult the register for commercial purposes.

Given the fact that personal data, which may also consist of sensitive financial data, will be registered in the central register, the Act contains the necessary safeguards from a GDPR perspective, including provisions on the exercise of data subjects’ rights, confidentiality obligations for those actors who may consult the data and an obligation to remove the data after a certain period of time.

A number of criminal and administrative sanctions have also been foreseen in the Act that can be imposed for the failure to comply with its provisions. The National Bank will also have the power to impose penalty payments if the required information is not provided timely to the central register.

The Act will enter into force on 1 January 2022. Credit institutions and leasing companies must provide the required information on current agreements before this date.

It is expected that one or more Royal Decrees will still follow to supplement a number of provisions with further detailed practical rules. For instance, rules on the specificity of the information to be notified, the frequency and deadlines of the notifications, as well as certain procedural rules must still be established.