Financial Crime Crackdown: AFM Intensifies Supervision of Service Providers in NETHERLANDS ANTILLES
In the financial markets of Bonaire, Sint Eustatius, and Saba, also known as the BES islands, service providers play a critical role in preventing financial crimes and unethical behavior. Strict regulations are in place under the Money Laundering and Terrorism Financing (BES Islands) Act to reinforce this commitment. The Dutch Autoriteit Financiële Markten (AFM) provides additional guidance through its comprehensive Wwft BES guideline.
Role of Service Providers
Service providers on the BES islands are mandated to prevent money derived from crime from infiltrating the financial system, terrorism financing, and participation of individuals and organizations under national or international sanctions. They must also safeguard their operations against involvement in fraud and corruption.
Who is under AFM’s Wwft BES Supervision?
The AFM closely monitors the following providers:
- Intermediaries offering life insurance policies
- Investment companies
- Entities providing investment services
AFM’s New Guidance Document
The AFM’s new guidance document offers further clarity on the requirements under the Wwft BES and practical examples for providers.
Know Your Client: A Crucial Oblation
When providing life insurance services, BES islands’ intermediaries must meticulously review their clients. This applies to clients with premiums exceeding $1,400 annually or $2,800 lump sums, excluding cases of suspected money laundering or terrorism financing. In such instances, an immediate client review is mandatory.
Unexplained Transactions: Triggering Suspicion
Providers of investment services and companies must report any unusual transactions to the Financial Intelligence Unit Netherlands (FIU-Nederland). Indicators of unusual transactions include, but are not limited to:
- Transactions involving large sums of money
- Transactions conducted with a high frequency
- Transactions originating from countries deemed high risk
Compliance with Sanction Regulations
To ensure compliance with the Dutch Sanctions Act 1977, service providers must periodically screen anyone actively involved in their financial services or transactions against the sanction lists stated in the Guidance. Identified matches to natural persons, legal entities, or organizations must be reported promptly to De Nederlandsche Bank. The specific sanction order or prohibition depends on the regulation in question, which could potentially result in the client’s exclusion from the financial services.
Further Assistance
For further assistance, international resources such as the AFM Guidance document Wwft BES (English), FATF guidelines Risk-Based Approach Guidance for the Life Insurance Sector, Risk-Based Approach Guidance for the Securities Sector, and FATF statement High-Risk and Other Monitored Jurisdictions are available.