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Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) Act Requirements
This article outlines the key requirements of the Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) Act for financial institutions and designated businesses.
Compliance Programmes
3.5 Are certain financial institutions or designated businesses required to maintain compliance programmes?
Yes, under Section 2d AML CTF Act, institutions with two or more policy makers must appoint a day-to-day AML CTF Act policy maker who is responsible for compliance with the AML CTF Act.
The required elements of the programme include:
- Establishing risks with regard to money laundering
- Taking necessary measures to mitigate risks
- Performing customer due diligence
- Training employees
Recordkeeping and Reporting
3.6 What are the requirements for recordkeeping or reporting large currency transactions?
See question 2.1 for the requirements with regard to recordkeeping.
Reporting of large cash transactions is not mentioned in this text.
3.7 Are there any requirements to report routinely transactions other than large cash transactions?
Yes, under Section 16 AML CTF Act, financial institutions must report unusual transactions to the FIU.
Transactions may be considered unusual if objective and/or subjective indicators are present, as listed in the Implementing Decree for the AML CTF Act (Uitvoeringsbesluit Wwft 2018).
3.8 Are there cross-border transactions reporting requirements?
Yes, cross-border transactions fall within the scope of the AML CTF Act.
Financial institutions must report unusual transactions to the FIU if it involves a transaction to or from the Netherlands.
Customer Identification and Due Diligence
3.9 Describe the customer identification and due diligence requirements for financial institutions and other businesses subject to the anti-money laundering requirements.
The AML CTF Act provides for three procedures of customer identification and due diligence: simplified, standard, and enhanced.
For low-risk clients or transactions, the simplified level is sufficient.
For high-risk clients (such as politically prominent persons) or high-risk transactions, the enhanced procedure must be followed.
3.10 Are financial institution accounts for foreign shell banks prohibited?
Yes, under Section 5 AML CTF Act, banks and other financial institutions entering into or continuing a correspondent relation with a shell bank, or with a bank or other financial institution which is known to allow a shell bank to use its accounts, is prohibited.
Suspicious Activity Reporting
3.11 What is the criteria for reporting suspicious activity?
See question 3.7.
The threshold for reporting a transaction is lower than “suspicious”, given that the criterion for reporting is whether the transaction is unusual (Section 16 AML CTF Act).
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