Money Laundering in the Netherlands: A Guide to Compliance
The Netherlands has long been a hub for business and finance, but with great opportunity comes great responsibility. Financial institutions operating in the country must adhere to strict anti-money laundering (AML) regulations to avoid hefty fines and reputational damage.
Who is Affected?
The following institutions must comply with AML regulations in the Netherlands:
- Banks
- Crypto service providers
- Investment firms
- Clearing institutions
- Insurers
- Trust services
- Electronic money institutions
- Pension funds
- Real estate agencies
These entities are required to implement robust customer due diligence and ongoing monitoring procedures to prevent money laundering and terrorist financing.
Who Regulates AML in the Netherlands?
The Authority for the Financial Markets (AFM), Dutch Central Bank, and Financial Intelligence Unit regulate AML regulations in the Netherlands. The AFM conducts inspections of financial institutions and enforces regulations as necessary. The DNB monitors the financial health of institutions and checks that they apply strict customer due diligence procedures to prevent money laundering.
What are the Main Regulations?
The Netherlands has been a member of the Financial Action Task Force (FATF) since 1990, and its AML legislation is based on FATF Recommendations. The country’s primary AML legislation is the Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft).
To stay compliant, financial institutions must:
- Perform risk assessments of new customers
- Conduct ongoing monitoring of customer transactions
- Screen for sanctions and PEPs
- Search adverse media sources
- Maintain accurate client records
Penalties for Non-Compliance
Penalties for non-compliance can be severe. The Dutch Criminal Code prohibits money laundering with intent, habitual money laundering, and culpable money laundering (without intent). Penalties include fines and imprisonment.
FAQs
Is the Netherlands a high-risk country for money laundering?
While the country has a highly digitized economy that makes it vulnerable to money laundering, it is not currently included on the FATF’s list of countries with strategic deficiencies.
Who regulates AML in the Netherlands?
The Authority for the Financial Markets (AFM), Dutch Central Bank, and Financial Intelligence Unit regulate AML regulations in the Netherlands.
What is the Netherlands’ Anti-Money Laundering Act?
The Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft) is the primary AML regulation in the Netherlands.
What is KYC in the Netherlands?
KYC stands for “Know Your Customer”, or the process of client identity verification during onboarding.