Financial Crime World

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Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) Act

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Recordkeeping and Reporting Requirements

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 also appoint a day-to-day AML CTF Act policy maker who is responsible for compliance with the AML CTF Act.

3.6 What are the requirements for recordkeeping or reporting large currency transactions?

  • The requirements for recordkeeping can be found in question 2.1.
  • Reporting requirements for large currency transactions will be covered in question 3.7.

3.7 Are there any requirements to report routinely transactions other than large cash transactions?

Yes, the AML CTF Act requires financial institutions to report unusual transactions to the FIU (Section 16 AML CTF Act). Transactions may be considered unusual if objective and/or subjective indicators are present.

Indicators of Unusual Transactions

The following indicators can be found in the Implementing Decree for the AML CTF Act (Uitvoeringsbesluit Wwft 2018):

  • Transaction patterns
  • Suspicious behavior
  • Inconsistencies in customer information

Cross-Border Transactions Reporting Requirements

3.8 Are there cross-border transactions reporting requirements?

Yes, the scope of the AML CTF Act is not limited to national transactions. Cross-border transactions – transactions to and from the Netherlands – fall within the scope of the AML CTF Act and must be reported by the institution to the FIU if it is an unusual transaction.

Customer Identification and Due Diligence Requirements

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
  • Enhanced

Special or Enhanced Due Diligence Requirements

Certain types of customers may require special or enhanced due diligence, including:

  • Politically exposed persons (PEPs)
  • High-risk countries
  • Customers with complex structures

Prohibition on Financial Institution Accounts for Foreign Shell Banks

3.10 Are financial institution accounts for foreign shell banks prohibited?

Yes, Section 5 AML CTF Act prohibits 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.

Reporting Suspicious Activity

3.11 What is the criteria for reporting suspicious activity?

The threshold for the obligation to report a transaction is lower than “suspicious”, given that the criterion for reporting is whether the transaction is unusual (Section 16 AML CTF Act).

Public-Private Information Exchange

3.12 What mechanisms exist or are under discussion to facilitate information sharing between and among financial institutions and businesses subject to anti-money laundering controls, and/or between government authorities and financial institutions and businesses subject to anti-money laundering controls?

In 2021, the EU has introduced new rules on information sharing, including requirements for financial institutions to report suspicious transactions to the FIU. Additionally, there are discussions about establishing a public-private partnership to facilitate information sharing between government authorities and financial institutions.