Financial Crime World

Netherlands Antilles: Service Providers on BES Islands Adapt to Stricter Anti-Money Laundering Regulations

Overview

In the lively financial markets of Bonaire, Sint Eustatius, and Saba, commonly known as the BES islands, service providers have a significant responsibility in combating financial-economic crime and unethical behavior. Compliance with the Money Laundering and Terrorism Financing (BES Islands) Act is mandatory for these islands’ service providers. For more information, refer to the AFM guideline [(AFM guideline)(https://www.afm.nl/en/act-and-supervision/pages/wwft-bes-guide.aspx)].

Preventing Money Laundering and Terrorism Financing

Service providers on BES islands must take measures to prevent:

  1. Criminal proceeds from being laundered through the financial system.
  2. Money from being used for terrorism financing.
  3. Individuals and entities subject to national or international sanctions from accessing the financial system.
  4. Businesses and persons benefiting from fraud and corruption.

AFM Supervision

The Autoriteit Financiële Markten (AFM) exercises Wwft BES supervision over service providers offering the following services:

  1. Intermediation in life insurance policies against a premium as per the BES Islands Financial Markets Act.
  2. Operating as an investment company.
  3. Providing investment services.

New Guidance Document

The AFM recently published a guidance document to clarify Wwft BES requirements for service providers in Bonaire, Sint Eustatius, and Saba Guidance document Wwft BES. This document includes practical examples and advice.

Service Providers’ Obligations

Know Your Client

Service providers intermediating in life insurance must do thorough client reviews if annual premiums exceed $1,400 or lump sum premiums exceed $2,800. These thresholds do not apply when there are money laundering or terrorist financing red flags. In such cases, providers must perform reviews regardless of the premium amounts.

Reporting Unusual Transactions

Another critical obligation involves reporting unusual transactions to the Financial Intelligence Unit Netherlands (FIU-Nederland). Several indicators should be used when assessing situations requiring reporting. These indicators are listed in:

  • Appendix A for ‘operating as an investment company’ and ‘providing investment services’ within the Wwft BES Regulation.
  • Appendix B for ‘intermediation in life insurance’.

Reporting Under Sanction Legislation

To prevent activities in violation of the Sanctions Act 1977, service providers must screen anyone engaged in financial services or transactions against the sanction lists provided in the Guidance. Providers must report any matches to De Nederlandsche Bank (DNB) immediately and determine the specific order or prohibition that applies. Depending on the sanction regulation, providers may no longer be able to offer financial services to the named client.

Additional Resources