Title: Dutch Caribbean Islands Bolster Financial Crimes Defenses: Money Laundering Regulations in the NETHERLANDS ANTILLES

The financial markets of Bonaire, Sint Eustatius, and Saba, collectively known as the BES islands, have strict regulations in place to combat financial-economic crimes and unethical conduct. These activities are governed by the Money Laundering and Terrorism Financing (BES Islands) Act. The Dutch Authority for the Financial Markets (AFM) has issued a guideline (only available in Dutch) to clarify the obligations imposed by the Wwft BES and provide practical examples.

Preventing Money Laundering and Terrorist Financing

Under the Wwft BES regulations, service providers must adhere to the following:

1. Prevent money derived from criminal activities from being laundered through the financial system
2. Block funding for terrorist activities
3. Deny participation in the financial system for persons and entities under national or international sanctions
4. Refuse business with individuals and entities profiting from fraud and corruption

AFM Wwft BES Supervision

The AFM regulates the following service providers on the BES islands:

1. Life insurance intermediaries
2. Investment companies
3. Entities providing investment services that involve:
   • Receiving and forwarding client orders regarding financial instruments
   • Executing orders on behalf of clients
   • Managing individual capital

AFM Guidance and Clarification

In addition to the AFM Wwft BES Guideline, essential elements of the legislation are outlined below.

New Guidance from the AFM

The AFM offers clearer implementation guidance through its new document, which includes practical examples for service providers in Bonaire, St. Eustatius, and Saba.

Know Your Client

Service providers offering life insurance must perform due diligence on clients with annual premiums over $1,400 or lump sum premiums exceeding $2,800. If there are suspicions of money laundering or terrorism financing, a review is obligatory.

Reporting of Unusual Transactions

Service providers are required to report any unusual transactions to the Financial Intelligence Unit Netherlands (FIU-Nederland). Indicators for identifying such situations are provided in appendix A for investment companies and securities providers and appendix B for life insurance intermediaries.

Obligation to Report under Sanction Legislation

Service providers must screen all clients and transactions against international sanction lists under the Guideline to comply with Netherlands Sanctions Act (1977) (Sw). A report must be filed immediately upon a match discovery with De Nederlandsche Bank, and the applicable order or prohibition must be assessed.

Additional Clarification on Wwft BES Requirements

For further clarification on Wwft BES requirements, consult the following resources:

1. AFM Wwft BES (English version) Guideline
2. FATF guidelines: Risk-Based Approach Guidance for the Life Insurance Sector
3. FATF guidelines: Risk-Based Approach Guidance for the Securities Sector
4. FATF statement: High-Risk and Other Monitored Jurisdictions

Service providers on the BES islands play a vital role in maintaining strong financial systems and ethical business environments by adhering to the Money Laundering and Terrorism Financing (BES Islands) Act and its associated regulations and guidance documents. Their commitment to identifying and preventing illegal activities ensures a secure financial infrastructure.