Financial Crime World

Dutch Financial Institutions at the Forefront of Crime Prevention: A Look into De Nederlandsche Bank’s Integrity Supervision

De Nederlandsche Bank (DNB), the Netherlands’ central bank and financial supervisory authority, plays a pivotal role in ensuring financial integrity and preventing the use of the financial system for money laundering and terrorist financing. In this article, we delve into the legal frameworks, policy statements, and international collaborations that underpin DNB’s integrity supervision.

Contents

  1. Legal Frameworks
    • European Directives
      • Money Laundering and Terrorist Financing Prevention (AMLD)
      • Financial Supervision Act (Wet op het Financieel Toezicht – Wft)
      • Anti-Money Laundering and Anti-Terrorist Financing Act (Wet ter voorkoming van witwassen en financieren van terrorisme – Wwft)
      • Sanctions Act (Sanctiewet 1977 – Sw)
      • Wire Transfer Regulation 2 (WTR2)
      • Act on the Supervision of Trust Offices (Wet toezicht trustkantoren – Wtt)
      • Pensions Act (Pensioenwet – Pw)
      • Regulation implementing the Anti-Money Laundering and Anti-Terrorist Financing Act (Uitvoeringsregeling Wwft)
    • Local Legislation
  2. Policy Statements
    • Supervisory Regulation
    • Policy Rule
    • Guideline on the Wwft and the Sw
  3. International Collaborations
    • European Banking Authority (EBA)
    • Financial Action Task Force (FATF)

The Netherlands adheres to various European directives and local legislation aimed at money laundering and terrorist financing prevention. These legal frameworks provide the basis for DNB’s integrity supervision.

European Directives

  • Money Laundering and Terrorist Financing Prevention (AMLD)
  • Financial Supervision Act (Wet op het Financieel Toezicht – Wft) The Financial Supervision Act promotes ethical business practices within financial institutions.
  • Anti-Money Laundering and Anti-Terrorist Financing Act (Wet ter voorkoming van witwassen en financieren van terrorisme – Wwft) The Dutch law tailored to prevent money laundering and terrorist financing, enforces European directives, and international standards set by the FATF.
  • Sanctions Act (Sanctiewet 1977 – Sw)
  • Wire Transfer Regulation 2 (WTR2)
  • Act on the Supervision of Trust Offices (Wet toezicht trustkantoren – Wtt)
  • Pensions Act (Pensioenwet – Pw)
  • Regulation implementing the Anti-Money Laundering and Anti-Terrorist Financing Act (Uitvoeringsregeling Wwft)

Local Legislation

  • Basel III

II. Policy Statements

DNB issues various policy statements to guide financial institutions in maintaining their integrity and adhering to the necessary measures to prevent money laundering and terrorist financing.

Supervisory Regulation

  • Capital Adequacy Regulation
  • Liquidity Coverage Ratio (LCR)
  • Market Abuse Regulation (MAR)

Policy Rule

  • Fit and Proper Rule
  • Remuneration Policy Rule

Guideline on the Wwft and the Sw

Provides clarification on the statutory obligations arising from the Wwft, the Sanctions Act, the WTR2, and the GDPR for DNB’s supervised institutions.

III. International Collaborations

DNB maintains close collaborations with international organizations to ensure consistent and effective countermeasures against money laundering and terrorist financing.

European Banking Authority (EBA)

The European Banking Authority has been entrusted with the mandate to protect the financial system from money laundering and terrorist financing since 2019. Its guidelines and recommendations aim to promote consistency, efficiency, and effectiveness in supervisory practices across the European Union.

Financial Action Task Force (FATF)

The Financial Action Task Force is an international organization founded by the G7 to tackle money laundering and terrorist financing. Member countries, including the Netherlands, are required to comply with its standards and undergo periodic evaluations.

The latest evaluation of the Netherlands’ adherence to FATF standards was conducted in 2021. Institutional responses to FATF’s grey list include:

  1. Strengthening client due diligence measures
  2. Enhance AML/CFT risk assessment and prioritization techniques
  3. Improve AML/CFT reporting
  4. Intensify cooperation with foreign counterparts

In conclusion, Dutch financial institutions play a significant role in crime prevention by adhering to the legal frameworks, policy statements, and international collaborations outlined by DNB. These measures contribute to creating a secure and reliable financial system for the Netherlands and the European Union.