Financial Crime World

Title: Dutch Crackdown on Money Laundering: AML Regulations for Businesses in the Netherlands

Introduction

The Netherlands, renowned for its robust financial sector, has strict regulations in place to combat money laundering and terrorist financing. In this article, we provide an overview of the legal and regulatory framework governing money laundering in the Netherlands.

1. Criminal Offenses and Enforcement

  • Public Prosecution Service (Openbaar Ministerie) in the Netherlands holds the legal authority to prosecute money laundering cases.

1.2 Money laundering offenses and proof

  • Money laundering offenses include concealment or disguise of an object’s true origin or possession of an object derived from a felony.
  • Tax evasion can serve as a predicate offense.

1.3 Extraterritorial jurisdiction and punishment

  • Dutch authorities have extraterritorial jurisdiction over money laundering committed by a Dutch national or foreign national with a permanent residence in the Netherlands.
  • The PPS can prosecute money laundering even if the statute of limitations for the predicate offense has expired.

2. Anti-Money Laundering Regulatory Requirements and Enforcement

  • Anti-Money Laundering and Counter-Terrorist Financing Act (Wet ter voorkoming van witwassen en financieren van terrorisme, or Wwft) sets out the regulations and responsibilities for financial institutions and designated non-financial businesses and professions.
  • These parties are required to conduct risk assessments, customer due diligence, and report unusual transactions.

3. Anti-Money Laundering Requirements for Financial Institutions and Other Designated Businesses

3.1 Scope and differences

  • Various financial institutions and non-financial businesses, e.g., banks, investment firms, life insurers, real estate agents, lawyers, and notaries, are subject to anti-money laundering regulations.
  • Specific requirements may differ based on the nature of their activities.

3.2 Payment and money transmission activities

  • AML CTF Act covers various types of transactions, e.g., cash exchanges, money transfers, and cross-border transactions, subject to certain thresholds.
  • Professional exchange services for cryptocurrency and wallet providers are required to register with the Dutch Central Bank (De Nederlandsche Bank N.V.).

3.3 Application to non-fungible tokens (NFTs)

  • AML CTF Act does not explicitly address NFTs, but it may apply to those trading in NFTs, particularly when the NFT in question is considered an art object.

3.4 Compliance programs and recordkeeping

  • Financial institutions and other designated businesses are required to maintain compliance programs and recordkeeping.

3.5 Customer identification and due diligence

  • Institutions are required to perform customer identification and due diligence using simplified, standard, or enhanced procedures, depending on the client’s risk level.

3.6 Cross-border transactions reporting

  • Financial institutions must report unusual cross-border transactions to the FIU (Financial Intelligence Unit).

Conclusion

These regulations represent the Dutch authorities’ commitment to countering money laundering activities within their jurisdiction and protecting the integrity of the financial sector and the broader economy.