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Dutch Anti-Money Laundering Regulations: A Comprehensive Guide
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The Netherlands has emerged as a hub for international businesses, including fintech service providers. However, this has also made it a target for money launderers and financial criminals. To combat this threat, the Dutch government has implemented a robust anti-money laundering (AML) and counter-financing of terrorism (CFT) framework.
Key Regulators
The Authority for the Financial Markets (AFM), established in 2002, is the primary financial regulator in the Netherlands. The AFM oversees the entire financial sector and its products and services, including:
- Savings
- Investment
- Insurance
- Loans
- Pensions
- Capital markets
- Asset management
- Accountancy
- Financial reporting
AML Regulations
The main article of AML regulation in the Netherlands is the Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft). The Act requires financial institutions to take a risk-based approach to AML, including:
Customer Due Diligence
- Identity verification: Establishing and verifying customer identities as part of the customer due diligence process.
- Beneficial ownership verification: Verifying the beneficial ownership of customer entities to ensure they are not using corporate infrastructure or shell companies to conceal financial crimes.
Transaction Screening
- Screening customer transactions against risk data sources, including:
- Beneficial ownership registries
- PEP lists
- Sanctions lists
- Adverse media: Screening customers against global adverse media sources to reveal changes in risk profile.
EU Anti-Money Laundering Directives
As a member of the EU, the Netherlands must implement the anti-money laundering directives (AMLD). The latest directive, the Sixth Anti-Money Laundering Directive (6AMLD), came into effect in June 2021 and introduced new AML/CFT measures, including:
Enhanced Measures
- A harmonized list of 22 predicate offenses for money laundering.
- An expansion of the criminal scope of money laundering.
- Increased liability for companies and their management and senior executives.
Recent Developments
The AFM and DNB have taken enforcement actions against firms in the Netherlands for compliance failures. The regulators also published guidance on new sanctions against Russia and Russian individuals following Russia’s invasion of Ukraine. Additionally, they have published recommendations regarding fintech regulations, including cryptocurrencies and cryptocurrency service providers.
Next Generation Risk Management
Ripjar’s Labyrinth Screening platform can help firms in the Netherlands reduce their compliance burden and streamline their screening processes by searching thousands of risk data sources in real-time, in 21 languages.