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Anti-Money Laundering Regulations in the Netherlands

Institutional Compliance Programmes

In the Netherlands, institutions with two or more policy makers are required to appoint a day-to-day AML CTF Act policy maker who is responsible for compliance with the Anti-Money Laundering and Terrorism Financing (AML CTF) Act. This person will oversee the implementation of the institution’s anti-money laundering programme.

Recordkeeping and Reporting Large Currency Transactions

The Netherlands has specific requirements for recordkeeping and reporting large currency transactions. For more information on these requirements, please refer to question 2.1 for recordkeeping and question 3.7 for reporting currency transactions.

Reporting Unusual Transactions

Financial institutions in the Netherlands are required to report unusual transactions to the Financial Intelligence Unit (FIU) under Section 16 of the AML CTF Act. A transaction may be considered unusual if it contains objective or subjective indicators that suggest suspicious activity.

Types of Unusual Transactions

• Transactions involving high-risk countries or jurisdictions
• Transactions with unusual patterns or structures
• Transactions exceeding certain thresholds (e.g., large cash transactions)

Cross-Border Transactions Reporting Requirements

The AML CTF Act also applies to cross-border transactions, which must be reported by the institution to the FIU if they are considered unusual.

Customer Identification and Due Diligence

The AML CTF Act requires financial institutions to implement customer identification and due diligence procedures. There are three levels of due diligence:

1. Simplified Procedure

• For low-risk customers (e.g., EU residents)
• Requires minimal information (e.g., name, date of birth)

2. Standard Procedure

• For medium-risk customers (e.g., non-EU residents with a stable financial history)
• Requires additional information (e.g., address, employment details)

3. Enhanced Procedure

• For high-risk customers (e.g., those from countries with high money laundering risks)
• Requires thorough background checks and verification of customer identity

Prohibition on Correspondent Relations with Shell Banks

The AML CTF Act prohibits financial institutions from entering into or continuing a correspondent relation with a shell bank, which is a bank with no physical presence in the country where it is licensed and no effective supervision.

Reporting Suspicious Activity

A transaction may be considered suspicious if it contains objective or subjective indicators that suggest money laundering or terrorist financing. The institution must report such transactions to the FIU.