Financial Crime World

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Dutch Anti-Money Laundering Regulations: What Companies Need to Know

The Netherlands remains a popular destination for businesses in 2023, with its competitive business climate and innovative economy. However, financial companies operating in the country must comply with strict anti-money laundering (AML) regulations to avoid hefty fines from regulators.

Who’s Affected?

  • Banks
  • Crypto service providers
  • Investment firms
  • Clearing institutions
  • Insurers
  • Trust services
  • Electronic money institutions
  • Pension funds
  • Real estate agencies

The full list can be found on the Netherlands Financial Intelligence Unit website.

Regulators

The Authority for the Financial Markets (AFM) is the primary regulator of AML in the Netherlands, responsible for supervising the conduct of all financial market sectors. The Dutch Central Bank (De Nederlandsche Bank, or DNB) also plays a crucial role in enforcing AML regulations, monitoring the financial health of institutions and checking that their board members are fit and proper to fulfill their duties.

Key Regulations

The Netherlands has been a member of the Financial Action Task Force (FATF) since 1990, and its AML legislation is based on FATF Recommendations. The Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft) is the primary AML regulation in the country.

Compliance Measures

Financial institutions in the Netherlands must perform risk assessments of new and existing clients, implement:

  • Customer Due Diligence (CDD)
  • Know Your Business (KYB)
  • Transaction monitoring
  • Reporting
  • Sanctions screening
  • Adverse media screening
  • Record-keeping

to ensure compliance with AML regulations.

Penalties

The Dutch Criminal Code prohibits money laundering with intent, habitual money laundering, and culpable money laundering. Fines can range from 87K euros ($95K) to a maximum of 870K euros ($948K) per offense for legal entities. In severe cases, fines of up to 10% of the company’s annual turnover can be imposed.

FAQ

  • The Netherlands has a highly digitized and globalized economy, making it vulnerable to money laundering.
  • However, the FATF has not included the country in its list of countries with strategic deficiencies.
  • The AFM, DNB, and Financial Intelligence Unit regulate AML in the Netherlands.
  • The Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft) is the primary AML regulation in the country.
  • KYC stands for “Know Your Customer”, or the process of client identity verification during onboarding.

Recent Developments

In 2018, regulators slapped ING Groep NV with a 775 million euros ($900 million) fine for violating AML regulations. The heaviest fine imposed by the Dutch authorities to date.

Conclusion

The Netherlands’ AML regulations are designed to prevent money laundering and terrorist financing in the country’s financial sector. Companies operating in the Netherlands must comply with these regulations to avoid hefty fines from regulators.