Financial Crime World

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Financial Action Task Force (FATF) Assessment: Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) Measures in the Netherlands

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Understanding of AML/CFT Obligations

The FATF report assesses the understanding of AML/CFT obligations among various entities in the Netherlands. The key points are:

  • Financial Institutions (FIs): Have a strong understanding of their ML risks and obligations.
  • Virtual Asset Service Providers (VASPs): Also have a strong understanding of their ML risks and obligations.
  • Designated Non-Financial Businesses and Professions (DNFBPs):
    • Have a reasonable understanding of ML risk
    • Lower understanding of TF risk

Identifying Beneficial Owners (BOs)

The report highlights challenges in identifying BOs, particularly among DNFBPs:

  • Some obliged entities struggle to determine BOs in complex structures with international components.
  • Some DNFBPs rely on self-certification to identify BOs, which may not be verifiable.

Implementing Enhanced Due Diligence (EDD) Measures

The FATF report assesses the implementation of EDD measures among various entities:

  • Financial Institutions (FIs) and VASPs: Generally implement EDD measures comprehensively.
  • Designated Non-Financial Businesses and Professions (DNFBPs): Have a general understanding of EDD obligations, but it’s unclear how well these measures are applied in practice.

Reporting Obligations

The report evaluates the understanding and implementation of reporting obligations among various entities:

  • Obliqed entities generally understand and adequately implement their reporting obligations (e.g., submitting UTRs).
  • However, some sectors (e.g., lawyers, real estate) have lower rates of UTR filing.
  • The quality of UTRs is unclear due to limited feedback from FIU-NL.

Supervision

The FATF report assesses the supervision systems in place for various entities:

  • Financial Institutions (FIs): Subject to robust supervision systems for assessing fitness and propriety of persons performing regulated activities.
  • Designated Non-Financial Businesses and Professions (DNFBPs):
    • Not always subject to licensing and registration, which can create weaknesses in supervision.
    • Some supervisors rely heavily on informal measures (e.g., warning notices) and do not use the full range of sanctions available.

Overall

The FATF report highlights both strengths and weaknesses in the Netherlands’ AML/CFT framework:

  • There are areas for improvement, such as enhancing DNFBP supervision and ensuring consistent application of sanctions.