As set out in our earlier blog post, the Dutch Senate (Eerste Kamer) adopted the Act implementing the Fifth Anti-Money Laundering Directive (5MLD) (Implementatiewet wijziging vierde anti-witwasrichtlijn, the Act) on 21 April 2020. On 4 May 2020, the Dutch Central Bank (De Nederlandsche Bank, DNB) published a new edition of its newsletter for crypto service providers, which among other things provides that the Act is expected to enter into force on 18 May 2020.
DNB urges crypto service providers to register themselves as soon as possible, noting that crypto services providers registering themselves prior to 18 May 2020 will be able to rely on the transition regime. If no draft application for registration is submitted to DNB before this date, the transition regime will not be available and crypto service providers will need to cease certain activities. If a crypto service provider continues to carry out certain regulated activities without being subject to the transition regime, this may have an effect on the assessment of such provider’s application and DNB may take enforcement action.
In the newsletter DNB also provides some more clarity around the following.
(1) Supervisory costs: DNB previously indicated that the total expected costs for supervising crypto service providers are EUR 1,700,000. This amount will be charged to the crypto service providers and will consist of (1) costs for one-off actions, namely the registration and assessments of (co-)policymakers and (2) a basic amount for ongoing supervision. DNB previously already provided information on the expected costs for one-off actions. In the crypto news letter DNB has now indicated that because crypto supervision is new, a basic amount will be charged to the parties that will be supervised in 2020 for ongoing supervision (crypto service providers will receive an invoice in the second half of 2020). The basic amount will be determined by the Dutch Minister of Finance (the Minister) by no later than 1 June 2020.
When determining the basic amount, an estimate is made of the number of parties that will be supervised in 2020. Because the actual number of market entrants is uncertain and to avoid charging unnecessarily high costs, the Minister considers it reasonable to take into account a large number of new market entrants. As a result, the amount to be paid for ongoing supervision in 2020 will in any case be less than EUR 20,000.
(2) Points for attention in setting up good governance: DNB notes that in its supervision it will look closely at the crypto service provider’s governance. In this regard DNB gives a number of points for attention: (1) for transparency purposes the management of the company should comprise one or more natural persons (not legal persons); (2) when setting up a company and the various roles in your organization, sufficient account must be taken of potential conflicts of interest. DNB notes that healthy governance has sufficient checks and balances in place to prevent all roles within an organization from actually being in one or a few hands (for example, in the case of a structure with a director-major shareholder, DNB expects that there will be sufficient countervailing power within the organisation between the business and compliance); and (3) DNB notes that a compliance function must be independent, which generally means in practice that, for example, a family relationship or shareholder cannot fulfill this function.
DNB has a crypto service providers section on its website which, among other things, provides detailed information on the registration process, screenings, success factors of applications. It is expected that this section of DNB’s website will continue to be updated in the coming weeks and months.
