On 30 June 2019, the Dutch Minister of Finance and the Dutch Minister of Justice and Security published their joint action plan on the prevention of money laundering via the Dutch financial system and on localizing and prosecution of criminals and their facilitators (the Plan).
Combatting anti-money laundering has had a European wide focus for some years already, resulting in the 4th and 5th Anti-Money Laundering Directives. Money laundering has also been an area of attention of the Dutch government, and in particular also the Dutch financial regulatory authorities (the Dutch Central Bank (DNB) and the Netherlands Authority for the Financial Markets (AFM)), for a number of years. The AFM and DNB have been investigating financial institution’s compliance with anti-money laundering legislation (AML) for the last couple of years. However, some recent incidents at large financial institutions in the Netherlands have further increased the focus of the Dutch government and financial regulatory authorities on compliance with AML legislation. In addition, as also emphasised in the Plan, recent research has shown that a total amount of approximately 16 billion euros is subject to money laundering in the Netherlands.
In the Plan reference is made to various measures with the aim to combat money laundering. Some of these measures have already made it into draft legislation, while others are being considered and have not yet made their way into a legislative proposal. We have listed some important examples below, divided by category of measures.
The Plan discusses the measure of introducing an ultimate beneficial owner register (commonly referred to as the ‘UBO register’), as well as regulating currency exchange platforms and custodian wallet providers. These measures are being introduced with the 5th Anti-Money Laundering Directive as a legal basis, which means that these measures are expected to enter into force in the Netherlands (and throughout the European Union) by 10 January 2020. For these measures based on the 5th Anti-Money Laundering Directive, legislative proposals are already available in the Netherlands: most were published at the end of 2018 and in the beginning of 2019 and are currently not finalized. The most important proposals are (including hyperlinks which direct you to our blog posts for more information):
- the Act on the introduction of the UBO register [link];
- the Decree on the introduction of the UBO register [link]; and
- the Act implementing the 5th Anti-Money Laundering Directive [link]
The Plan also includes a number of measures with the aim of combatting the use of large amounts of cash, including among other things the European efforts to abolish the use of 500 euro notes. The Dutch government and the DNB will at the European Central Bank argue in favour of an end date on which these notes will be permanently removed from circulation in Europe. In addition, a ban on cash payments above 3000 euro is also being considered by the Dutch government; the aim is to effectuate this ban through new legislation that should be taking effect as of 2021. For this there is, however, no legislative proposal available yet.
Increasing the effectiveness of the gatekeeper function and supervision
The Plan includes measures in relation to the monitoring of improvements in the trust sector. As of 1 January 2019, as a result of defects in compliance with the legislation that were observed, the supervision of the trust sector has been strengthened. In the beginning of 2020, the DNB will provide its findings about its supervision on the compliance with this new legislation. In the event that there is insufficient improvement, additional measures will be investigated. DNB is also requested to provide its first impressions of this investigation at the end of this year.
Furthermore, the Plan discusses the importance of financial institutions’ legal duty to protect the financial system in their function as gatekeeper. Financial institutions have direct client contact and are able to prevent AML within the financial system. Financial institutions, and in particular their directors and supervisory board members will need to accept this role as their social responsibility. Alternatively, it is acknowledged that the prevention and combating of money laundering is a joint responsibility of the Dutch Parliament, financial regulators, investigating authorities and the financial sector, who have to support each other in their tasks and responsibilities.
Strengthening investigation and prosecution
The Plan includes measures in relation to the increased exchange of data between investigating authorities and financial regulators as well as the additional capacity for the Dutch Fiscal Information and Investigation Service (FIOD), the Financial Intelligence Unit Netherlands (FIU-NL) and the public prosecutor (OM) for additional projects and investigations.
View the Plan (Dutch only), 30 June 2019