The Dutch Central Bank (De Nederlandsche Bank, DNB) recently submitted its legislative letter (wetgevingsbrief) for 2020 to the Dutch Minister of Finance (the Minister). This letter is submitted to the Minister annually and sets out the relevant European and national developments relevant to the financial sector and the legislative changes desired by DNB to address bottlenecks in Dutch laws and regulations.

DNB’s legislative letter describes the following general developments in the legislative field:

• the low interest rates have a significant impact on Dutch (life and non-life) insurers. DNB points out that, from the point of view of policyholder protection, it remains important that life insurers maintain their buffers. In a European context – in the context of the Solvency II 2020 review – DNB is committed to a more realistic calculation of long-term liabilities, as part of a balanced package of measures to further strengthen the Solvency II framework;
• DNB would like to consult with the Minister how to deal with the current charging system for passing on the supervisory costs, particularly in the area of licences. DNB would like to draw attention to the fact that the fees for licence applications are not currently cost-effective. For some supervisory actions no fees can be charged at all at the moment. DNB has received complaints from several sectors that those already under supervision have de facto subsidised new market entrants; and
• With the entry into force of the Act on the Supervision of Trust Offices (Wet toezicht trustkantoren 2018, Wtt 2018) on 1 January 2019 and the implementation of the Fourth Anti-Money Laundering Directive in Dutch legislation on 24 July 2018, DNB notes that important steps have been taken in tightening up integrity legislation. Further measures will be taken with the entry into force of the Act implementing the Fifth Anti-Money Laundering Directive (Implementatiewet wijziging vierde anti-witwasrichtlijn) and the recently consulted legislative proposal on the Action Plan on Money Laundering. DNB’s legislative wishes (as detailed below) refer to the further tightening of some elements within the Wtt 2018, the Act on the prevention of money laundering and terrorist financing (Wet ter voorkoming van witwassen en financieren van terrorisme, Wwft) and the Sanctions Act 1977 (Sanctiewet 1977).

Besides these developments, DNB brings a number of legislative wishes to the Minister’s attention, including, but not limited to the following.

1. Third-country life and non-life insurers are currently able to gain access to the Dutch market via a notification procedure, which case DNB will not exercise prudential supervision of these insurers. At the same time, the regulatory prudential framework in the EU and the Netherlands has tightened in recent years and expectations regarding policyholder protection have increased. In DNB’s opinion the rights of Dutch policyholders are no longer sufficiently protected with regard to these insurers. DNB requests the Minister to terminate this way of market access for third-country insurers.
2. Under the AFS banks are required to obtain a declaration of no-objection (verklaring van geen bezwaar, DNO) from DNB for a financial or corporate reorganisation. No such obligation exists for insurers, but DNB wishes to see this introduced so that DNB has an extra scope to counterbalance reorganisations of insurers that may entail risks for policyholders, such as entering into reinsurance constructions or an IPO.
3. The Sanctions Act 1977 currently does not contain a publication regime. This means that enforcement measures taken by DNB on the basis of this act are not published. The Wwft and Wtt 2018 do contain a publication regime and DNB wishes to see the same apply for the Sanctions Act 1977.
4. DNB is of the opinion that the threshold of EUR 15,000 for conducting client investigations by crypto service providers for incidental crypto transactions is undesirable, given (i) the high risk that is involved and (ii) the fact that crypto transactions will often concern lower amounts. DNB would like to see an obligation added to the Wwft that, in the event of incidental crypto transactions below the threshold of EUR 15,000, at least the client needs to be identified and the identity needs to be verified.
5. Pursuant to the Wtt 2018, a trust office with its registered office in the Netherlands is prohibited from providing trust services to a client who implements tax advice provided to this client by the same trust office. The prohibition aims to ensure the independent conduct of the customer due diligence prior to entering into the business relationship or the provision of the trust service. Seeing that the prohibition is currently limited to the combination of the provision of trust services and the provision of tax advice to one and the same client, it is not always possible for DNB to determine whether this independent implementation is actually guaranteed. This is also because there is no obligation to include an independent tax advice in a service file. DNB proposes to simplify the ban by including a general ban on the provision of tax advice by trust offices.

The Minister has responded to DNB’s legislative letter and in summary responded as follows to the five legislative wishes set out above.

1. The Minister agrees with DNB’s view that the rights of Dutch policyholders are no longer sufficiently protected with regard to third-country insurers accessing the Dutch Market via a notification procedure. The Minister will be publishing a legislative proposal terminating this way of access for public consultation.
2. The Minister confirms that a legislative proposal addressing a DNO obligation for a financial or corporate reorganization by insurers is currently being worked on.
3. The Minister will be investigating whether introducing a publication regime in the Sanctions Act 1977 is desired and possible.
4. The Minister points out that the points raised by DNB on incidental crypto transactions has been duly considered in the legislative process of the Act implementing the Fifth Anti-Money Laundering Directive and that this act will first need to enter into force before further action will be considered.
5. The Minister is initially positive about DNB’s wish to introduce general ban on the provision of tax advice by trust offices and will discuss this further with DNB. The Minister will examine what effects a general ban has on the sector and to what extent the ban contributes to the management of integrity risks.