Anti-Money Laundering Regulations in the Netherlands: Sustaining the Innovation in One of the Global Leading Economies
The Netherlands, a leading destination for business in 2023, boasts a competitive business climate and a strong technology and innovation sector. However, operating within this thriving economy comes with stringent anti-money laundering (AML) regulations.
The primary AML legislation in the Netherlands is the Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft). This act mandates a comprehensive AML framework focused on risk-based client verification, transaction monitoring, timely suspicious activity reporting, data retention, and ongoing risk management consistent with evolving EU AML directives.
Under the Wwft, financial institutions are required to perform Customer Due Diligence (CDD) and Know Your Customer (KYC) measures. This involves identifying and verifying the identity of clients, including Ultimate Beneficial Owners (UBOs), and assessing risk based on the client profile.
Ongoing monitoring is another essential aspect of AML compliance. Financial institutions must continuously monitor transactions and client activities to detect unusual or suspicious behavior that may indicate money laundering or terrorist financing. Enhanced monitoring is required for higher-risk clients or transactions.
Any unusual or suspicious financial activities must be reported without delay to the Dutch Financial Intelligence Unit (FIU). Delays or failures in reporting can result in regulatory actions.
Information gathered through KYC/AML processes must be stored securely for at least 5 years after the end of the client relationship, including if the onboarding process was not completed.
Institutions must also conduct tailored risk assessments and implement AML policies adapted to their specific sector and risk profile. This involves enhanced onboarding processes and continuous compliance updates in alignment with the latest regulatory standards and EU directives, including the 6th Anti-Money Laundering Directive.
For sectors such as gambling and crypto services, additional supervisory attention and regulation apply. The Kansspelautoriteit (KSA) and De Nederlandsche Bank (DNB) are the designated supervisors for these sectors, requiring sector-specific AML controls and licensing requirements.
The AFM, Dutch Central Bank, and FIU are the key regulatory bodies responsible for enforcing AML regulations in the Netherlands. Companies operating in the Netherlands should also conduct sanctions screening of customers as a part of verification procedures and search news sources to see if customers are involved in adverse media.
Last year, Rabobank, one of the top-3 biggest banks in the Netherlands, was investigated for suspected violations of the country's AML law. In 2018, ING Groep NV was fined 775 million euros ($900 million) for violating AML regulations, which stands as the heaviest fine imposed under the Dutch Criminal Code, which prohibits money laundering with intent, habitual money laundering, culpable money laundering, and simple money laundering.
All financial institutions must report cash transactions above 15K euros ($16.3K), along with all suspicious transactions, to the Netherlands' FIU. The Dutch central bank (DNB) is another key financial regulator that shares responsibilities with the AFM.
Recently, the DNB fined US crypto exchange Coinbase 3.3 mln euros for failing to obtain the correct registration in the Netherlands before offering services. These stringent regulations aim to maintain the Netherlands' reputation as a clean and transparent financial hub.
- The Netherlands, a leading destination for business in 2023, has strict Anti-Money Laundering (AML) regulations, such as the Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft), which mandate comprehensive AML frameworks for financial institutions.
- Financial institutions in the Netherlands are required to perform Customer Due Diligence (CDD) and Know Your Customer (KYC) measures under the Wwft, which include identifying and verifying the identity of clients, including Ultimate Beneficial Owners (UBOs), and assessing risk based on the client profile.
- Ongoing monitoring is essential for AML compliance in the Netherlands, with financial institutions required to continuously monitor transactions and client activities to detect suspicious behavior that may indicate money laundering or terrorist financing.
- Companies operating in sectors such as gambling and crypto services, which are subject to additional supervisory attention and regulation, must comply with sector-specific AML controls and licensing requirements under the Kansspelautoriteit (KSA) and De Nederlandsche Bank (DNB).
