Dutch government publishes plans to combat money laundering

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NL Law
Expertise
Banking and Finance Financial Regulation Criminal Law and Enforcement
The Dutch Minister of Finance and Minister for Justice and Security published a joint letter today (1 July 2019) that they sent to the Dutch Parliament containing plans to combat money laundering (click here to read the letter in full, in Dutch). These new plans follow recent scrutiny in the Netherlands and Europe relating to money laundering. Some of the plans are far reaching, and will lead to practical implications for our clients if these plans are transposed into Dutch law.

The Dutch government's plans can be divided into three pillars:

  1. Strengthening the barriers to make it more difficult to launder money. This includes the implementation of the UBO register, a ban on cash transactions above EUR 3,000 for traders in high value goods (as from 2021), the ban of the EUR 500 banknote and regulation of crypto wallet providers and crypto exchanges.
  2. Strengthening the gatekeeper function of the financial system to keep illegal funds from entering the Dutch financial market. This will include introducing the possibility for financial institutions to exchange information on their clients (e.g. with respect to KYC and transaction monitoring) with other financial institutions, mitigating risks in the trust sector and the accountancy sector, and increasing calls for a European supervisor.
  3. Strengthening investigation and prosecution with respect to money laundering. This includes more possibilities for supervisors to exchange information and more capacity and budget for the investigating authorities (e.g. the Dutch Public Prosecution Service).

According to the Dutch government, these pillars are closely connected. The joint letter contains annexes which include (i) a document setting out their specific plans, (ii) the results of a research study, conducted by the Dutch ministries in conjunction with Dutch supervisory authorities, concerning the exchange of information (e.g. between financial institutions), and (iii) a 'non-paper'  setting out the need for a single European AML/CFT supervisor, based on the SSM-model (single supervisory mechanism).

The effectiveness of Dutch AML/CFT measures will be evaluated by the Financial Action Task Force in 2021. With the plans set out above, the ministers intend to improve the effectiveness of Dutch AML/CFT measures. By the end of this year, the ministers will further discuss the progress and effectiveness of the suggested measures with the parties involved.  They will then inform the Dutch Parliament of the outcome and status of the measures.

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