The Dutch Anti-Money Laundering and Anti-Terrorist Financing (Prevention) Act (AML or in Dutch: Wwft) took effect on 15 July 2008. The Money Laundering and Terrorist Financing (Prevention) Act aims to prevent or as the case may be combat money laundering and terrorism financingin order to safeguard the integrity of the financial markets. The Fourth European anti-money laundering directive (Directive EU 2015/849 of the European Parliament and of the Council) was adopted and implemented into the Wwft on 25 July 2018. A lawyer plays an important part in ensuring proper compliance with this act.

Money laundering means that illegally gained assets are made legal, so their illegal origin will no longer be visible. Tax fraud is also qualified as money laundering.

Terrorism financing means that assets are used to enable terrorist activities.

Specific guideline

The Ministry of Finance and the AML (Wwft) supervisors draw up general and specific guidelines that help institutions apply the Wwft in practice. The Fourth European anti-money laundering directive has resulted in

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important changes in the specific guideline. The most important requirements of the Wwft are the performance of a customer due diligence (which entails more than just identifying the customer) and the obligation to report. A lawyer is also expected to have a documented process description with regard to risk assessments. These risk assessments have to be reported and need to be up to date.

Customer due diligence

As a lawyer, you therefore play an important part in ensuring compliance with the Wwft. Under these laws and regulations you have to make your own assessment of money laundering and terrorism financing risks, among other things. In order to be able to make this assessment, a customer due diligence is performed. An important part of the customer due diligence is establishing the identity of the ultimate beneficiary and verifying their identity. In principle, a UBO (Ultimate Beneficial Owner) must always be established. In addition, based on a risk assessment prior to entering into a business relationship or an incidental transaction, institutions have to establish whether a more thorough customer due diligence is necessary.

Risk assessment

You have to provide the supervisory authorities (the Dutch Authority for the Financial Markets AFM, the central bank DNB) with this risk assessment upon request. The risks and the measures taken by the institution itself (i.e. the lawyer) to manage the risks (risk management) have to be mapped. This means that you must have an administration or a system in place in which these risk assessments can be carried out and are traceable and reproducible in accordance with the directives issued by the supervisory authorities.

Unusual transactions

The AML (Wwft) also obliges lawyers to report unusual transactions, which may be related to money laundering or terrorism financing, to the office for the disclosure ofunusual transactions, i.e. the Financial Intelligence Unit-Netherlands. If you want to carry out a transaction yourself, you are also obliged to check whether this transaction is permitted under the Sanctions Act.

De Deken supervises the lawyers and ensures that the lawyer complies with the obligations arising from the AML (Wwft). Violation of the standards from the AML (Wwft) can lead to negative consequences.

Solution for lawyers

For proper compliance with these laws and regulations it is therefore important that you have an administration or a system in place in which these risk assessments can be carried out and are traceable and reproducible in accordance with the directives issued by the supervisory authorities. SCOPE FinTech Solutions offers you the option of integrating a CDD portal within your existing record-keeping system. This enables you to perform easy and efficient checks and screenings for: PEP lists, sanctions lists, disqualified director, adverse media, financial embezzlement, and law enforcement. This way you will always have reproducible reports of your customers available in the event of an audit carried out by the supervisor.

SCOPE FinTech Solutions also offers the service “SCOPE CDD On Demand”. Avoid reputational damage and comply with the AMLD (Anti-Money Laundering Directives). With CDD On Demand you can investigate quickly whether people appear on PEP lists or on sanction lists, whether there is negative publicity about this person and whether this person is under the supervision of a financial regulatory authority. For investigations of this kind we make use of the extensive compliance database of Company.info.

After a search you will always receive a certified report with information about the CDD investigation that was performed for your administration and the information is recorded in a database.

You can purchase credits on the CDD On Demand website which you can use to search for a person, check the results and download a report for your administration (including the components checked). If the person you are looking for is found in the CDD database, this report includes the following information: an overview of the components checked and full details such as aliases, sanctions, functions and documents.

Better be safe than sorry!