Dutch Central Bank puts financial institutions under strict observation

14 October 2019

Research by the Dutch Banking Association (NVB) shows that an estimated 16 billion euros worth of criminal funds are laundered in the Netherlands. That means that money laundering transactions are flying under the radar of financial institutions far too frequently.

The Netherlands is relatively attractive to money launderers due to its high levels of prosperity, its strongly developed financial markets, and its stable economy. To make the Netherlands less attractive to money launderers, the Wwft* was established. This law obliges financial institutions to implement a Know Your Customer process and to report any suspicious transactions to the Dutch FIU*. At 16 billion euros, the numbers are much higher than they should be, which has led to increased pressure from the Dutch Central Bank (De Nederlandsche Bank) on financial institutions in the Netherlands.

The Dutch Central Bank won't back down

Since 2017, the Dutch Central Bank has issued eighteen penalties to financial institutions, ten of which were administrative monetary penalties. All of these sanctions were based on violation or noncompliance with the Wwft*.

Any time a financial institution is unable to prove their compliance with the Wwft*, an administrative penalty issued by the Dutch Central Bank. That administrative penalty carries an unconditional obligation to pay a monetary fine. Those fines start at a minimum of 2 million euros and can climb up to a maximum amount of double the financial gain that resulted from the infraction.

Know Your Customer

The Wwft* compels financial institutions to examine their entire client database using a Know Your Customer process. An important element of this process is identifying and verifying personal data. DataChecker offers the possibility of doing so remotely with 100% security. By applying a Secure ID Link in combination with our ID-Selfie, you can identify your clients online. The ID-Selfie compares the facial features from a real-time selfie with the photo on your client’s identification documents. This part of the KYC process is used by various financial institutions in the Netherlands as they onboard new clients and verify existing customers.

*FIU = Financial Intelligence Unit

*Wwft = Anti-Money Laundering and Anti-Terrorist Financing Act (or Wet ter voorkoming van witwassen en financieren van terrorisme)