NL AML/CFT: Dutch Central Bank (DNB) Publishes Revised Guidance for the Sector (2024)

AML/CFT

May 12

Fighting financial crime is a multifaceted challenge that requires a collaborative effort from various entities. Financial institutions are recognized as key players in the ongoing battle against financial crime due to their pivotal role as guardians of the financial system. In the past, prominent Dutch banks faced substantial penalties for systematic breaches of the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft). Therefore, upholding rigorous compliance standards is imperative to maintain the integrity of the financial sector and safeguard against illicit activities.

Risk-Based Approach

The guiding principle of Wwft is that institutions decide money laundering risks, apply measures based on it, tailor due diligence, and ensure proportionate measures for identified risks. Vary monitoring intensity based on risk levels. This risk-based approach also forms the basis of supervision by DNB.

Revised Guideline

On May 8, 2024 DNB published the revised DNB Q&As and Good Practices Wwft (2024). This publication aims to provide guidance to the sector as the practical implementation of the Wwft has proven to be a contentious issue among banks, highlighting the challenges of balancing regulatory compliance with business realities. The new guidance was consulted with the sector and will replace the old guideline ‘Leidraad Wwft en Sanctiewet 1997'.

It has emerged from the consultations that banks treated the old guideline as a framework of norms with no room for individual input or interpretation. The supervisor has decided to dispel this misconception, and the newly revised guideline, therefore, has a less prescriptive approach. Note that the revised guideline does not consider the upcoming EU AML/CFT framework. It is based on current laws and regulations at the time of publication.

Aim of the Guideline

The guideline should help the sector gain a handy overview of the obligations under the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act, secondly support the sector in setting up appropriate risk management, thirdly provide guidance on applying a risk-based approach for client due diligence and ongoing monitoring, and finally, offer guidance on innovative applications in countering financial crime.

Some examples

Some questions answered in the guideline include whether an institution must eliminate all risk of involvement in money laundering or financing terrorism and whether a small-sized institution is obligated to provide a separate compliance function with a task under the Wwft. Additionally, examples of good practices involve education and training of the staff and what constitutes a good Wwft compliance framework.

The guideline is currently only available in Dutch, which can be found on the website of DNB.

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