1 May 2024

Anti-money laundering: stricter rules to apply at national and international level

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New European rules on anti-money laundering

The AML package was adopted by the European Parliament in April 2024 and now awaits Council approval. The new European rules consist of a new European supervisor (AML Authority, AMLA), a revised directive (AMLD6), and a new regulation (Single Rule Book). See our previous article on harmonisation of the rules.

AMLA – the new European supervisor

AMLA, the new European supervisor, will be located in Frankfurt. Based on objective criteria (to be set by AMLA), each EU member state must designate at least one financial institution as categorised in the highest AML/CFT risk category. AMLA will supervise those entities directly, and other financial AML-regulated institutions indirectly, such as banks and investment institutions. AMLA will also supervise non-financial AML-regulated institutions, such as auditors and law firms, via national supervisors.

Limitations on cash payments

There will be a EUR 10,000 limit for cash payments at the EU level. For cash transactions between EUR 3,000 and EUR 10,000, AML-regulated institutions must identify and verify the identity of the parties involved.

In the Netherlands, a pending anti-money laundering bill (Wet plan van aanpak witwassen) will be divided into different parts. The provisions on cash payments will be submitted to the Dutch parliament. These prohibit cash transactions exceeding EUR 3,000 if conducted in or from the Netherlands by: (a) traders in goods, (b) buyers or sellers of works of art in the course of their business or profession, and (c) pawnbrokers. The EUR 3,000 threshold applies to transactions between professionals and those between professionals and consumers. There is no cash limit for transactions among consumers. This part of the bill is expected to enter into force later this year.

The bill's provisions on outsourcing transaction monitoring by banks and the obligation to exchange information on high-risk clients remain controversial and will be discussed at a later stage to align with new European legislation.

Updated ministerial guidelines

The Dutch Ministry of Finance and Ministry of Justice and Security have updated their guidelines on the Dutch AML Act. The updated guidelines incorporate a broader scope of application and now include: gaming providers; companies offering professional services that exchange virtual currency for fiduciary currency; and companies that offer wallets in the course of a business.

The legal framework to prevent money laundering and terrorist financing consists not only of European directives and implementing laws, but also of international standards set by the Financial Action Task Force (FATF). The recommendations and the (non-legally binding) guidance of the FATF have also been included in the new Dutch ministerial guidelines.

The guidelines also refer to the risk of discrimination relating to client due diligence. There are various tools that AML-regulated institutions can use to prevent clients from being selected on discriminatory grounds, such as the Guidance on Non-Discrimination by Design.

UBO register extracts available

When entering into a new business relationship with a client, AML-regulated institutions (such as banks, investment institutions, law firms, auditors and tax advisers) must have that client's extract from the UBO register on file. Until 1 June 2024, AML-regulated institutions can follow a special procedure when starting a new business relationship with legal entities. Legal entities must provide the AML-regulated institution with all publicly available UBO information as supplied to the UBO register at the time of registration.

As of 1 June 2024, legal entities may apply for an original extract from the UBO register at the Dutch Trade Register. This extract can be provided by the legal entity to AML-regulated institutions so that the AML-regulated institutions can fulfil their obligations under the Dutch AML Act. AML-regulated institutions must apply for an original extract from the Dutch UBO register as soon as access has been provided. Banks and notaries will have access to the UBO register around June 2024. Other AML-regulated institutions will have access in late-2024.

The Minister of Finance has stated that Dutch law amending accessibility to the Dutch UBO register will be sent to the Dutch parliament in mid-2024. In late 2024, a ministerial decree will follow stating which individuals and organisations have a legitimate interest in accessing the UBO register.

What next

The text of the new European AML package will be published after the European Council adopts the laws. Implementation by EU member states is expected in 2027.