Depending on the nature and particulars of a transaction the Dutch Money and Terrorist Financing (Prevention) Act (Wwft) applies. This Act contains provisions regarding client screening, identification and verification of clients or customers, and the reporting of unusual transactions. The client’s identity must be verified and recorded before the transaction is conducted or services provided.
The objective of the Wwft is to maintain the integrity of the financial system. Public confidence in this system is severely damaged if parts of the system are used to launder the proceeds of crime and to finance terrorism. As a result of the Wwft, not only the information position of the investigative services and the judiciary is strengthened, but also of the reporting entities. Risk-oriented approach The Wwft has a risk-oriented approach. This means that the entities themselves have to assess the risks certain customers or products entail. The Act offers the entities the possibility to adjust their efforts to these risks. This approach has been incorporated in the entity’s own compliance regulations and fits within their responsibilities and the duty of due care to which they are subject. The internal regulations are custom-made and become more stringent as the estimated risk increases. In addition, the Wwft does not prescribe as mandatory how an entity must achieve a result; it only describes the required result. Entities with an obligation to report The Wwft defines under the term ‘entity’ to whom the Act applies. The term entity includes both natural and legal persons.
The Wwft applies to the following institutions: Accountants, Lawyers, Banks, Tax advisors, Investment institutions, Investment firms, Life insurance brokers, Payment service agents, Payment service implementers acting for a payment service provider with a licence from another EU member state, Payment service providers, Natural or Legal persons that put their address at another’s disposal, Electronic money institutions, Traders / sellers of goods, Institutions for Collective Investment in Securities (ICBE), Institutions, not being banks, that carry out banking activities, Civil-law notaries, Pawn shops, Casinos, Valuers, Trust offices, Safe custody services, Money-exchange institutions
Entity with an obligation to report must report unusual transactions to FIU-the Netherlands on the basis of objective and/or subjective indicators. Failing to report unusual transactions may have consequences.
