On 25 July 2018, the Implementation act of the fourth anti-money laundering directive entered into force (unexpectedly quickly after all!), with the amended Money Laundering and Terrorist Financing (Prevention) Act (the “Wwft”) thus also applying from that date. The Implementation decree Wwft 2018 and the amended Implementing regulation Wwft also came into force.
This legislation has entered into force very quickly after the relevant bill was adopted by the Dutch Senate on 10 July 2018. This deviates from the policy of fixed dates for changes in legislation and regulations. According to the Decree Establishing the Date of Entry into Force, this deviation is justified because the implementation of EU legislation is concerned and the date for implementing the Fourth Anti-Money Laundering Directive had already been exceeded (considerably).
The Implementation act of the fourth anti-money laundering directive implements, inter alia, the Fourth Anti-Money Laundering Directive ('4AMLD') and amends various pieces of legislation, in particular the Wwft. Important changes made to the Wwft include the following:
- The two core obligations pursuant to the Wwft – to conduct proper customer due diligence and report unusual transactions – continue to apply. Where customer due diligence is concerned, a risk-based approach will be assumed even more than hitherto. For example, a regulated European institution is no longer a “low-risk institution unless”, but those features are only indicators of a low level of risk.
- In addition, the scope of the Wwft has been extended to a number of new categories of institutions, including providers of gambling services and persons trading in goods professionally or commercially (“high value dealers”) if they make or receive cash payments of EUR 10,000 or more (previously the limit was EUR 15,000 and this category only included sellers).
- In addition, the maximum administrative fines that can be imposed for violations of the Wwft have been changed and a turnover-related administrative fine of 20% is now possible in the case of serious violations by banks, other financial enterprises, and trust funds.
- Finally, the publication powers of the supervisory authorities have been broadened.
The aforementioned Implementation decree Wwft 2018 provides in particular for further elaboration of the terms “politically exposed person” (“PEP”) and “ultimate beneficial owner”(“UBO”). It is important in this context to note that a domestic politically exposed person is now also referred to as a “PEP”, and in the event that – briefly put – no regular UBO has been or can be identified, a pseudo-UBO must be chosen.
In the meantime the “Fifth” Anti-Money Laundering Directive ('5AMLD') has been adopted and published. It is in fact an amended version of the Fourth Anti-Money Laundering Directive. This Fifth Anti-Money Laundering Directive entered into force on 9 July 2018 and EU Member States must comply with the directive by 10 January 2020. The directive is intended, inter alia, to combat the risks associated with the anonymity of virtual currencies. In that context, providers engaged in exchange services of virtual currencies and fiat currencies as well as custodian wallet providers have been brought within the scope of the anti-money laundering legislation.
Another important change is that the UBO register – which Member States were already required to set up and maintain pursuant to the Fourth Anti-Money Laundering Directive – will become a public register. The legislative process that had already been started by the Netherlands for the establishment of the UBO register has therefore been put on hold. The amended bill for the Registration of Ultimate Beneficial Owners (Implementing) Act is now expected to be submitted to the Dutch House of Representatives early in 2019. It provides for the registration of UBOs of companies and other entities established in the Netherlands. A separate legislative process will also be launched for the introduction of a register containing information on the UBOs of trusts and similar legal constructions.
Do not hesitate to contact us if you have any questions about the Wwft.