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  • Compliance & Business Integrity
  • January 09, 2019

The Dutch Tax Authority has published a list of politically exposed functions in the Netherlands (in Dutch). This list gives further elaboration on the definition of a politically exposed person (PEP). In this publication the Tax Authority states amongst others that there are no state owned enterprises (SOE) in the Netherlands as no enterprises fall within the definition of a SOE. 

The list of the Tax Authority is (apparently) meant to meet the requirement for member-states to publish a list of the precise functions which in accordance to national provisions are qualified as politically exposed functions (which requirement is included in article 20a paragraph 4 of the Directive amending AML4 (sometimes also referred to as AML5).

The list with the comment that there are no state owned entities in the Netherlands (whether or not intentionally) addresses complaints which have been voiced by several parties since the requirements for enhanced client due diligence also apply in relation to Dutch PEPs (since the implementation of AML4 in the Money Laundering and Terrorist Financing (Prevention) Act ('Wwft ') in the summer of 2018). Because of this Wwft institutions are compelled to qualify more persons as PEP and to more often perform the enhanced client due diligence (also in case of 'relatively low' Dutch PEPs), and Dutch PEPs are confronted with (more) extensive questions from Wwft institutions (e.g. from their banks). With the list there is in any case more specific and limiting guidance available!

As a PEP qualifies (amongst others) a 'member of the management, supervisory or administrative bodies of a state owned enterprise'. (art. 2 par. 1 sub g Implementing Decree Wwft 2018). A definition or explanation of the term 'state owned entity' (or public company) is, however, not given in the Wwft, the explanatory memorandum of the Implementation act of AML4 (implementation of AML4 in the Wwft), the Implementation Decree Wwft 2018, the explanation on that Implementation Decree, AML4, and the Directive amending AML 4 (AML5), nor in the documents for the Implementation Act of the amendment of AML4 (which can be found online since mid-December!).

In the list the Tax Authority now states that there are no state owned enterprises in the Netherlands at all. It would be interesting to know on what ground the Authority concludes this, i.e. what definition of state owned enterprise the Authority used!

NB the phrasing used by the Tax Authority not only states there are no Dutch state owned enterprises in the Netherlands, but that there are no state owned enterprises at all in the Netherlands; thus also no foreign state owned enterprises. This appears to indicate that the Tax Authority used a rather strict definition of state owned enterprise. 

Do you have any questions about the PEP list or the Wwft? Do not hesitate to contact us!

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