Please note: this new Wwft obligation is often overlooked
On 8 July 2020 an important new obligation came into force for many enterprises – unnoticed. As of that date, companies and other legal entities are obliged to obtain and retain certain data and documents about the identity of their ultimate beneficial owner (UBO). The data and documents are required to be sufficient, accurate, and up to date. For its part, the UBO (assuming there is one) is also obliged to provide the enterprise with the required information. These obligations are set out in Section 10b of the (Dutch) Money Laundering and Terrorist Financing (Prevention) Act [Wet ter voorkoming van witwassen en financieren van terrorisme], the 'Wwft'.
Under the (Dutch) Economic Offences Act [Wet op de economische delicten,] (the 'WED'), non-compliance is threatened only with criminal penalties i.e. specifically a fine or a custodial sentence. Penalties under administrative law – for example a penalty for non-compliance [last onder dwangsom] or an administrative fine [bestuurlijke boete] – do not apply with regard to Section 10b.
This 'UBO administration obligation' has been snowed under by the entry into force of the UBO register, with which most enterprises are familiar. Since 27 September 2020, almost all enterprises have been obliged to register their UBOs in the Trade Register. Existing enterprises are required to do that by 27 March 2022 at the latest and new enterprises immediately (i.e. since 27 September 2020). It should be noted that a dual system applies in the event of non-compliance: enforcement is possible under both criminal law and administrative law.
In order to comply with the obligation of Section 10b Wwft, virtually every company and other legal entity in the Netherlands will need to ask itself who its UBO(s) is/are, carry out a properly substantiated analysis thereof, record the outcome, and keep the information up to date. You cannot wait until 27 March 2022 to comply with this obligation. It has already been in force since 8 July 2020 and, as we already noted, is relevant to almost every enterprise in the Netherlands, and in particular to the company counsel, company secretary, or other (internal) officer responsible for a company.
Reach out if you have any questions.