Strict money laundering regulations hinder companies and charities
Reading time: 4 min
In de strijd tegen frauduleuze witwaspraktijken vallen steeds vaker onnodige slachtoffers. Goede doelen, coffeeshops en zelfs betaald voetbalclubs hebben last van de aangescherpte reglementen rondom witwassen. Sinds de monsterboete die de ING in 2018 heeft gekregen zijn banken voorzichter dan ooit en dreigen eerlijke bedrijven en goede doelen slachtoffer te worden van het nieuwe, aangescherpte interne beleid van de banken.
Several companies from high-risk branches and NGOs that do business with high-risk countries have difficulties in obtaining financing or opening a bank account due to the strict anti-money laundering policies of banks
Hinder when applying for a bank account, financing or registering with a payment platform
For NGOs active in high-risk or sanctioned countries, it is very difficult to find a bank or to join a payment platform such as Mollie. They are asked to provide the necessary documents themselves, but for many smaller NGOs this often costs too much time and also a lot of money. The Dutch Banking Association recognizes this problem and says it is in discussion with the sector (source). What often arises at banks are the activities that - mainly smaller - NGOs finance and with whom they collaborate.
Not only NGOs are complaining about the anti-money laundering policy. Complaints are being made from various sectors about the obstacles, for example when opening a bank account or applying for financing. If it is stated that companies are hindered by the anti-money laundering rules, then it is probably more likely to think of classic fraud-sensitive companies such as legal weed shops in the Netherlands and trust offices. In addition to these examples, professional football clubs and companies that conduct international trade also report problems. Banks hardly dare to take any risk when taking on new clients who trade with, for example, risk countries or are active in a risk sector and they direct them to the door in advance. The due diligence investigation then takes too much effort and is not worth the risks.
Banks also apply different criteria. The anti-money laundering policy has thus become a complicated hassle of rules for both affected companies and the bank itself. Government policy is clear; strict guidelines against money laundering. But does this policy, when implemented in this way, not unlawfully hinder honest companies and charities? It should not be the case that bona fide companies and organizations operating in a risk area or industry do not receive a bank account or financing due to the strict anti-money laundering policy.
The relationship between banks and regulators has been sharpened since ING's monster fine. As a result, banks no longer dare to take risks at all.
The anti-money laundering policy under the AMLD
The anti-money laundering scheme is part of the AMLD, the Money Laundering and Terrorist Financing Prevention Act. The AMLD has gradually been tightened, but has never before caused as much nuisance as in the current reality. Due to a reign of terror by the Public Prosecution Service that resulted in at least one historically high fine for ING and an ongoing investigation at ABN AMRO, the relationships have been sharpened. Banks dare to take even less risk than before.
As a result of the AMLD, banks, like other institutions subject to the AMLD, have been given a so-called gatekeeper function by the government for the protection of our legal order. They are the first line in the fight against money laundering. By means of extensive customer due diligence investigations, also known as the AMLD customer investigations, they must be the first party to detect fraudulent practices and suspicious actions. A thorough AMLD customer due diligence takes a lot of time, given the large number of (sanction) lists that they have to go through to check a person or company.
The CDD On Demand solution enables you to perform a cheap AMLD customer due diligence within seconds
Time and cost savings by using CDD On Demand for your customer due diligence
CDD On Demand was created on the basis of this issue. Automation in the field of financial regulations regarding the Wwft was offered sparingly and was often incomplete. The CDD On Demand solution was developed based on the idea that it could all be better, cheaper and easier. The compliance check included in the solution, checks a company or person on eleven different (sanction) lists, both mandatory lists and non-mandatory lists. At the end of the compliance check, you will receive a certified report for your records, which in turn serves as proof that you have performed the compliance check in good faith. One compliance check only takes a few seconds and costs a maximum of € 1.50. The CDD On Demand API has also been developed for larger companies, which means that costs are even lower.
The monitor function
After the extensive compliance check, it is also the intention that you keep your data up-to-date. By the monitoring function of the CDD On Demand solution your system is always up-to-date without having to make any effort yourself. You only need to take action if something has changed in the situation of one or more clients, for example if your client is elected as a member of the States General in the upcoming election and he / she has now become a politically exposed person. The CDD On Demand solution then issues a notification that one or more of your clients has been found on one of the checked (sanction) lists. The monitor function runs the lists daily for all persons on the monitor list.
In this way, checking clients to comply with the Wwft becomes less time and money consuming. In addition, the risk of a fine from competent authorities is significantly reduced by demonstrating that you have complied with the Wwft as far as possible. The CDD On Demand solution is available for SMEs with a Wwft obligation, but also for large accounts with a Wwft obligation. You can at any time contact us about the possibilities for your company or request a free demo account..