Small and medium-sized companies are also have judicial problems when they violate the AMLD

We are often asked how strict and how often authorities check the compliance with the Anti-Money Laundering Directive (hereinafter: AMLD) at companies subjected to the AMLD. If we look at recent case law, we see that smaller companies of various sectors suffer considerable reputational damage for relatively minor violations. Often it concerns violations of art. 3, art. 8 and art. 16 of the Wwft (Dutch law). In other words a violation of; the (stricter) customer due diligence (Article 3 in conjunction with Article 8 Wwft) and the duty to report (Article 16 Wwft).

What does the AMLD expect from 'gatekeepers'?

With the introduction of the AMLD, some professional groups and sectors have been given a 'gatekeeper' function by the government. By gatekeeper is meant that institutions subject to the AMLD are the first "line" in the fight against money laundering and terrorist financing. The idea behind placing part of the responsibility with these institutions is that the government is far removed from situations where money laundering takes place. Money laundering usually takes place in everyday life, for example with the cash purchase of an expensive watch. It is impossible for the government to supervise this itself.

If we take the example of the cash purchase of an expensive watch, then the jeweler is the gatekeeper who reports to the authorities on the basis of the notification obligation of the AMLD. This notification gives the government insight into such situations where money laundering takes place.

In addition to the duty to report, customer due diligence is also important because hidden risks may emerge that were not visible in the first instance, for example that a customer is a (tax) resident of a high-risk country. The AMLD therefore assumes a risk-oriented approach. The gatekeepers assess the risk and, if necessary, call in the authorities.

The government is therefore dependent on the gatekeepers to conduct a thorough investigation and to make a report to the authorities when necessary. Failure to do so will create problems in the detection of money laundering. That is why the gatekeepers are also periodically checked by authorities. Supervision is fragmented; the Ministry of Finance and the Minister of Security and Justice are responsible for this supervision, but various authorities have been designated as supervisors. For example, the Dutch Bank (DNB), the Netherlands Authority for the Financial Markets (AFM) and the Financial Supervision Office (BFT) are responsible for supervision. For the full list click here .
* This paragraph applies to the supervision in the Netherlands

What happens in the practice?

Many gatekeepers are aware of their obligations, but not of the consequences if they fail to fulfill their obligations. Often no check has been carried out or they only know the examples of the ING and ABN AMRO. In practice, inspections do take place (and increasingly more frequent). We get examples of larger firms where a supervisory authority is calling to report that they will be checking client files in a week, but medium and smaller firms are also being checked. Two recent lawsuits are briefly detailed below: