Strict money laundering regulations hinder companies and charities

In the fight against fraudulent money laundering, more and more third parties fall victim to new measures. Charities, coffee shops and even professional football clubs are affected by the stricter regulations regarding money laundering. Since the colossal fine that ING received in 2018, banks have been more cautious than ever and honest companies and charities are at risk of falling victim to the new, strict internal policies of the banks.

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.

NGOs are not alone with complaints about the anti-money laundering policy. Complaints are being made from various sectors about the obstacles introduced by banks, such as those imposed when opening a bank account or applying for financing.When it is stated that companies are hindered by the anti-money laundering rules, it is natural 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 rarely want to take any risk when taking on new clients who trade with, for example, countries with associated financial risk or clients who are active in a risk sector, rejecting their advances in advance. The due diligence investigation will take too much effort and is not worth the risk.

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 Wwft

The anti-money laundering scheme is part of the Wwft, the Money Laundering and Terrorist Financing Prevention Act. The Wwft has gradually been tightened, but has never before caused as much nuisance as in these times. 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 Wwft, banks, like other institutions subject to the Wwft, 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 Wwft customer investigations, they must be the first party to detect fraudulent practices and suspicious actions. A thorough Wwft customer investigation takes a lot of time, given the large number of (sanction) lists that companies must go through to investigate a person or company.

The CDD On Demand solution enables you to perform a cheap Wwftcustomer due diligence within seconds

Time and cost savings by using CDD On Demand for your customer due diligence

CDD On Demand was created in response to 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. Through 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 notifies you 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.

This way, checking clients to comply with the Wwft becomes less time and money consuming. In addition, the risk of a fine from watchdog authorities is significantly reduced as you can demonstrate 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 companies with a Wwft obligation. You can at any time Contact us about the possibilities for your company or request a free demo account..