The Industry Association for Private Research Agencies (in Dutch: De Branchevereniging voor Particuliere Onderzoeksbureaus or BPOB) and SCOPE FinTech Solutions are entering into a partnership. BPOB, which supervises the quality of the service provided by the affiliated detective agencies, has opted for the CDD On Demand solution to support its members with customer due diligence. Due to the collaboration, affiliated detective agencies can use BPOB at a discount to screen their clients.

CDD On Demand

The CDD On Demand solution supports the members of BPOB with the investigations by, for example, screening for negative media or prevention on sanction lists. CDD On Demand can be used as a resource for members of the BPOB.

BPOB

The BPOB monitors the quality of the services provided by the affiliated detective agencies. Among other things, this involves checking whether the members comply with applicable laws and regulations and the Privacy Code of Conduct. The purpose of this is to protect the privacy interests of those involved and to guarantee the professionalism of the affiliated investigative agencies. The core tasks of the BPOB are:

• Representing the ideal, material and social interests of private researchers;
• Promoting expertise, operational working techniques and everything related thereto;
• To encourage the sharing of knowledge and skills among colleagues in the country working in the field of private research to promote professional collaboration in an atmosphere of friendly collegiality.

The BPOB also represents the interests of Dutch private researchers towards the government and other institutions. The BPOB also functions as a national organization within a European context; the European society of detectives and worldwide within the World association of detectives.

SCOPE FinTech Solutions

SCOPE marketing technology b.v. was founded in 1987. A true pioneer in the Dutch ICT industry. “For more than thirty years, we have been helping the Dutch market with a professional CRM system, with a large, loyal customer base with a focus on the financial sector,” said Fred van 't Hoff, CEO of SCOPE FinTech Solutions.

Companies that must comply with the AMLD (Anti Money Laundering Directive) are also obliged to find out the ultimate beneficial owner of a company. The ultimate beneficial owner is often referred to as the Ultimate Beneficial Owner or UBO. Finding a UBO can be a complicated process, but fortunately there are several tools available in the CDD On Demand solution; the Chamber of Commerce UBO register and the UBO investigation.

The UBO register of the Chamber of Commerce

Since September 27, 2020, many companies are obliged to register the UBO(s) in the UBO register of the Dutch Chamber of Commerce. Companies established in 2020 or later must register immediately and for older companies there is a transitional arrangement of 18 months. Via the CDD On Demand solution you can search directly in the UBO register of the Chamber of Commerce without leaving the CDD On Demand application. You can easily search for a Chamber of Commerce number or company name. Searching the UBO register costs three credits.

Because not all companies have yet registered in the UBO register due to the transitional arrangement, it may be that the search option via the UBO register of the Chamber of Commerce sometimes does not offer a solution. To this end, SCOPE CDD On Demand also has a UBO study based on extracts from Chamber of Commerce extracts.

The UBO investigation based on extracts from the Chamber of Commerce

If you cannot find the UBO via the UBO register of the Chamber of Commerce, CDD On Demand also has the UBO research as a solution. Here too you search by Chamber of Commerce number or trade name. The independent UBO investigation then requests the Chamber of Commerce registration of the company concerned and also the legal entities that may be linked to this organization. This makes the entire company structure transparent. For example, a Holding may act as a director of a BV.

The UBO research based on Chamber of Commerce extracts will then automatically link these companies together and select the correct UBO or suspected UBO. If the investigation does not reveal a UBO, CDD On Demand indicates who would probably know who the UBO is.

Who is an Ultimate Beneficial Owner

According to the Dutch tax authorities, an UBO is anyone who:

• has an interest of more than 25% in the capital of the legal entity;
• Can exercise more than 25% of the voting rights in the general meeting;
• Beneficiary is more than 25% of the assets of the legal entity.

It is therefore possible that a company has several UBOs. An UBO or UBOs can also be hidden behind a holding company. An investigation can therefore be complicated and take a lot of effort. All UBOs should be registered on March 27, 2022 of the companies that have a registration obligation (a number of company forms are excluded, for example an association of owners). Until then, the UBO register may not be complete. The UBO research based on Chamber of Commerce extracts do not depend on the UBO register to identify a UBO or possible UBO and can always be used.

Why should an UBO investigation be carried out?

An institution subject to AMLD is obliged to find out the identity of the UBO. The identity must be established in order to prevent (unconsciously) doing business with persons who have the wrong intention, for example money laundering, or hides behind a shadow company. Once the identity has been established, a compliance check must be performed. The compliance check indicates, among other things, whether someone is a PEP, is on sanction lists or is a (tax) resident of a high-risk country.

After the UBO check of CDD On Demand, an automatic compliance check can be performed of the UBO (s) found. Based on the compliance check, a PDF report is generated for the administration. After the compliance check, a person can be placed on the monitor list. On the monitor list, a person is checked daily and a warning is given if anything has changed.

Try CDD On Demand for free

Performing a UBO check via CDD On Demand is easy and saves a lot of valuable time. After performing a UBO check, you can immediately continue with other AMLD obligations, such as performing a compliance check and monitoring relationships.

Last February, the "Aanjaagteam Ondermijning" led by A.B. Hoogenboom presented the research report "Samen". The report has three subjects; the support, nature and extent of involvement in money laundering and the cooperation between the government, the notarial profession, brokerage and appraisers.

There has been an increase in support and the number of reports of suspicious transactions, only there is talk of a “rebellious involvement”. There are several developments that promote compliance, but there is also a certain rebellion. In principle, according to the research report, there are three reasons for complying with the AMLD: economic, social and normative reasons. Whereas the economic motive mainly revolves around a cost and benefit assessment, the social and normative motives are dominated by the sociological aspect. What is the corporate culture (normative)? And how much appreciation and prestige do people receive from customers, competitors and the environment (social)?

Rebellious involvement 

It appears that the sectors studied have their reservations about the AMLD. With the gatekeeper function, they fall between two stools. The rebellion is evident from various studies conducted by industry associations such as the Royal Notarial Association (KNB) and the Dutch Association of Estate Agents (NVM). Mainly the costs, the (increasing) administrative burden, such as the increasingly burdensome investigative duties, cause "rebellion". There is also disinterest, they experience a lack of feedback and there is doubt about the effect of the AMLD. Some real estate agents, notaries or appraisers also believe that the gatekeeper position has made them too much of an extension of the regulatory and enforcement agencies. 

It is also striking that in the investigations among the NVM real estate sector, the fear of reprisals was reported. If brokers (or others) comply with the reporting obligation, the name of the reporter is mentioned in the criminal file. By including the name of the reporter, they are afraid to report for fear of retaliation from the criminal circuit, which is why brokers / appraisers have been advocating for some time to anonymize the names of the reporters. 

Due to the "rebellious involvement", the AMLD is not always complied with, the report concludes. In 2017, 23 criminal investigations were conducted against estate agents and notaries. In addition, there were 361 court rulings on money laundering between April 2015 and August 2020, of which 33 related to notaries, 13 to estate agents and 2 to appraisers. 

Despite the criticism and periodic violations, support for the AMLD is increasing. The reports of unusual transactions are also increasing, with the reports about real estate playing the largest role; no fewer than 2000 of the 4,500 reports related to real estate. It is therefore problematic - from the perspective of the purpose of the AMLD - that there are many parties active in real estate that are not linked to a trade association. 

CDD On Demand was created to make it easier for parties subject to AMLD and gatekeepers to comply with risk assessment and customer due diligence. You can easily search for your client (legal entity or natural person) in the database and your client is automatically checked on various points such as PEP lists, Interpol lists and risk countries. At the end of the study, you can download a free PDF report for your records containing the findings of the study. CDD On Demand can also support you in finding the UBO and checking several people at the same time.

SCOPE FinTech Solutions, an expert in data quality, CRM software and at home in the world of financial and legal services since 1987, has partnered with RE / MAX Netherlands. This means that RE / MAX brokers are offered CDD On Demand, a particularly valuable tool for brokers to be able to meet obligations that fall under the AMLD in a simple and controllable manner.

RE/MAX offers CDD On Demand

Sinds het ontstaan in het jaar 1973, is RE/MAX gegroeid tot ’s werelds grootste franchiseorganisatie in de makelaardij. Momenteel werken er meer dan 130.000 makelaars in bijna 100 landen over de gehele wereld. RE/MAX verovert de wereld. Optimale dienstverlening door samenwerking en innovatie.

RE / MAX focuses on clients, brokers and office owners. RE / MAX provides real estate agents and office owners with the best tools, valuable support and training opportunities. One of these tools is now also the SCOPE FinTech CDD On Demand solution.

The system can be used immediately

CDD On Demand is available from an amount of € 1.50 per check and the system can be used immediately. No long-term contract is necessary and all clients can be processed automatically. CDD On Demand is basically the automated customer due diligence process of Customer Due Diligence.

"" In the context of the Wwft and the client due diligence, I wanted a CDD solution. After we have tested a number of providers, we now use the CDD On Demand tool from SCOPE FinTech Solutions. The tool works quickly, simply and efficiently. The report that the system generates is professional, clear, well-organized and meets the requirements set for us as brokers. In addition, you are not tied to contracts and it is an accessible way to generate the correct information. "- Dennis de Haan: CDD On Demand

Advantage for RE / MAX brokers

Because of the collaboration, affiliated brokers receive a ten percent discount through the affiliated RE / MAX offices. This also offers advantages for the clients of the brokers; because more than ever the real estate agent has time to buy or sell your home now that he knows that CDD On Demand is there.

The Gaming Authority has tightened up the AMLD guidelines in connection with the entry into force of the Remote Games of Chance Act (in Dutch: Koa) on 1 April 2021. The Anti-Money Laundering Directive (hereinafter: AMLD) has been amended due to the entry into force of the new Act. Koa are also going to apply to providers of online gambling games.

Until recently, the provisions contained in the AMLD only applied to physical locations of games of chance of the Holland Casino. Due to the legalization of online games of chance, the Gaming Authority has amended the AMLD guidelines to provide online providers with handles in complying with the AMLD. The first version has been submitted for consultation at various parties.

As of April 1, permits can be applied for for online games of chance. If the license is granted, one falls under the supervision of the Gaming Authority. Since 2016, the Gaming Authority has been charged with enforcing the AMLD for their target group. The purpose of the AMLD is to prevent the use of the financial system for money laundering and terrorist financing. The prevention of money laundering is of great social importance for an effective fight against serious forms of crime. The government employs various professions and branches as "gatekeepers" by means of the AMLD. For example, these professions and industries report high-profile transactions to the authorities who may then decide to investigate the individual or company in question.

With online gambling providers, it is particularly important to keep an eye on unusual transactions and the turnover rate of the transactions. The AMLD is applied more strictly in online sports gambling games because there is also a chance of match fixing. A special unit has been set up within the Gaming Authority that monitors match fixing: Sports Betting Intelligence Unit, or SBIU. The SBIU can report possible match fixing in games of chance. Holders of a license for remote games of chance must report this to the SBIU. Land-based sports betting does not have to comply with the obligations of the AMLD, but does have an obligation to report to the SBIU.

A games of chance provider conducts a customer due diligence in the following cases:

• When entering into a business relationship; The Gaming Authority assumes that a games of chance provider always enters into a business relationship with its players. A customer due diligence must therefore always be carried out, but only a registration of a player is not a business relationship. Before making a payment and participating in a game of chance, the provider must complete a customer due diligence. 1
• If there are indications that the player is involved in money laundering;
• If it doubts the correctness, completeness or topicality of previously obtained data from the player;
• If the risk of involvement of an existing player in money laundering gives cause to do so;
• If, given a player's state of residence, there is an increased risk of money laundering.

The customer due diligence consists of four steps. First, the identity is established and confirmed on the basis of an identity document. Subsequently, the games of chance provider must make a risk assessment of the player. The games of chance authority provides a number of risk factor-increasing. You perform a simplified, standard or enhanced customer due diligence on the basis of your risk assessment. The third step in customer due diligence is to continuously monitor the business relationship and the transactions that take place during that relationship. As a fourth step, if necessary, is an investigation into the source of the funds. You do this at an increased risk.

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:

The Wet ter voorkoming van witwassen en financieren van terrorisme (hierna: Wwft) is in het leven geroepen om te voorkomen dat het Europese financiële stelsel gebruikt wordt voor het witwassen van geld en de financiering van terrorisme. De richtlijnen van de Wwft verplichten verschillende branches binnen de financiële dienstverlening om hun klanten te identificeren, de afkomst van hun geld te achterhalen en om ongebruikelijke transacties te melden. Bovendien moeten zij een vereenvoudigd, standaard of verscherpt cliëntenonderzoek uitvoeren.

In this blog you can read more about six questions about compliance with the guidelines under the AMLD for brokers.

What are the most important changes to the AMLD since its introduction?

The AMLD came into effect on 1 August 2008 and is also referred to as the third anti-money laundering directive, because the AMLD is a combination of the Identification of Services Act (Wid) and the Disclosure of Unusual Transactions Act (Wet MOT).

The Dutch governement implemented the 4th Anti-Money Laundering Directive on 25 July 2018. The fourth anti-money laundering directive obliges all EU member states to keep a UBO register, which means that companies are obliged to register their ultimate owners and / or the persons who have control in the UBO register. The Dutch UBO register is included in the Trade Register of the Chamber of Commerce.

The most recent anti-money laundering directive was introduced in the AMLD on 21 May 2020. A few pertinent changes to the latest anti-money laundering directive include:

• Virtual currencies are also covered by the AMLD: Two new institutions became subject to the Wwft with the introduction of the fifth anti-money laundering directive. Crypto exchange platforms and crypto custody wallets must now comply with the AMLD. Owners of crypto currency ATM machines also fall under the AMLD.
• The objective indicator of third high-risk countries will lapse: the fourth anti-money laundering directive included an objective indicator for high-risk third countries and all transactions had to be reported to FIU-the Netherlands. This objective indicator has disappeared because it would create too much work. A subjective factor has replaced this. So it now depends on the nature of the transaction. 
• Risk assessment becomes the guideline: Institutions subject to the AMLD must make a risk assessment before conducting a customer due diligence. Before entering into a business relationship, companies must make a risk assessment of a client and, on that basis, opt for a simplified, standard or enhanced client due diligence.

Last week, ABN AMRO dominated the financial news because after the ING, they are also suspected by the Dutch Public Prosecution (in Dutch: Openbaar Ministerie/OM) of violating the Anti Money Laundering Directive (AMLD). The ABN AMRO is suspected of a special form of money laundering by the Public Prosecution but what is this form of money laundering? Note: this article is written based on Dutch law

Culpable money laundering: a legal consideration

In legal dogmatics it is often said that language is the most important instrument of a lawyer, but also for the legislator. We see this reflected in the legal texts of various offenses. Culpable money laundering, for example, is a more serious offense than the one for which ING reached a settlement with the Public Prosecution Service in 2018. ING has arranged due to serious negligence in preventing money laundering. The difference in the seriousness of the two different crimes is in the words “culpable” and “prevent”. Culpable money laundering means that a company helped with money laundering but that they were unaware that the money came from criminal activities even-though they should reasonably have known. ING, on the other hand, acted negligently in preventing money laundering, so they are not guilty of money laundering.

In addition, there is something else going on in criminal law with regard to guilt. Guilt has different meanings in criminal law; it can be an element or a component. If guilt is a component we call it culpa.

In 2008, the so-called AMLD was introduced in the Netherlands. AMLD stands for Anti Money Laundering Directive. It is a combination of two previously existing laws; the Identification of Services Act and the Disclosure of Unusual Transactions Act. The AMLD has a risk-oriented approach, which means that institutions subject to AMLD make a risk assessment of their clients. The main objective of the AMLD is to maintain integrity in the financial system, which includes preventing and combating money laundering and terrorist financing. Below you can read which steps to take with an AMLD check and why this law is important in the Dutch legal system.

The AMLD imposes the following obligations on sellers of goods, brokers in the purchase and sale of goods, brokers and brokers in real estate, appraisers of real estate, operators of pawnshops and domicile providers. By answering the questions, you will immediately know how to fulfill your gatekeeper position according to the guidelines of the AMLD.