Since the introduction of the Fourth Anti-Money Laundering Directive estate agents are required to have a Customer Due Diligence policy. This means, among other things, that agents are obliged to conduct a client survey to determine whom they do business with, and what risks are associated with that.
The AMLD has been drawn up to prevent money laundering and terrorist financing. The AMLD has been in force in the Netherlands since August 1, 2008, and was last amended on January 10, 2020 to the fifth European anti-money laundering directive (AMLD5). Under the AMLD, transactions concerning real estate are also included, which entails additional obligations for brokers, appraisers and intermediaries in transactions concerning real estate.
The most important elements of the AMLD are customer due diligence, the notification obligation and the retention obligation. In summary, this means that a broker must investigate the parties that are being brokered between to determine who they are. In addition, the broker is obliged to investigate whether there is a risk of money laundering or the financing of terrorist agencies.
This client investigation is also referred to as the client investigation or the Customer Due Diligence (CDD).
In addition, every broker is required by the AMLD to have a written standard policy for this. This must comply with the guidelines given by the Central Government regarding AMLD for estate agents.
The first step in standard customer due diligence is to establish and verify the identity of the client and counterparty in a transaction. This means that the auditor must verify whether the documents provided are authentic, whether they are consistent with the parties involved, and whether no external interested parties are involved in the transaction.
In transactions with a company or agency, the broker must identify who the Ultimate Beneficial Owner (UBO) is and apply client research to it. The provided identification data and documents should be recorded in a client file in accordance with the relevant retention obligation of the Wwft.
In addition to the investigation into the identity of the parties involved, the AMLD also requires the broker to conduct an investigation into the risk profile of these parties. The risk profile is an indication of the risk of money laundering or terrorist financing that clients entail. Examples of situations that entail an unacceptable risk under the AMLD are clients who use false identities, possess inexplicable assets, or act on behalf of non-transparent foreign bodies. To determine a risk profile, the Central Government recommends using the risk matrix AMLD for brokers of the tax authorities.
If the broker's customer due diligence reveals an increased or unacceptable risk of money laundering, the broker is obliged to report this to the FIU (Financial Intelligence Unit) of the national government. The duty to report also applies if the customer due diligence does not yield the desired results, or if a transaction can be seen as unusual. The FIU then decides whether the unusual situation is actually suspicious, and takes further action or asks the reporting person for more information.
When submitting a report, the broker is also obliged to adhere to a stricter retention obligation.
The retention obligation obliges a real estate agent to keep all data regarding customer due diligence for at least five years, and to make it accessible for any further investigation. Once a report has been made to the FIU, this obligation also applies, with a stricter requirement for the storage of data. In this case, all data required to reconstruct the transaction, a copy of the notification and a confirmation of receipt from the FIU must also be kept.
As a result of the identified parties, there may be grounds for stricter customer due diligence. Examples of reasons for tightening up the investigation are: the relationship of parties from risk countries or politically exposed persons, transactions by means of cryptocurrencies, or if one of the parties is negatively known to a financial regulator.
The guidelines for initiating an in-depth investigation can be found in section 5.3 of the AMLD guidelines for brokers.