AMLD for notaries
The Anti Money Laundering Directive and the Counter Terrorist Financing Regime (AMLD / CTF) was instituted by the government as a means of combating money laundering and terrorist financing. Notaries are important players in this battle, which is why their activities fall under the mantle of the AMLD.
Money Laundering and Terrorist Financing (Prevention) Act
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 July 25, 2018 to the fourth European anti-money laundering directive. The AMLD covers almost all parties involved in or mediating in transactions of financial or movable property. For civil-law notaries, all activities fall under the AMLD, including support in the formation of a company.
What does the AMLD mean for notaries?
The AMLD obliges the notary to conduct a client investigation and to a notification and retention obligation. During the client investigation, the notary must, among other things, identify who the ultimate beneficial owner (UBO) is for each of his or her clients. Based on the client survey, an estimate must be made of the risk of money laundering, financing or terrorism. If this investigation shows that there is a higher risk, or if there is an unusual transaction, the notary is required to make a report to FIU (Financial Intelligence Unit Netherlands).
Under the retention obligation, it is sufficient for the notary to document the client investigation in such a way as to demonstrate that all requirements have been met. This also requires a notary office to have a written risk policy. For example, it is important that employees are adequately equipped to recognize unusual or remarkable situations and that they know what actions to take.
The client research
The client due diligence / client research simply means that the civil-law notary investigates the client if he enters into an alliance or provides a service. Three types of research are recognized by the Wwft: regular, enhanced and simplified customer due diligence. In a regular investigation, a civil-law notary's office must provide insight into and check the following matters:
- The client must be identified;
- The identity must be verified;
- The UBO must be identified and his identity must also be verified;
- The purpose and nature of the transaction/order must be determined and recorded;
- The business relationship and its transactions are monitored and, if necessary, the sources of the resources used in the relationship or transaction are investigated;
- The natural person representing the client must be identified and his identity verified. Of course, it must also be established whether this natural person is authorized to represent the client.
Depending on the findings of this investigation, it may be necessary to switch to a more stringent or simplified investigation. This always depends on the nature of the client, the transaction, or the identified parties. When a business relationship or transaction involves a higher risk, a more detailed investigation should be carried out. Article 1a of the Specific Guidelines provides example situations in which this is the case. For example, this can occur when a UBO is domiciled in a country that the European Union has identified as a risk area, or when the customer or his UBO is a politically exposed person (PEP).
UBO means the ultimate beneficial owner behind a (business) entity. Simply put, this is the person who ultimately has the most interest in a transaction or company, and this is always a natural person. Every legal entity must have at least one UBO.
Er zijn geen vaste regels voor de identificatie van de UBO, enkel een aantal indicatieve richtlijnen. Het onderzoeken van de UBO betekend in praktijk dat de eigen- en zeggenschapsstructuren van cliënten en vennootschappen achterhaald dienen te worden om zo een beste schatting van de belanghebbende te maken.
Politically Exposed Persons (PEPs)
Politically Exposed Persons are people with high administrative (policy-determining) positions that are especially susceptible to blackmail and bribery.
A distinction is made between national and local PEPs, with local PEPs (such as a mayor) there is no obligation to intensify the investigation, but this is recommended.