As set out in our previous newsletters, the proposal addresses three subjects:
- A ban on cash transactions of EUR 3,000 or more for traders in high value goods (proposed Article 1f).
- Banks will be allowed to jointly monitor transactions (proposed Article 34b).
- Parties qualifying as the same institution (i.e., banks among banks, payment institutions among payment institutions) will be obliged to share specific data with each other relating to anti-money laundering and anti-terrorism financing risks (proposed Article 3b). This is the case when a potential customer meets certain high-risk criteria as a result of which the institution performing the customer due diligence must investigate whether another institution services, has serviced or rejected this potential customer in the past. This proposal is similar to Article 68 of the Act on the Supervision of Trust Offices 2018 (Wet toezicht trustkantoren 2018) and is a 'best effort' requirement (inspanningsverplichting) of the institution performing customer due diligence.
The legislative proposal was supposed to be submitted to Dutch Parliament in Q1 of 2021. However, the Dutch Council of State voiced considerable criticism on the draft proposal in its report of 13 January 2021 (published on 16 June 2022), specifically with respect to the impact on the privacy of individuals as a result of the joint monitoring of transactions. Because of this criticism, the Dutch Government amended the following aspects of the legislative proposal:
- They further motivated the necessity and the effectiveness of the joint monitoring of transactions for the combat against money laundering and terrorism financing.
- In light of the proportionality of the measure of data sharing for joint monitoring, there will be a restriction on what data may be shared.
- The joint monitoring will be evaluated regularly.
The above measures are specific Dutch plans. They are not an implementation of EU Directives. Other EU Members States, market parties and other stakeholders, will surely follow the developments relating the jointly monitoring of transactions by banks. Additionally, the obligation to investigate whether potential customers, if they meet certain criteria, have previously been serviced or rejected by another institution will likely have a strong practical implication for institutions.
We will closely follow the developments. Please let us know if you wish to discuss the (potential) implications for your institution.