Objective indicator high-risk third countries repealed as of 18 October 2019

NL Law

The Implementation Decree for the Wwft 2018 has been amended. As a result, as of 18 October 2019 institutions subject to the Dutch Anti-Money Laundering and Anti-Terrorism Financing Act will no longer have to report transactions solely on the basis that this transaction relates to an individual residing, or a legal entity having its registered office in, a high-risk third country.

The introduction in 2018 of what was termed an 'objective indicator' relating to high-risk third countries resulted in an almost 100% increase in reported 'unusual' transactions under the Dutch Anti-Money Laundering and Anti-Terrorism Financing Act (Wet ter voorkoming van witwassen en financieren van terrorisme, the "Wwft"). This increased workload reduced the effectiveness of the Financial Intelligence Unit's investigations with respect to unusual transactions.

The amendment does not, however, mean that institutions subject to the Wwft are no longer required to report unusual transactions relating to high-risk third countries. The subjective indicator, under which the institution must assess whether there are any indications that a transaction relates to money laundering or terrorism financing, still applies. In light of this subjective indicator, a high-risk third country is an indication of increased AML risks – but no longer the sole determiner.

Currently, the following 16 countries are considered high-risk third countries: Afghanistan, Bosnia and Herzegovina, Guyana, Iraq, Laos, Syria, Uganda, Vanuatu, Yemen, Ethiopia, Sri Lanka, Trinidad and Tobago, Tunisia, Pakistan, Iran and North Korea.