This page provides a brief description of the Money Laundering and Terrorist Financing (Prevention) Act (Wwft). The Act contains provisions regarding customer screening, identification and verification of customers, and the reporting of unusual transactions. The following subjects will be addressed:
Objective of the Wwft
The objective of the Wwft is to maintain the integrity of the financial system. Public confidence in this system is severely damaged if parts of the system are used to launder the proceeds of crime and to finance terrorism. As a result of the Wwft, not only the information position of the investigative services and the judiciary is strengthened, but also of the reporting entities.
The Wwft has a risk-oriented approach. This means that the entities themselves have to assess the risks certain customers or products entail. The Act offers the entities the possibility to adjust their efforts to these risks. This approach has been incorporated in the entity’s own compliance regulations and fits within their responsibilities and the duty of due care to which they are subject. The internal regulations are custom-made and become more stringent as the estimated risk increases. In addition, the Wwft does not prescribe as mandatory how an entity must achieve a result; it only describes the required result.
Entities with an obligation to report
The Wwft defines under the term ‘entity’ to whom the Act applies. The term entity includes both natural and legal persons.
The Wwft applies to the following institutions:
Entity with an obligation to report must report unusual transactions to FIU-the Netherlands on the basis of objective and/or subjective indicators. Failing to report unusual transactions may have consequences.
A customer’s identity must be verified and recorded before the transaction takes place. Identification of customers is not only relevant at first contact, but also applies to long-lasting relations and specific incidental transactions. The entity requests each customer to personally present a valid ID document. Once the identity of a customer has been established, and he or she returns regularly, the entity does not have to ask for ID on every visit.
When the reporting entity has doubts about the authenticity of an ID document, it is prohibited from providing the service. This also applies if a customer cannot or will not provide proof of identity.
The Wwft does not prescribe the manner in which the data must be recorded.