Entities that are not a bank, but carry out banking activities
As a non-bank financial institution, you are obliged to report unusual transactions to FIU-the Netherlands. This is provided for in the Money Laundering and Terrorist Financing (Prevention) Act (Wwft). You are required to report both completed transactions and transactions that have not yet been completed (intended transactions). This way you contribute to the fight against money laundering, predicate offences and terrorist financing.
Branch office in the Netherlands of any person, not being a bank, who makes his/its principal business the carrying out of one or more of the activities listed under points 2, 3, 5, 6, 9, 10 and 12 of Annex I of Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit entities and the prudential supervision of credit entities and investment firms (OJEU 2013, L176) (Wwft Act Section 1, subsection 1, part a, sub-subsection 9 in conjunction with sub-subsection 2).*
The relevant provisions of the Annex I of Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 are:*
2. Lending including, inter alia: consumer credit, mortgage credit, factoring, with or without recourse, financing of commercial transactions (including forfeiting)
3. Financial leasing
5. Issuing and administering means of payment (e.g. credit cards, travellers' cheques and bankers' drafts)
6. Guarantees and commitments
9. Advise to undertakings on capital structure, industrial strategy and related questions and advice as well as services relating to mergers and the purchase of undertakings
10. Money broking
12. Safekeeping and administration of securities
When do I report a transaction?
You are required by law to be alert to the transactions and actions of your customers, and to report unusual transactions. As a non-bank financial institution, you know what is usual in your sector. You are therefore best positioned to assess whether a transaction is unusual and may be related to money laundering, predicate offences or terrorist financing. That underlines the importance of your professional judgment.
There are transactions that you should always report, regardless of the circumstances. These are transactions that meet the objective indicators. An overview of all the indicators that help you to assess transactions is given below. In addition, the general guidelines of the Ministry of Finance and the Ministry of Justice and Security and the guidelines of De Nederlandsche Bank (DNB) provide pointers on complying with the law. DNB is your supervisor and monitors your compliance with your obligations under the Wwft.
What indicators help me to assess transactions?
There are 6 indicators that may be applicable to institutions with banking activities. They will help you determine whether you should file a report with FIU-the Netherlands. You must always report transactions that meet the objective indicator. For the subjective indicator, it is particularly important that you assess whether a transaction is unusual.
The literal description of the indicators in the Wwft Implementing Decree is given below. Use the codes in front of the indicators when reporting an unusual transaction. If your report is based on a subjective indicator, it is important to include a detailed description of the transaction and explain why you suspect money laundering or terrorist financing.
Objective01 – "It stands to reason that transactions reported to the police or Public Prosecution Service in connection with money laundering or terrorist financing should also be reported to the Financial Intelligence Unit; after all, there is a presumption that these transactions may be related to money laundering or terrorist financing."
Objective04 - "A transaction for an amount of €10,000 or more, involving cash exchange into another currency or from small to large denominations."
Objective05 - "A cash deposit for an amount of €10,000 or more in favour of a credit card or a prepaid payment instrument (prepaid card)."
Objective06 - "The use of a credit card or prepaid payment instrument (prepaid card) in connection with a transaction for an amount of €15,000 or more."
Objective12 - "A transfer of money for an amount of €2,000 or more, unless it concerns a transfer of money by an institution that has entrusted the settlement of the transfer of money to another institution that is also subject to the reporting obligation, as referred to in Article 16, paragraph 1, of the Act."
Do you believe that a completed or intended transaction meets one or more of these indicators? If so, you are legally obliged to report it to us. Reports based on the subjective indicator may, for example, concern customers who refuse to identify themselves.
Of course, there are many more types of unusual situations. More information about this is given in the practical examples for non-bank financial institutions. The examples will give you an idea of what to consider. They help you to better recognize unusual transactions and decide whether you should file a report.
What happens to an unusual transaction?
An institution that has reported an unusual transaction receives an automatic message, i.e. an acknowledgement of receipt. This is important in connection with indemnification. We will investigate this unusual transaction. If we declare the transaction suspicious after investigating it, it is made available to investigative, intelligence and security services. They conduct a further investigation based on their own priorities.