Measures to prevent money laundering and terrorist financing

Do you sell or do you mediate in the sale of goods in the Netherlands? You have to be aware of the risks of money laundering or financing of terrorism. For example in case of large payments for jewellery, vehicles, art objects, or real estate. According to the Money Laundering and Terrorist Financing (Prevention) Act (Wet ter voorkoming van witwassen en het financieren van terrorisme, Wwft, in Dutch), you therefore may need to perform customer due diligence checks on your customers.

Who must conduct customer due diligence?

You have to conduct a customer due diligence check if you fall under 1 of the following occupational groups (in Dutch):

• buyer and seller of goods
• intermediary in the purchase and sale of certain goods
• buyer and seller of art
• real estate agent, appraiser, operator, or intermediary for real estate and rental agreements
• operator of a pawnshop
• domicile provider

When do you conduct customer due diligence?

There are different criteria for each occupational group on when to conduct customer due diligence. For example:

• when large (cash) amounts (€10.000 or more) are involved
• with the purchase or sale of vehicles, ships, art, antiques, precious stones, or jewellery
• in the mediation of real estate transactions or rental agreements

You must conduct customer due diligence before you enter into a purchase and/or sales transaction or intermediary agreement. Or before you enter into a business agreement and provide services.

How do you conduct customer due diligence?

Does a transaction with a customer meet the criteria for a customer due diligence check? You must check the identity of your customers and record them for at least 5 years. Is your customer a legal entity, such as an unlisted private or public limited company (BV or NV), or a general partnership? You must establish the Ultimate Beneficial Owner (UBO). For instance, by verifying who the actual directors or shareholders of a company are.

You make your own risk assessment, based on your customer’s background, the type of service they request, and the risk of money laundering and financing of terrorism. You include the way you perform your risk assessment in your compliance rules. You can use the recommendations from Financial Intelligence Unit-Netherlands (FIU) to set up your customer due diligence check.

Types of customer investigation

There are different types of customer due diligence checks:

• Normal: the standard customer due diligence to establish your customer’s identity.
• Simple: for transactions with a low risk of money laundering or financing terrorism
• Comprehensive: if the customer is settled in a country that has been flagged as high-risk for money laundering and financing terrorism by the European Commission, or if they are (related to) prominent political figures.

You can find out more on conducting customer due diligence checks (in Dutch) at the Dutch Tax and Customs Administration (Belastingdienst).

Unusual and cross-border transactions

Appraisers do not have to conduct a customer investigation, but they should report unusual transactions.

Are you an estate agent or immovable goods mediator? You should also investigate the party your customer partners up with for your assignment.

Do you work as an intermediary (such as accountant or tax consultant)? You have to report any cross-border constructions that you believe are set up to avoid taxes to the Dutch Tax and Customs Administration.