Consequences of anti-money laundering policy
Criminal money laundering is a major societal problem. Anti-money laundering policy must prevent the practice wherever possible. The policy names banks as gatekeepers that perform customer due diligence and monitor transactions. Banks are obliged to report unusual transactions to the Financial Intelligence Unit (FIU) for further analysis. The Dutch central bank (DNB) supervises the banks’ anti-money laundering activities.
Anti-money laundering policy can have unintended consequences for citizens and businesses if accounts cannot be opened or transactions are blocked. The Netherlands Court of Audit is investigating the consequences of anti-money laundering policy for citizens and businesses.
Why are we carrying out this audit?
The Court of Audit has received signals that anti-money laundering policy is having unintended consequences for certain groups of citizens and businesses and that the administrative burden is high. Furthermore, as from 2027 AMLA, the new EU Authority for Anti-Money Laundering and Countering the Financing of Terrorism, will assume some national oversight tasks and prescribe mandatory procedures for supervisors. We expect our audit to reveal relevant issues that will contribute to the establishment of ALMA.
In the Netherlands, anti-money laundering policy is a joint responsibility of the Minister of Finance and the Minister of Justice and Security. Banks are obliged to report unusual customer transactions to FIU-NL (Financial Intelligence Unit – the Netherlands); the Minister of Justice and Security is responsible for FIU-NL. DNB supervises banks and their anti-money laundering activities and reports to the Minister of Finance.
At issue is whether the Ministry of Finance and DNB’s anti-money laundering policy and supervision of the banking sector are organised so as to: 1) effectively mitigate the risk of criminal money laundering, and 2) not adversely affect particular groups of citizens and businesses.
Anti-money laundering policy and supervision are based largely on EU legislation. In the Netherlands, anti-money laundering policy is laid down in the Money Laundering and Terrorism Financing (Prevention) Act (WWFT). The WWFT applies to various institutions and sectors that are obliged to report unusual transactions. This audit concentrates on one sector: the banks.
What are our audit questions?
Our key audit question is:
Do anti-money laundering policy and its supervision by the Minister of Finance and DNB target the banking sector effectively, and are they proportionate to the consequences for the banks’ customers and the banks themselves?
To answer this key question, we will address the following audit questions:
- What are the consequences for specific target groups of the anti-money laundering policy and the supervision exercised by banks?
- Do the banks’ anti-money laundering measures and the associated target group approach result in plausible and proportionate signals of potential money laundering risks?
- What anti-money laundering requirements does DNB impose on banks and how is supervision exercised in practice? Does DNB understand the consequences for specific target groups?
- Does the Ministry of Finance’s supervision of DNB check whether DNB’s banking supervision has a proven relationship with significant money laundering risks? Does the Ministry of Finance take account of the consequences for specific target groups and banks?
- What requirements to prevent money laundering stem from EU rules and where does the Netherlands make additional requirements?
Do you want to take part in this audit?
The Court of Audit invites you to share any information you may have that would benefit our audit. We appreciate all contributions, knowledge and experience you may care to share with us on this topic. Simply send an email to bijdrage@rekenkamer.nl.
We read all emails carefully and treat them in confidence. However, we are not able to reply to every contribution we receive.