News

The Cornerstone Report

Safeguarding America Through Financial Investigations

June 2009 - Table of Contents

Some Facts and Findings Regarding Regulation and Law Enforcement

The following is a short overview of the current requirements that money transfer businesses have to comply with in the Netherlands. This is simply an introduction; it is not meant to serve as a complete detailed description of the supervision and law enforcement of money service businesses.

Pursuant to their licensing legislation, money transfer businesses are obliged to maintain a full internal administrative and organizational procedure handbook to ensure the integrity requirements of their offices and employees. Examples of these requirements are, among others, a fit and proper test for the owner and the person in charge of setting the policy, an accountancy report by a separate accountant and a strict division between working with the clients and the handling of settlement and cashier functions.

On the basis of the Dutch AML-CFT legislation, money transfer businesses are obliged to identify each and every client (natural person and if it concerns a legal person, the beneficial owner of the legal entity), regardless of the size of the transaction. The records of the identification have to be kept for five years. Furthermore, the money transfer businesses are required to report each transfer of 2,000 euros and above to the Financial Intelligence Unit Netherlands (FIU NL). Even though these transactions are not necessarily suspicious, through analyzing and matching the information with other existing information in the FIU NL, the Dutch have discovered interesting patterns in criminal activity. The information has proven to be very useful to law enforcement. Finally, money transfer businesses are also obliged to report unusual transactions below the threshold when they have reason to believe that the transaction could be related to money laundering or terrorist financing.

Over the years, the FIU NL has seen a gradual increase in reporting by money transfer businesses. Below is a chart from the annual reports 2007 of the FIU NL: