Companies will need to be aware of stricter and more thorough legislation on anti-money laundering (AML) in 2017. The Fourth Anti Money Laundering Directive will come into force in all member states of the European Union on 26 June 2017. This directive will be implemented in the Dutch Act on the Prevention of Money Laundering and Terrorism Financing. Among other changes, a ''UBO-register'' will be introduced. Each ultimate beneficial owner (UBO) will be registered with the Dutch Trade Register.
Stricter and more thorough AML rules
AML legislation will become stricter. Generally speaking, companies will have to give more detailed information, including on their beneficial owners, to "WWFT institutions" such as banks, lawyers, accountants and insurance companies. Simplified client due diligence will apply in fewer circumstances. WWFT institutions will have to carry out enhanced client due diligence more often, for example, when dealing with personal asset-holding vehicles and non-face-to-face business relationships.
Introduction of the UBO-register
From 26 June 2017, each company in the Netherlands must have at least one ultimate beneficial owner (UBO). In the Netherlands, this is a natural person who directly or indirectly controls the company or holds (generally speaking) more than 25% of the shares in its capital. If a company currently has no UBO, the company must designate at least one. We advise registering only one UBO with the Dutch Trade Register; namely, the natural person who is chairman (or a member) of the management board.
WWFT institutions will request large amounts of company information. We advise preparing a company model with all relevant information regarding the company and its UBOs, such as articles of association, original extracts from the Trade Register, the company's last annual report, and certified copies of the passport of both the UBO and the chairman of the management board.
If a Dutch company is also a WWFT institution - for example, a bank - AML legislation may apply to its foreign branches, and the Dutch AML procedures may have to be applied at those branches.
More details on implementation of the directive through the WWFT will be available in the coming months.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.