Implementation of the Fourth Anti-Money Laundering Directive - Part II

big brother

On 6 March Parliament approved the virtually unchanged bill for the implementation of the European fourth anti-money laundering directive (in short: the 'Implementation Act') without too many questions and discussions, despite the necessary criticism. The only amendment to the proposal since the amending letter of 31 January (in which only minimal technical corrections have been made to the text) has been to double the fine that can be imposed on the institutions subject to the Money Laundering and Terrorist Financing (Prevention) Act ('Wwft').

The bill is now before the Senate. At the moment, no input has been received from the Senate, so it remains to be seen whether a more careful and critical debate will take place there or whether, as in Parliament, it will be dismissed without any significantly critical discussion.

A draft implementing decree of the Implementation Act, also circulated by the Minister, in which, among other things, certain examples are given of persons who would in any event qualify as a UBO, has not been discussed by Parliament. Formally, no approval from the of Parliament is required for a governmental decree either, but in the light of the debate on the legislative proposal this would have made good sense, especially in view of the enormous number of highly critical reactions to this draft decree in the consultation round held before the submission of the legislative proposal.

Apart from the fact that in my opinion a definition of the UBO concept belongs in the law itself and not in a decree, the interpretation in the decree is not well worked out either. A bizarre example is the category of persons who should be considered as UBO of a foundation:

(Article 3) d. in the case of a foundation:

  1.  the founder or founders;
  2. the driver or drivers;
  3. where applicable, the beneficiaries, or to the extent that the individual persons benefiting from the foundation cannot be identified, the group of persons in whose interest the foundation is mainly established or operates; and
  4. any natural person who ultimately controls the foundation by other means.

On the basis of this provision, all beneficiaries of a pension fund, as well as those of a foundation which holds shares in administration for others (a so-called STAK, which is often used to allow children to share in the results of a family business, without being themselves involved in the business) will be considered UBOs within the meaning of the Wwft. It is at the very least remarkable that all these persons will soon have to be included in the UBO register. In my opinion, this register is not intended for that purpose. However, in the light of the rather short-sighted comments that this regulation only affects major criminals during the discussion on the Implementation Act, it is not altogether surprising.

The fact that there is still no proposal for the regulations concerning the UBO register itself is all the more regrettable and, in view of the content of the Implementation Act and the draft Implementation Decree, this does not bode well for the protection of the privacy of - as is now apparent - almost all Dutch citizens.

Holland’s hopes are pinned on its Senate...

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