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The Dutch government has confirmed an overhaul of its anti-money laundering (AML) policy as it seeks to lighten the compliance burden for payment service providers (PSPs) and ensure customer access to payment accounts.
In a letter to parliament, government ministers Eelco Heinen, responsible for financial services, and David van Weel, the justice minister, acknowledged that the country’s existing AML framework has placed disproportionate pressure on gatekeepers, without delivering the intended results.
“In recent years, the gatekeeper role in the Netherlands has not functioned well, especially at banks,” the letter says, citing failures by several financial institutions in recent years to properly detect and prevent illicit activity.
It goes on to state that this has led to major enforcement actions and sweeping compliance overhauls that have, in some cases, proved excessive.
According to the ministers, “this intervention has led to an overreaction, both in the sector and among the supervisors. As a result, the anti-money laundering approach has gone too far in practice, with negative consequences for citizens and entrepreneurs.”
“There are many examples that show that the efforts of banks have a disproportionate impact on customers,” the ministers warn.
Because of this, the new strategy emphasises a new approach for firms and supervisors to take to AML policy, “reducing the burden on bona fide entrepreneurs and citizens” and “increasing barriers for criminals”.
What is in the strategy?
The reformed AML strategy is built around five core principles that are aimed at improving effectiveness while reducing unnecessary burdens:
- Encouraging a risk-based approach.
- Promoting data sharing and technology.
- Improving the accuracy of the Ultimate Beneficial Owner (UBO) register.
- Increasing public awareness and communication.
- Ensuring access to bank accounts.
In prioritising a risk-based approach, the government is urging PSPs to tailor their AML efforts according to actual risk levels.
This means focusing on high-risk customers and transactions rather than subjecting low-risk individuals and businesses to excessive checks. Supervisors such as De Nederlandsche Bank (DNB) are expected to align their oversight accordingly.
The government’s promotion of enhanced data sharing between banks, law enforcement and regulators includes a pilot project at the EU level to explore cross-border information exchange and the integration of banks with the country’s national Personal Records Database to simplify identity verification.
The authorities are also aiming to make the UBO register more accurate and functional while strengthening privacy safeguards. Access will be limited to government bodies, gatekeepers and others with legitimate interests, including journalists.
Better consumer outcomes are also a key focus of the government’s agenda, and a targeted communication campaign will seek to improve public understanding of AML rules and reduce the stigma felt by customers mistakenly caught in compliance processes.
The campaign is designed to strengthen societal resilience to financial crime without discouraging legitimate financial activity.
Finally, to address reports of de-banking practices, the government is pushing PSPs to voluntarily ensure that all bona fide businesses and non-profits can access basic banking services, stating that if voluntary action falls short then statutory access rights may be introduced.
Support from the industry
In a statement released to the press, the Dutch Banking Association (NVB) welcomed the new strategy.
“The government explicitly states that banks will focus more on the major money laundering risks. And that banks will receive sufficient comfort from supervisors to be able and allowed to do less in the case of lower risks,” the trade association said.
It added that it is “pleased with this clarity and sees it as an encouragement to continue to work with supervisors to find the risk-oriented space that the anti-money laundering regulations offer, for example by further developing standards for risk-oriented customer research.”
However, the trade association warned that effective policy will need to be laid out for this to succeed.
“For all these measures and intentions, it is true that a lot of work still needs to be done by the government, public parties and the sector,” the statement says.
“Banks are very motivated to work hard on this in the coming period with all parties in the money laundering chain and look forward to even more intensive cooperation so that we spare well-intentioned citizens and make it as difficult as possible for criminals.”
