Banks, DNB compromise on strict money laundering supervision

Banks have reached a compromise with the Dutch central bank DNB about ultra-strict money laundering controls. Instead of carefully checking all clients for signs of money laundering, the most intensive checks will happen in a more risk-based manner, the Association of Dutch Banks (NVB) said in a press release. “Bona fide customers will soon be able to open a bank account more easily and will receive fewer difficult questions from their bank,” the NVB said.

The DNB’s money laundering rules are intended to prevent criminals from abusing the Dutch financial system. But banks have argued that they are vague, unclear, and redundant for years. Every customer - even ones that have been doing non-suspicious business with a bank for years - has to answer a whole list of questions about the origin of their assets or the nature of their company before they can open a new account. The checks require tens of thousands of employees and cost billions of euros.

In this new compromise - a guideline for risk-based customer checks - only high-risk customers will be subject to the most intensive money laundering and terrorism funding checks. For example, bona fide customers will no longer have to answer questions about their spending in high-risk countries if they are on holiday there, and their expenses “remain in line with what you can expect from an ordinary tourist,” the NVB said.

Another example of less customer impact concerns the identification and verification of the “ultimate beneficial owner” of a company. In the new standard, banks can use the UBO register for low- and neutral-risk customers and only requires confirmation from the customer. Only high-risk clients will have to provide further information.

According to the NVB, the new guidelines mean “that banks do not have to bother their customers as often in scenarios with low or neutral risk. And that the bank employee can focus on the real risks. So: more where necessary, less where possible!”