Dutch banks need better money laundering checks and more vigilence says central bank

Banks are increasingly carrying out checks to verify that their customers are not laundering money, financing terrorism or violating sanctions, De Nederlandsche Bank (DNB) said on Monday. At the same time, the Dutch central bank noted that some banks are delaying or scaling back improvements to their controls and checks. As a result, they have to do more to get their controls in order.

From July 2022 to December last year, DNB checked whether banks were complying with the controls. DNB said it saw major differences between banks and believes that some banks needed to improve their risk assessments. In-depth data analysis is only carried out to a limited extent.

By law, lenders must conduct additional investigations if they suspect that a customer is laundering money, financing terrorism or not complying with a sanction. According to the DNB, several banks also do not always report if a customer might be laundering money, even though they are required to report this.

The central bank did not say how many banks are not complying with the rules to the extent necessary, nor did it say which banks need to do a better job. DNB reported that it has issued ten fines to financial organizations between July 2022 and December 2023. For example, trust office TMF received a fine of more than three million euros last June because its customer due diligence did not meet legal requirements. The office therefore did not really know how its clients obtained their money.

Money laundering regulations have been causing problems at Dutch banks for years. ING and ABN Amro both had to pay hundreds of millions of euros in settlements with the Public Prosecution Service. Rabobank received a penalty of 500,000 euros in 2018 because the bank had violated the rules. That amount had to be paid in 2021 because the procedure had not been sufficiently improved at that time.

De Volksbank, the company behind SNS, ASN Bank and RegioBank, also did not do enough to combat money laundering and financing terrorism, DNB said last August. The central bank announced that it wanted to impose a financial penalty on de Volksbank.