New banking law to fight money laundering will require less data sharing than planned

Banks will not be required to share as much data with each other as the Cabinet originally intended with its new anti-money laundering law. The Cabinet is adjusting the bill against money laundering, after serious criticism from the Council of State and the Dutch Data Protection Authority (AP).

With the law, the government wants to prevent criminals from spreading out their income across different banks, and thus staying under the radar of money laundering detection. It is therefore the intention that banks can exchange customer data with each other.

It was the method the Cabinet had in mind that went too far, the Council of State and the AP ruled. According to the Council, the law as it was intended may lead to "far-reaching breaches of the confidentiality of data of potentially millions of citizens and companies."

The AP referenced a potential "banking dragnet" and a "far-reaching breach of the protection and confidentiality of customer data." The AP warned that people can unjustly lose access to their accounts out of no fault of their own.

The Cabinet has now amended the bill so that the amount of data that banks are allowed to share is "limited to the extent it is possible." The safeguards for sharing information have also been tightened. In addition, every four years an evaluation will be carried out to determine whether the new law is working. In addition, the Cabinet has better substantiated why the law is necessary.

The bill also states that people may pay no more than 3,000 euros in cash for the purchase of goods. This will also apply to art dealers and pawnshops.

Banks called the AP's advice on the matter "disappointing." Medy van der Laan, the chair of the Dutch banking association NVB, said, "We understand the role of the AP to closely monitor privacy interests. However, with its position, the AP does not seem to consider the importance of preventing criminal use of the financial system by individuals and companies."

But the banks do feel that with the proposed legislative changes, "the potential of Transaction Monitoring Netherlands (TMNL) can be fully exploited." TMNL is an initiative that five banks set up in 2020 to work more closely together in tackling money laundering. If TMNL encounters unusual transactions by monitoring banking data, these "alerts" are reported to the bank in question. The bank can then investigate the issue further and present a case to the authorities if required.