Guideline on the Anti-Money Laundering and Anti-Terrorist ...

1 Guideline on the Anti-Money Laundering and Anti-Terrorist financing Act and the Sanctions ActDecember 2020 version2 This Guideline applies to institutions that are subject to DNB supervision and complements the General Guidance on the Anti-Money Laundering and Anti-Terrorist financing Act (Wwft) of the Ministry of Finance and the Ministry of Justice and Security,1 and the Guidance Financial Sanctions Regulation of the Ministry of The guidance documents clarify the various obligations arising from the Wwft and the Sw and provide tools for the implementation of these obligations. The other Wwft supervisory authorities also provide guidance for the institutions falling under their Guideline is neither a legally binding document nor a DNB policy rule as referred to in Section 1:3(4) of the General Administrative Law Act (Algemene wet bestuursrecht) and does not have or aim to have any legal effect.

2 This Guideline does not replace legislation and regulations, policy rules or supervisory regulations in this area. The examples in this Guideline are not exhaustive and cannot be deemed sufficient for compliance with the legal requirements in all cases. DNB intends this Guideline to serve as an aid for the explanation and application of the legal Available for consultation at: (available in Dutch only). 2 Available for consultation at: (available in Dutch only).3 AFM, Tax Administration/Wwft Supervision Agency, Financial Supervision Agency, Gambling Authorities and the presidents of the Netherlands Bar. Guideline on the Anti-Money Laundering and Anti-Terrorist financing Act and the Sanctions Act3 Contents1 Introduction 52 Organisation of operational management Ethical operational management Training and awareness Ethical business culture Internal whistleblower scheme and integrity reporting desk Know your customer (KYC) / Customer due diligence (CDD) Sanctions regulations Foreign branches and subsidiaries of Dutch institutions 133 Risk-based thinking.

3 The systematic integrity risk analysis Organisation of integrity policy Design of systematic integrity risk analysis (SIRA) Risk factors Classification of customers into risk categories Customers and products with a heightened integrity risk Unacceptable risks 234 Customer due diligence Regulatory framework Identification and verification Entering into a business relationship Not entering into or terminating the business relationship Ultimate beneficial owner (UBO) Purpose and nature of business relationship Source of funds Simplified customer due diligence, low-risk factors and exceptions to the customer due diligence Enhanced customer due diligence and high-risk factors Outsourcing 5245 Transaction monitoring and reporting of unusual transactions General information Recognising patterns and transactions Focus on high-risk jurisdictions Assessment of transactions, measures and reporting Obligation to report unusual transactions FIU reporting procedure Indemnification Confidentiality under the Wwft Legal claims and confidentiality under the Wwft 626 The Regulation on information accompanying transfers of funds (Wire Transfer Regulation 2)

4 General information Background to WTR2 Scope of application Obligations of payment service providers and intermediary payment service providers Detecting and assessing incomplete information EBA Guidelines FIU notifications Integrity supervision under the Wwft 647 Sanctions regulations General information Administrative organisation and internal control (AO/IC) The relationship concept Transaction monitoring Reporting to DNB Hit reports, FIU reports and deadlines 708 Record-keeping, data retention obligation and the General Data Protection Regulation (GDPR) 72 Guideline on the Anti-Money Laundering and Anti-Terrorist financing Act and the Sanctions Act51 IntroductionIn addition to solidity, integrity is a prerequisite for a sound financial system.

5 De Nederlandsche Bank (DNB) conducts integrity supervision of a wide range of financial and other institutions. This specific supervision is based on the Financial Supervision Act (Wet op het financieel toezicht Wft), the Anti-Money Laundering and Anti-Terrorist financing Act (Wet ter voorkoming van witwassen en financieren van terrorisme Wwft), the Pensions Act (Pensioenwet Pw), the Trust Offices Supervision Act 2018 (Wet toezicht trustkantoren 2018 Wtt) and the Sanctions Act 1977 (Sanctiewet 1977 SW). The Wwft implements the European directives aimed at preventing money Laundering and terrorist This European directive is based on the recommendations of the Financial Action Task Force (FATF). The purpose of integrity supervision is, among other things, to prevent the use of the financial system for money Laundering and terrorist financing purposes.

6 Supervision of compliance with the Wwft has been assigned to DNB for the following types of institutions: banks, branches, life insurers, payment service providers and agents, electronic money institutions, crypto service providers5, foreign exchange institutions, trust offices and institutions 4 Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money Laundering or terrorist financing , Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money Laundering or terrorist financing , and amending Directives 2009/138/EC and 2013/36/EU.

7 5 The institutions referred to in Section 23b of the Wwft: providers of services for exchange between virtual and regular currencies and providers of custodian The Wwft refers to parties other than banks whose principal business is performing one or more of the activities included in points 2, 3, 5, 6, 9, 10, 12 and 14 of Annex I to the Capital Requirements Article 1 of the Designation of Legal Persons under the Sanctions Act 1977 refers to Section 10(2)(a), (c) and (e) to (j) inclusive of the Sanctions Act See also: See: Bulletin of Acts and Decrees (Stb.) 2019, 265, Stb. 2020, 146, Stb. 2020, 231 and Stb. 2020, Stb. 2020, to in Section 1a(3)(a) of the These institutions must also comply with the Sw.

8 Every party in the Netherlands must comply with the Sw. Certain institutions fall under the supervision of DNB, including pension funds and is responsible for implementing and enforcing the Wwft. Enforcement takes place in conformity with the Enforcement Policy of the Netherlands Authority for the Financial Markets (AFM) and DNB on the basis of standards laid down in legislation and drew up an initial Guideline in 2011 on the recommendation of the FATF. This provided institutions supervised by DNB with guidance to enable them to comply with the statutory obligations arising from the integrity regulations. This fifth edition of the Guideline incorporates a number of changes in the light of relevant amendments to the Wwft which came into force in 2020, except for the insertion of Section 3A of the The amendment of the Wwft on 21 May 2020 introduced a registration obligation for providers of services for exchange between virtual and regular currencies and providers of custodian The 6respective provisions are part of Section 3A of the Wwft.

9 These provisions are not covered within the scope of this addition to the incorporation of relevant legislative changes, new Good Practices have been added to some sections, which have emerged from DNB s supervision investigations in recent Guideline is neither a legally binding document nor a DNB policy rule as referred to in Section 1:3(4) of the General Administrative Law Act (Algemene wet bestuursrecht) and does not have or aim to have any legal effect. This Guideline does not replace legislation and regulations, policy rules or supervisory regulations in this area. The examples in this Guideline are not exhaustive and cannot be deemed sufficient for compliance with the legal requirements in all cases. DNB intends this Guideline to serve as an aid for the explanation and application of the legal This also applies to Section V of the Implementation Act for the amendment of the fourth Anti-Money Laundering directive, Stb.

10 2020, Available for consultation at: (available in Dutch only).13 Available for consultation at: (available in Dutch only).14 AFM, Tax Administration/Wwft Supervision Agency, Financial Supervision Agency, Gambling Authorities and the presidents of the Netherlands The Wolfsberg Group is an association of eleven global banks that develops financial services industry standards for Know your Customer/KYC , Anti-Money Laundering and Anti-Terrorist financing policies ( ).This Guideline applies to institutions that are subject to DNB supervision and complements the General Guidance on the Anti-Money Laundering and Anti-Terrorist financing Act (Wwft) of the Ministry of Finance and the Ministry of Justice and Security,12 and the Guidance Financial Sanctions Regulation of the Ministry of The guidance documents clarify the various obligations arising from the Wwft and the Sw and provide tools for the implementation of these obligations.