On 20 May 2015 the European Parliament adopted the new anti-money laundering directive (link to Dutch/English version for each page), the ‘AMLD4’. This directive on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing must be introduced by the member states before 26 June 2017.
In the Netherlands, the European anti-money laundering regulations are currently implemented in the Money Laundering and Terrorist Financing (Prevention) Act (the ‘Wwft’). On grounds of this law, lawyers and civil-law notaries are required to identify the ultimate beneficial owners (UBOs) for specifically described transactions and report unusual transactions.
Who can be designated a UBO? An ultimate beneficial owner is:
- a natural person who holds a stake of more than 25% of the capital interest or can exercise more than 25% of the voting rights in the meeting of shareholders of a legal entity other than a foundation, or can exercise actual control in this legal entity in some other way (unless this legal entity is a listed company);
- a beneficiary of 25% or more of the assets of a foundation or trust or the person who has special control over 25% or more of the assets of a foundation or trust.
This regulation imposes burdens (in some cases heavy ones) on the practice of a civil-law notary or lawyer. For our clients, simply handing over these data, personal and otherwise, is not always a sinecure, since the information involved is often privacy-sensitive. In the period before the AMLD4 was adopted, the KNB (Royal Notarial Association) and Minister Dijsselbloem argued that the regulations in this area should be increased as little as possible. However, the escalation of European efforts to fight money laundering, tax evasion and terrorism financing was the deciding factor.
The adoption of the AMLD4 will undoubtedly have consequences for legal and financial service provision and the questions clients will face from these service providers. It will also have consequences for the contents of the Wwft. Clients will not notice any changes in the short term, but behind the scenes the notarial profession will have to get to work on the new requirements. And the profession will also have to prepare itself for more extensive duties like those included in the AMLD4, such as the UBO register.
As soon as there are new developments, we will of course devote attention to them on legalknowledgeportal.com.