This page provides a brief description of the Money Laundering and Terrorist Financing (Prevention) Act (Wwft). The Act contains provisions regarding customer screening, identification and verification of customers, and the reporting of unusual transactions. The following subjects will be addressed:
The objective of Wwft is to uphold the integrity of the financial system. Public confidence in this system will be severely damaged if parts of the system are used to launder the proceeds of crime and to finance terrorism. As a result of Wwft, not only the information position of the investigative services and the judiciary is strengthened, but also of the reporting entities.
The Wwft has a risk-oriented approach. This means that the entities themselves have to assess the risks certain customers or products entail. The Act offers the entities the possibility to adjust their efforts to these risks. This approach has been incorporated in the compliance regulations, specific to the entity, and fits within their responsibilities and the duty of due care to which they are subject. The internal regulations are custom-made and become more stringent as the estimated risk increases. In addition, the Wwft does not prescribe as mandatory how an entity must achieve results; it only describes the required result.
The Wwft defines under the term ‘entity’ to which the Act applies. The term entity includes both natural and legal persons.
The Wwft applies to the following institutions:
-Life insurance brokers
-Payment service agents
-Payment service implementers acting for a payment service provider with a license from another EU member -state
-Payment service providers
-Natural or Legal persons who have supplied their address to another entity
-Electronic money institutions
-Traders / sellers of goods
-Institutions for Collective Investment in Securities (ICBE)
-Institutions, other than banks, that carry out banking activities
-Safe custody services
Entities with an obligation to report unusual transactions must do so to FIU-the Netherlands on the basis of -objective and/or subjective indicators. Failing to report unusual transactions may imply consequences.
A customer’s identity must be verified and recorded before any transaction takes place. Identification of customers is not only mandatory at first contact, but also applicable with long-lasting relations as well as specific incidental transactions. The entity requests each customer to personally present a valid ID document. Once the identity of a customer has been established, and he or she returns regularly, the entity will not have to establish his or her ID on every visit.
When the reporting entity has doubts about the authenticity of an ID document, it is prohibited from providing its service. This also applies if a customer cannot or will not provide proof of identity.
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