On 1 August 2008, the Law for the Prevention of Money Laundering and Financing of Terrorism (WWFT) entered into force. The WWFT applies to giving advice and providing assistance in the following (intended) transactions:
- the purchase/sale of property;
b. managing money and other asset values;
c. founding or managing legal entities or companies;
d. the purchase/sale or takeover of companies;
e. work activities in the financial field.
Identification obligation
A strict identification obligation applies to all the services (nearly the entire work field of the notary with the exception of family and inheritance law) that fall under this law. Every client that wishes to have a notary carry out a service is required to first personally identify himself/herself. Even if the notary has known the person for years.
The identification must take place prior to entering into business relations with the client or carrying out the incidental order. For a notary firm, it applies that the identification can ultimately take place upon the signing of the notarial deed, as is also prescribed by the Notaries Act.
Citizens of the EU/EER can identify themselves as based on a valid national passport or driver’s license (as long as the holder resides in the Netherlands and the driver’s license includes a photo) or a European identity card. Other persons can identify themselves as based on a valid travel document or a residence permit.
The identification of a legal entity such as a B.V. initially takes place as based on a recent and original extract from the trade registry.
Client investigation
The WWFT also requires that an investigation is carried out into the background of a client (and possible ultimately interested parties) and his/her risk profile in the following cases:
- When entering into a business relationship, or a relationship that will last for some time with a client in or from the Netherlands (sustainable service provision);
b. When carrying out an incidental transaction in or from the Netherlands for the benefit of a client and of at least € 15,000, or two or more transactions that are related to a combined value of at least € 15,000 (incidental service provision);
c. When there are indications that the client is involved in money laundering practices or financing terrorism;
d. When there is doubt about the reliability of the client information received earlier; or
e. When the risk of involvement of an existing client in money laundering or financing terrorism provides reason to do so.
In such cases, the notary is required to investigate the origin of the funds.
Notification obligation (formerly known as the MOT Act: notification of unusual transactions)
If the notary suspects that he is asked to carry out services that may concern money laundering practices or terrorist activities, he is required to report this to the unusual transactions contact point officially called FIU-Nederland (www.fiu-nederland.nl). Also when it concerns a proposed transaction that has yet to be carried out. In this case, by law, the notary may not inform the client.
Notaries also may not accept cash amounts greater than EUR 15,000 according to their own code of conduct. When an amount of EUR 15,000 in cash is paid anyway or is being considered, the notary must report this to the contact point. This also applies if the notary pays out an amount of more than EUR 15,000 in cash at the request of a client or has a bank pay this amount. For filing tax declarations such as inheritance declarations, the notification obligation applies if money laundering is suspected.
Intake interview
The notary does not have a notification obligation if the (proposed) money laundering activities are discussed in an intake interview. This means clients are free to discuss anything with a notary. The legal obligations as described above apply from the moment that the notary has actually accepted a case and it is clear that the requested service falls under the legal provisions.