Netherlands AFM Investment Firm AML

On 3 October, AFM issued rules on investment institutions risks of AML.

  • Concern of managers/administrators of investment institutions facing AML/CTF risk.
  • AFM asked administrators what they do to prevent becoming involved in laundering.
  • Concluded that compliance with laws needed to be improved for a number of areas.

Monitoring Prevention

  • AFM and DNB supervises AML, Financing of Terrorism Act (Wwft), Sanctiewet 1977.
  • AFM sent questionnaire to 223 registered administrators of investment firms/funds.
  • Group is exempted from AIFMD license but supervised by AFM re Wwft/Sanctiewet.
  • Gave individual feedback indicating which AML components they need to improve.


  • Almost half of registered administrators lack a written wwft and sanctiewet policy.
  • This policy requires procedures, to determine when a client falls in a risk category.
  • Policy clarifies risks of involvement in AML and and how the risks can be controlled.
  • Know your Client
  • Most administrators research their clients, but half did not review other business
    relationships, e.g. seller of real estate invested or people behind investor startup.
  • One third of clients copy a valid ID while law stipulates documentation is required.
  • Copy is only allowed if client's or stakeholder's identity (UBO) was already verified.

High Risk Countries

  • AFM has seen that a number of registered administrators invest in risky countries.
  • Or clients have a connection with a risky country (for example, through the UBO).
  • AFM cited high risk countries identified as such by the Financial Action Task Force.
  • Those in Top 50 of corruption perceptions index, or under international sanctions.
  • If do business in risky countries, administrator should take actions to reduce risk.
  • Obligation to screen list sanctions generally complied with: almost 90% doing this.
  • Each firm is responsible, cannot rely on control done by others, e.g. Dutch banks.
  • Effectiveness
  • AFM advises companies to ascertain whether policies and procedures meet laws.
  • Ahead of implementation of the Fourth AML Directive (AMLD4) in Wwft in 2018.
  • Will become mandatory for Wwft institutions to identify and clarify its AML risks.
  • The WWFT institution, must then take measures, to limit and control these risks.
  • In 2018, AFM will research compliance with Wwft, by licensed investment firms.