Best practices for KYC/AML
On 21 May 2020, AMLD5 came into force in the Netherlands in the form of the amendments to the Money Laundering and Terrorist Financing Prevention Act (Wwft). From now on, crypto service companies have to step out of the grey zone. What are the new strict requirements? We’ve gained insights into the multipage documents, just for you.
The new law covers the activity of two large categories of crypto companies.
The companies who offer crypto-to-crypto exchanges are still not regulated. However, this could change due to the FATF Recommendations, which were adopted in June 2019. We’re constantly monitoring the situation. To be prepared for the changes, sign up to our newsletter down below.
From 21 May 2020, crypto service providers became regulated in the Netherlands. It was the implementation of AMLD5 that made crypto companies comply with AML/CTF standards for the first time.
With AMLD5, European states get general recommendations for the necessary changes, and each state may choose how exactly they would like the changes to be implemented. The Dutch requirements for crypto companies turned out to be rigid.
How is registration different from licensing? Both registration and licensing permit business activity in the sectors that need state supervision. However, the license is given for a certain period of time (e.g. for 1, 5 or 10 years) and warrants occasional supervision in cases such as license renewal or violation. On the other hand, registration warrants permanent state supervision for a company’s activities, post-registration.
Fees for DNB registration:
1. Registration fee (including fit and proper assessments) – EUR 5,000.
2. Regular supervision fee – an amount will be calculated by DNB based on the measures taken for 2020. At the moment, the exact figures are not mentioned.
Deadlines. The law came into effect from 21 May 2020, and the transition period for existing companies will last until 21 November 2020.
Sanctions. Companies who do not apply for registration by 21 November 2020, must cease to operate. A fine of up to 250,000 USD can be imposed for an individual violation. Other possible penalties can be reviewed in the Dutch General Administrative Law Act, the Economic Offenses Act (EOA) and will depend on the Public Prosecution Service judgement.
Registered companies will go through a regular assessment. In the case where a company ceases to comply with the rules, the registration will be cancelled.
The сhanges in AML/CTF legislation have tightened the regime for the crypto sector in the Netherlands. Providers of crypto/fiat exchanges and custodian wallet services can carry out their direct and indirect activities with clients from the Netherlands only with a DNB registration.
This law doesn’t take into consideration crypto-to-crypto exchange services and other types of crypto companies. However, that may change soon due to FATF recommendations that were adopted in June 2019. To stay up to date with the situation and be prepared for changes, sign up to our newsletter down below.
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