Money laundering and the Wwft- specialized lawyer
Money laundering is a crime that is frequently used by the Public Prosecution Service to prosecute, but violation of the Money Laundering and Terrorist Financing (Prevention) Act is also enforced by many other government bodies, such as the Tax and Customs Administration, Wwft Supervision Office, De Nederlandsche Bank (DNB), the Netherlands Authority for the Financial Markets (AFM), the Financial Supervision Office and the Dutch Bar Association. Virtually every entrepreneur/professional therefore has to deal with the Wwft. The Wwft requires extensive checks to identify clients (the client survey, Know your customer) and also requires reporting unusual transactions. A specialized Wwft lawyer can give you some guidance in understanding the content of the regulations and specific knowledge of the concept of money laundering.
What exactly is money laundering? A lawyer explains
Money laundering is the legal process of concealing the origins of money obtained illegally by passing it through a complex sequence of banking transfers or commercial transactions. It is therefore the intention that criminal assets are issued, in order to hide this from the view of the judiciary. For the exact legal definition, consult the Dutch Criminal Code.
Types of money laundering: debt laundering and intentional money laundering
There are various forms of money laundering. In case of intentional money laundering, the person concerned knows that the income is derived from crime. It is hard for the Public Prosecution Service (or another supervisor) to come to a proven statement. There will namely have to be evidence showing the design, such as intercepted telephone calls and or the confiscated administration.
The threshold for debt laundering is much lower and not without criticism. The Act states that it is sufficient that he/she should reasonably suspect that there is criminal money/criminal proceeds. There is (very) much case law on this.
Presumption of innocence not with respect to money laundering?
The presumption of innocence is one of the most important protective measures in criminal law. It is contained in Article 6 of the ECHR and is reflected in various provisions of the Criminal Code. It goes further than just “innocent, until proven guilty”. It includes, among other things, that the burden of proof of a criminal offense (but also a punishable offense) lies with the government, that the suspect has the right to remain silent, that the suspect does not have to cooperate with his own conviction, that in case of doubt judges must acquit the suspect that the judges must not be biased.
Debt laundering conflicts with the presumption of innocence. For example, refusing to make a statement about assets may contribute to the assumption that a crime has been committed. Indeed, debt laundering is a reasonable presumption and this is the case when the perpetrator of the fact could have suspected that the object had a criminal origin and that he should not have been able to act without further investigation when he thought about the information about the property known to him. Although it is still up to the Public Prosecution Service to provide evidence to prove that suspicion, the suspect can defend himself by issuing a statement to demonstrate that the money is not a crime.
Enforcement of Wwft: an order subject to periodic penalty payments, administrative fines, imprisonment
The Wwft contains various enforcement powers. The supervisor can impose an order subject to periodic penalty payments, impose an administrative fine, but it can also suffice with an instruction. Enforcement powers depend on which article is being violated and requires the assistance of a specialized Wwft. The question is, in fact, whether the supervisor does use statutory powers.
Wwft and administrative fine
The administrative fines can be very significant. The maximum amount amounts to EUR 5.000.000, but this can be (much) more if there is a criminal advantage. If the regulator were to consider depriving the unlawful advantage, the fine could be twice the amount of the unlawful advantage.
Imprisonment for violation of the Wwft and money laundering
The punishments for the money laundering offense are not harsh. This is a violation of the articles in the Criminal Code. For violations of the Wwft, specific enforcement powers are included in the Wwft, but Wwft offenses are also punishable under the Economic Offenses Act. If institutions that fall under the Wwft are prosecuted under criminal law via the Wwft, this has the advantage for the supervisor that the burden of proof is very low. This usually concerns colorless intent, where the perpetrator’s intent is aimed at the prohibited behavior and not that the perpetrator is fully aware that his act is punishable.
To whom does the Wwft apply?
The Wwft has a very wide range of applications. The term institution is used, in which the institution is divided into three main categories. These are (1) banks, (2) other financial companies and (3) designated professionals. This also includes institutions that you may not have thought of as an entrepreneur in the first instance. For example, real estate agents fall under the Wwft, but also accountants, tax advisors, car dealers, appraisers, pawnshops, etc. Every entrepreneur should actually take into account that the Wwft applies to him/her.
Wwft and/or questions about money laundering risks
In the event that you have any doubts about the Wwft, or need help in drawing up the correct internal KYC procedures/reports and/or are confronted with a money laundering supervisor, please do not hesitate to approach Jasper Hagers, our Wwft lawyer.