Money Laundering and Terrorism Financing (BES Islands) Act
A service provider on the BES islands must, among other things, prevent:
- money originating from crime being laundered through the financial system
- money being used for the financing of terrorism
- persons and organizations subject to national or international sanctions from participating in the financial system
- businesses and persons benefiting from fraud and corruption.
Who is subject to AFM Wwft BES supervision?
- intermediation in the conclusion of life insurance policies against a premium as referred to in the BES Islands Financial Markets Act (Wet financiële markten BES, or ‘Wfm BES’)
- operating as an investment company as defined in the Wfm BES
- providing an investment service, defined as:
- receiving and forwarding client orders with regard to financial instruments;
- executing orders with regard to financial instruments for the account of those clients;
- managing an individual capital.
Guidance document on the Wwft BES for service providers
The new guidance document from the AFM provides further explanation on the requirements set out in the Wwft BES for serviceproviders in Bonaire, St. Eustatius and Saba. Service providers are also offered practical guidance in the form of specific examples.
Know your client
Service providers acting as an intermediary in life insurance must conduct a review of clients whose annual premium is higher than $1,400 or whose lump sum premium is higher than $2,800. These threshold amounts do not apply if there are indications that a client is involved in money laundering or the financing of terrorism. In case of such indications, the service provider is in all cases obliged to carry out a client review.
Obligation to report unusual transactions
Another important obligation concerns the reporting of unusual transactions to the Financial Intelligence Unit Netherlands (FIU-Nederland). There are various indicators that have to be used when determining whether a particular situation requires an unusual transaction to be reported. These indicators are listed in appendix A (for the services ‘operating as an investment company’ and ‘providing an investment service’) and appendix B (for the service ‘intermediation in life insurance’) to the Wwft BES Regulation.
Obligation to report under sanction legislation
To prevent activities in contravention of the Sanctions Act (Sanctiewet) 1977 (Sw), service providers must on inception and at regular intervals screen anyone involved in a financial service or transaction (see Section 3.13 (5) Wwft BES - their relations) against the sanction lists stated in the Guideline. If the service provider identifies that a relation corresponds to a natural person, legal person or entity as stated in the Sw, this must be reported immediately to De Nederlandsche Bank. In addition, the service provider must check exactly which order or prohibition applies, as this varies depending on the sanction regulation. It may for instance be the case that the service provider may no longer provide financial services to the client named in the relevant sanction regulation.
- Guidance document Wwft BES (English)
- FATF guidelines Risk-Based Approach Guidance for the Life Insurance Sector
- FATF guidelines Risk-Based Approach Guidance for the Securities Sector
- FATF statement High-Risk and Other Monitored Jurisdictions