The changes in the WWFT BES will come into effect shortly, are you ready?

An essential tool for combating money laundering and terrorist financing in Bonaire, St. Eustatius, and Saba (BES) is the “BES prevention of money laundering and financing of terrorism” Act (also known as WWFT BES). On May 13, 2020, a bill was submitted with changes to the WWFT BES, which will come into effect on July, 2021.

The WWFT BES imposes obligations on parties that have a role in providing financial services or transferring value and thereby granting access to the financial system. Examples of these include financial institutions, lawyers, and notaries. However, it also applies to other service providers where there is an increased risk of money laundering because, for example, they trade in valuable goods, such as jewelers and car dealers. 

This bill makes changes to the WWFT BES with the aim of tightening preventive measures against money laundering and terrorist financing in the Dutch Caribbean. The bill was drawn up because of several risks identified in the National Risk Assessment BES. The report identified risks for the Dutch Caribbean in the following areas: the real estate sector, corruption, and the smuggling of money. Additionally, there were shortcomings in the previous National Risk Assessment of the Netherlands, conducted by the Financial Action Task Force (FATF), that also bear consequences for the WWFT BES. 

Financial institutions are obligated to implement the risk-based approach in their own business operations. Guidelines, procedures, and measures must be drawn up to limit and control the risks of money laundering and terrorist financing. Furthermore, the compliance function must be further embedded in the business operations. 

A lot of changes have been made to the bill; however, the most important ones are discussed below. 

The first change is in the first article of the Act, which no longer distinguishes between domestic and foreign Politically Prominent Persons (PEPs). This is in accordance with the definitions of the WWFT applicable in the Netherlands, as well as the National Ordinances in Curacao and Sint Maarten. The new definition offers service providers the opportunity to make an independent assessment of whether there is a PEP. 

In Article 1.1, changes were made to the definition of “liquid assets”, previously named as “money”, to create a new definition of this term. 

Article 1.5 expands the group with which the supervisory authorities can exchange data to include Tax and Customs Administration, the Fiscal Intelligence and Investigation Service, the Royal Netherlands Military Police, the Dutch Caribbean Police Force, the Hotline, and the Public Prosecution Service. 

FATF Recommendation 18 requires financial institutions to implement programs to prevent money laundering and terrorist financing. These programs include internal protocols, procedures, and controls to ensure regulatory compliance and ensure appropriate screening of employees. This will be included in the new articles (Art. 1.9 to Art. 1.14) by means of a new regulation. 

Replacing the former term, “risk-based and adequate measures” with “reasonable measures” (Art. 2.2) makes it clear that a service provider must always try to identify a customer or ultimate beneficial owner. It is also clarified that a service provider must always tailor customer due diligence to risk sensitivity.

Considering the risk-based approach of the new FATF recommendations, Article 2.8 allows service providers to perform simplified customer due diligence if a business relationship or transaction involves low risk. 

The general exception from the current Article 2.9 may therefore be dropped.

According to the FATF Recommendation 31, countries must ensure that authorities have access to all necessary documents and information and that authorities can request this information from the Hotline. Article 3.2, part g, fulfills this as it concerns the provision of information to the supervisory authorities, the Public Prosecution Service, and investigating officers.

Changes made to Article 3.6 make it explicit that the hotline is authorized to request further data or information. The service provider is therefore obliged to provide this information in writing within a period set by the Hotline, or orally in the event of an emergency.

The new Article 3.10 clarifies the relationship between the duty to report and the duty of confidentiality of civil-law notaries and junior civil-law notaries. In Article 5.7 a third paragraph is added. This paragraph clarifies the relationship between the duty of confidentiality for civil-law notaries and the duty to report. This means that civil-law notaries are obliged to allow the supervisor and the supervisor’s designated persons to inspect the civil-law notary’s records and documents relating to the activities designated by the WWFT BES. By adding Article 5.7 to the principles in Articles 5.10 and 5.11, it is possible to punish refusal to cooperate with the supervisor with a fine or an order subject to periodic penalty payments can be imposed.

These are only a few of the changes that will come into effect on July 1, 2021. We strongly advise you to look into the amendments and if applicable apply these as soon as possible. This in order to avoid any consequences for your business.