DUTCH LAW PROPOSAL FOR TRUST OFFICES

20/04/2022

The Dutch cabinet is currently working on an emergency law to prohibit services provided by trust offices intended at Russian financial flows. Consequently, there will be business activities or transaction flows which can no longer be run via the Netherlands when there is proof of Russians originated sources or destinations. Further the following are the examples to be expected when the law will become effective:

• A ban on providing trust services to persons and companies that are established in established in the Russian Federation or the Republic of Belarus or have an ultimate beneficial owner (UBO) resident in these countries.
• Trust offices in the Netherlands can no longer facilitate persons and companies established in those countries to set up the establishment, administration, and management of the legal entity.

This proposal was announced in the Government news in the beginning of this month (www.rijksoverheid.nl/actuhttps://www.rijksoverheid.nl/actueel/nieuws/2022/04/01/verbod-op-dienstverlening-door-trustkantoren-gericht-op-russische-geldstromeneel/nieuws/2022/04/01/verbod). Since there is no certainty whether this emergency legislation can be prepared in the short term, the Dutch Finance Minister prefers that the  European Union would regulate the above measurements at European level.

Another topic of the proposed law is to prohibit trust offices to do the following:

• Providing the professional or commercial use of conduit companies by trust offices.
• Providing trust services to clients where high-risk third countries involved on money laundering activities or non-cooperative taxation countries.

The later proposed regulations were already announced last year on 1 July 2021 and among other regulations as a revision to the Trust Offices Supervision Act 2018.

Trust offices in the Netherlands have gone through increasingly tight inspection and examination carried by the Dutch government since the Act first introduced. The research and examination are with the main purpose that the integrity of the trust offices in the Netherlands can be satisfied and guaranteed.

In view of controlling of monitoring client’s transactions, and as mentioned in the Trust Offices Supervision Act 2018, article 35, a trust office shall take reasonable steps to investigate all complex and unusually large transactions and any unusual patterns of transactions that have no clear economic or legitimate purpose and to have an intense control in the entire business relationship with the client in this regard.

 

In case of questions, please feel free to contact NAZALI at: nazali_amsterdam@nazali.com

 

 

Sources:

Antwoord op Kamervragen over het bericht 'Kaag wil extra sancties trustkantoren, grote gevolgen voor Zuidas' | Kamerstuk | Rijksoverheid.nl

Verbod op dienstverlening door trustkantoren gericht op Russische geldstromen | Nieuwsbericht | Rijksoverheid.nl

Wet toezicht trustkantoren 2018 (34.910) - Eerste Kamer der Staten-Generaal

wetten.nl - Regeling - Wet toezicht trustkantoren 2018 - BWBR0041583 (overheid.nl)

 

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