A Dutch court has declared its decision in a case involving a legal entity (firm) accused of failing to comply with the obligation to report unusual transactions as described in the country’s AML/CFT Act (or Wwft) during 2014-15.
The Financial Intelligence Unit (FIU) of the Netherlands found that the entity conducted at least 6 unusual transactions during the concerned period, receiving cash payments of over €25,000 ($29,526). This is a red flag indicator as per the Wwft. As such, this should have led the suspect to promptly report these transactions as suspicious transactions to the FIU. However, the entity did not report them. These suspicious transactions often concerned the sale of various vehicles to a customer in return for cash payments.
In this case, the defendant’s side believed that the failure to report cannot be attributed to the legal person as errors were made not at the administrative level, but at the level of the accountant, a subordinate official. However, the court adjudged that the prompt reporting of unusual transactions is one of the entity’s duties. Therefore, the failure to do so should reasonably be attributed to the entity. It is the social responsibility of companies to identify and report unusual transactions to the FIU to enable further investigations. As such, the court has sentenced the concerned entity to a fine of €40,000 ($47,242). Of this amount, €20,000 ($23,621) is conditional with a probationary period of one year.