In the future, not-for-profit organizations (NPOs) such as charities, sports clubs and churches will be less affected by bank investigations if the risks of money laundering or terrorist financing are low. This is evident from new guidelines from the Dutch Banking Association (NVB).
In recent years, it has become more difficult for NPOs to do business with banks due to strict customer due diligence, designed to comply with anti-money laundering regulations. Banks hired thousands of extra employees for this.
NPOs are often organized by a foundation or an association. However, these are also attractive legal forms for money laundering. They have limited transparency obligations and, for example, do not always have to publish annual accounts. Due to the intensive customer surveys that many NPOs have to undergo, their administrative burden can increase and it can sometimes take a long time before approval is granted to manage a bank account.
With the new guidelines, banks want to find a better balance: stricter where necessary and more flexible where possible. “If a sports club has a new treasurer, we will no longer scrutinize every little detail of that person before granting access. That way we will not discover major money laundering operations,” says a spokesperson.
The NVB’s new working method identifies factors that can reduce the risk of money laundering. This includes being transparent about finances by publishing annual accounts and having a quality mark that checks and approves charities.
Working in a country with sanctions, on the other hand, is seen as a risk-increasing factor. The NVB hopes that the new working method will enable it to pay more attention to these types of situations.
NVB chairman Medy van der Laan underlines the importance of NPOs in society and announces that the NVB also intends to develop new guidelines for other high-risk sectors, such as sex workers, car companies and crypto companies.
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