International Law

DUTCH CARIBBEAN ANTI-MONEY-LAUNDERING REGULATIONS (II)

By Karel.Frielink

Filing MOT report no blanket protection

A provider of financial services, e.g. a bank, has the obligation under Section 11 of the MOT (National Ordinance Penalization Money Laundering) to report to the Financial Intelligence Unit (FIU), without delay, any unusual transaction made or proposed. Unusual transactions are described in the Ministerial Decree Indicators Unusual Transactions.

Suspected money-laundering transactions are, e.g., transactions non-typical of a client or transactions where there is otherwise cause to presume that they may relate to money laundering or terrorist financing. Such transactions, including proposed transactions, should be reported. The MOT also allows for permissive filings by institutions in connection with other unusual activity.

A report to the FIU must include, amongst others things, the nature, time and place of the transactions and the circumstances by which the transactions are considered unusual. A bank is, according the MOT, bound to secrecy in respect of such reporting. In such cases a bank is therefore not allowed to disclose to the client that is has reported pursuant to the MOT.

Furthermore, banks that acts in compliance with the obligation to report will be given a degree of criminal indemnity. The reason for this criminal indemnity is the principle of ‘nemo tenetur‘ (nemo tenetur seipsum accusare, no man is bound to accuse himself). Section 14 MOT states that data or information, furnished in accordance with the report, may not serve as a basis for, or for purposes of, a criminal investigation or prosecution by reason of suspicion of, or as proof in respect of, a charge of money laundering or a criminal offence lying at the root thereof by the party having furnished such data or information. In other words, the bank cannot be prosecuted for money-laundering on the basis of the information or data reported by it.

However, this does not mean that a bank can create blanket protection against criminal liability by filing a MOT report. The indemnity that Section 14 MOT provides is extremely limited and narrow in scope. Firstly, a MOT report will not provide protection with respect to transactions undertaken after its filing. Future transactions do not fall under the scope of the indemnification provided for by the filing of a report. Secondly, the safe-harbor only applies in connection with prosecution for money-laundering and the root offences thereof. The same set of transactions could not only give rise to money laundering charges but also to criminal charges under other laws. Third, even if a bank correctly files a MOT report, the Public Prosecutions Office that is faced with proof by other channels of information than the report by the bank can still prosecute the bank for money laundering.

Karel Frielink
Attorney (Lawyer) / Partner

Full post as published by Karel's Legal Blog on May 03, 2008 (boomark / email).