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08 May 2020 / article

AFM investigation into AML/CTF risk management at AIFMs

Pursuant to the Dutch act on the prevention of money laundering and terrorist financing (Wet ter voorkoming van witwassen en financieren van terrorisme), AIFMs are required to determine and assess their risks for money laundering and financing of terrorism (AML/CTF). Further, AIFMs with a so-called retail top up need to prepare and maintain a systematic integrity risk analysis (the SIRA).

The AFM investigated 15 AIFMs that indicated in a previous survey in 2018 that they had an AML/CTF risk assessment or SIRA. The AFM found that the AML/CTF risk assessments and SIRAs were not yet fully in order at almost all the institutions investigated. Therefore, the AFM expects all AIFMs to make their AML/CTF risk assessment and SIRA in order, for example by taking note of the AFM Guidelines on Wwft, Wwft BES and the Sanctions Act and by implementing the principles described therein in the business operations. The AFM also provides recommendations with respect to preparing the AML/CTF risk assessment and SIRA:

  1. The risks identified should not be formulated in a general manner, but should be specific to the nature and activities of the AIFM.
  2. The risk assessment shall take into account all relevant factors, including:
    • the type of client;
    • the type of product, service, transactions;
    • the distribution channel;
    • the countries and geographical areas.
  3. Risks must be assessed realistically and must be substantiated.
  4. The policy must be clear, accessible and simple.
  5. The policy must contain a clear description and assignment of tasks, powers and responsibilities within the AIFM.

Finally, the AFM calls on financial companies to pay extra attention to money laundering and terrorist financing procedures during the coronavirus crisis.

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