full compliance with the sanction check
With RegLab’s screening tool, you always comply with the latest guidelines of the Sanction Legislation. Fully automated, RegLab screens all (inter)national sanctions lists and high-risk country lists.
Here you can read more about the Sanctions Act, sanctions lists and high-risk country lists. Find out how you can conduct and monitor a sanction check without too much fuss.
Periodic checks of your clients are required under the Sanctions Act. This is not about a one-off check when onboarding clients. You should continuously monitor your entire client file for any sanctions. How do you proceed rapidly and effortlessly, without using your own resources?
You want your client file to be screened automatically, without wasting time and energy. Manual monitoring is no fun. The various sanctions lists, including the EU sanctions list, are continuously updated. RegLab helps you address this challenge.
RegLab compares your client file, fully automated, against the latest sanctions lists and high-risk country lists. Not only the client, but also the contact person, UBOs, representatives and their countries of residence are checked. If a person or country appears on one of these lists, you will be notified immediately.
In the legal profession particularly, we see that the dean is becoming increasingly active in encouraging offices to conduct this check. Various offices take out subscriptions to the available lists and manually scrutinise their client files. They know this much: it’s a hell of a job! Allow RegLab to take care of this.
What is the Sanctions Act?
The Sanctions Act was created in 1977 to combat money laundering and terrorism.
Within this Sanctions Act, the Netherlands implements the sanctions that are imposed internationally in the United Nations and European Union. These sanctions are used in response to violations of e.g. international laws or human rights.
The Sanctions Act 1977 must be complied with by banks and financial companies. Natural persons, legal entities or companies acting within the context of their professional activities may also have to deal with the Sanctions Act 1977, including many law firms and tax consultants. The Sanctions Act is therefore not limited to supervised (financial) institutions. You can read more about this Act here.
If your office is subject to this Act, then you should take measures to avoid sanctions. Acting in violation of the sanctions regulations is punishable. It is therefore important that all new and existing clients are identified and verified. You should also check whether there are any sanctions against them, and you should take action if these relations appear on a sanctions list. Not only during the onboarding process, but in fact as long as you are serving this client.
Sanctions Act and the AML?
Offices that are subject to the AML often are also subject to the Sanctions Act. If your office is one of them, then you must check whether a person or organization has been sanctioned. Quite often, the Sanctions Act and the AML are mentioned in the same breath. It is because the Sanctions Act sets requirements to Customer Due Diligence and integrity. Yet there are differences. You can read more about the AML in our Knowledge Centre.
What sanctions lists are there?
Sanctions do not only apply to individuals, but also to countries and organisations. All sanction regulations can be found on the websites of the European Union, United Nations, and the national government. When considering sanctions, you should think of:
- freezing assets
- a ban on making financial resources available
- a prohibition or restriction on the provision of financial services
To find out whether your (potential) client is on a list, use the sanctions lists, including those from the US, UN, NL, and the EU. These sanctions lists, to which you can subscribe, are updated on a regular basis. It is crucial to consult up-to-date sanctions lists and to continuously monitor the current client base. The Dutch sanctions list is still reasonably manageable, but the EU sanctions list is regularly updated. Europe is very active in this regard, which means that individual organisations and individuals regularly undergo changes. This is where the challenge lies in daily practice.
High-risk country lists
There are also high-risk country lists available, showing countries that do not have their AML processes in order, like North Korea and Iran.
Who is supervising the Sanctions Act?
The Sanctions Act obliges offices to report to the supervisor if a client is on any of the sanctions lists. For financial institutions, this role is reserved for the Dutch Central Bank (DNB) and the Netherlands Authority for the Financial Markets (AFM). These two organisations supervise various institutions like (major) banks via the Regulation on Supervision of the Sanctions Act 1977. The Dutch Central Bank mainly assesses whether the measures that have been taken are also adequate.
Sanctions Act: full observance using RegLab’s screening tool
With RegLab you easily comply with the guidelines of the Sanctions Act. Screening and monitoring take place completely automatically, after which you receive notifications in the event of an increased risk. Even if other parties are added or UBOs might change. All sanctions lists and high-risk country lists are included. Updated and complete.
RegLab for complying with the Sanctions Act
- Fully automated screening
- Using current lists
- Screening and monitoring
- Screening all parties
- Automatic notifications
How to proceed when a client is on the sanctions list
The moment a client, or a person involved, shows up on a sanctions list, you must take immediate action. The precise measures depend on the provisions in the sanctions regulation. The nature of the service also plays a role in this regard. You must in any case stop the services immediately and notify the client. The service is prohibited without prior exemption. A possible exemption for the service must be requested from the Ministry of Foreign Trade and Development Cooperation. For other questions about Dutch sanctions legislation, please contact the Dutch Ministry of Finance: email@example.com
What if you fail to observe the AML and Sanctions Act?
Suppose your office does not comply with AML requirements and the Sanctions Act. What are the consequences?
- Supervisors have the power to impose a fine, sanction or periodic penalty payment on a firm if the latter fails to comply with the AML and Sanctions Act. It may also prosecute failure to report. The criminal law route, on facilitating money laundering, is also possible.
- Failure to report an unusual transaction while you are aware of the unusual nature of the transaction may result in fines. Violating the Sanctions Act is an economic offence within the meaning of Article 1, sub 2 of the Economic Offences Act.
The AML and the Sanctions Act still feel very remote for many offices. Nevertheless, we see an increase in the number of audits and fines for non-compliance with the guidelines.