- within Law Department Performance and Accounting and Audit topic(s)
The Rotterdam District Court has issued its decision in an appeal against a fine imposed by the Dutch Financial Markets Authority (the "AFM").
Three related fine were initially imposed in 2023 valued at €31,000, €94,000 and €31,000 for a total of €156,000. The fines were for a mixture of compliance failings including, AML, terrorist financing and sanctions. The sanctions compliance failures were a failure to screen customers between 2017 and 2022.
The Claimant, a manager of seven real estate investment funds, appealed against this decision, including (amongst others) on the basis that the fine in relation to sanctions should be struck down because none of the customers were actually subject to sanctions.
The court upheld the fine noting (in machine translation):
"The fact that the AFM's investigation has shown that the clients of the investment institutions ... have not been ... on a sanctions list does not detract from the seriousness of the violations either. This circumstance is not relevant to the legal obligations of [Claimant] as gatekeeper in the investigation of those clients and the source(s) of their funds, in order ... to comply with the Sanctions Law. The assertion that the [Claimant] often knows the clients personally and that the risks were kept to a minimum ... do not detract from this either".
The fine was, however, reduced by 10% (for a revised total of €148,500) because the enforcement proceedings had taken longer than the 2 years permitted under Dutch law.
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