LVMH limits to cash payments in the Netherlands

The relevant legislation in the Netherlands is the law to prevent money laundering and terrorist financing (in Dutch: 'Wet ter voorkoming van witwassen en financieren van terrorisme') (hereafter: 'Wwft'). This is the Dutch Law based upon the Third European Anti-money Laundering Directive (Directive 2005/60/EC).

Yes.

Currently the bill on the Plan of Action on Money Laundering (in Dutch: 'Wetsvoorstel Plan van Aanpak Witwassen') (hereafter: 'Bill') has been submitted to the Council of State (in Dutch: 'Raad van State'). This Bill introduces changes regarding cash payments and money laundering detection powers.

If the Bill comes into force, the maximum amount of cash a customer may use in the Netherlands will be EUR 3000. Until then, the limit for paying with cash in the Netherlands is EUR 10,000. 

On 27 January 2019, the Eurosystem (European Central Bank) decided that it would no longer put EUR 500 banknotes into circulation. Therefore, Dutch banks no longer issue EUR 500 banknotes. Furthermore, one should be aware that the Bill will include a ban on the acceptance of EUR 500 banknotes.

The parliamentary records of the Bill show that the Dutch government intends that partial and/or related cash payments which exceed the maximum amount of EUR 3,000 will be forbidden. How this will be carried out in practice and what will constitute partial and/or related payment is unclear. The only definition that is given is 'by means of one or more actions that are related'.

Yes.

At present, shop assistants need to report to a higher authority when the maximum amount of EUR 10,000 cash payment is exceeded as well as when customers would like to pay with a EUR 500 banknote – so-called unusual transactions. When the Bill becomes law, the duty to report unusual transactions will be more strictly enforced. According to the Bill, shop assistants will need to report unusual transactions for cash payments above EUR 3,000. 

The Financial Intelligence Unit Netherlands ('FIU') is the central institute in the Netherlands responsible for preventing and combating money laundering and terrorist financing. The FIU has entrusted the responsibility for supervision and enforcement to five parties:

1. Authority Financial Markets ('AFM');
2. Dutch Central Bank ('DNB');
3. Office of Financial Oversight ('Bureau Financieel toezicht');
4. Office for Combating Money Laundering and Terrorist Financing ('Bureau Toezicht Wwft');
5. Dean of the Dutch Bar Association ('Deken van advocaten').

According to art. 16 of Wwft, there is a duty to report unusual transactions in the Netherlands. The competent authority to report to is the FIU.  The responsibilities of the client in that respect are laid out in art. 16(2) of Wwft.

The client shall provide the following information to the FIU:

1. The identity of the client, the identity of the beneficial owners and, as far as possible, the identity of the person on whose behalf the transaction is being carried out;
2. The nature and number of the client’s identity document and, insofar as possible, of the other persons referred to under point "a";
3. The nature, time and place of the transaction;
4. The amount, destination and origin of the money, securities, precious metals or other valuables involved in the transaction;
5. The circumstances which see the transaction classified as unusual;
6. A description of the relevant items of great value in a transaction in excess of EUR 10,000;
7. Additional information to be designated by order in council.

The sanctions available to the FIU to make sure that companies comply with the rules of the Wwft, are laid out in articles 28-32 of Wwft. The FIU can give an institution which does not comply with the rules:  

1. a direction to comply with the legislation (art. 28 Wwft);
2. a cease and desist order (art. 29 Wwft);
3. an administrative fine (art. 30 Wwft). 

The FIU can also publish a warning or statement, documenting the violation of the offender (art. 32e Wwft). 

Apart from the changes regarding cash payments, the Bill will also make significant changes regarding data sharing between banks and/or companies with an integrity risk. If the Bill comes into force, banks and/or companies will have more opportunities to share data with each other.