The Sanctions Act 1977 is a pivotal legal framework that mandates (financial) institutions to ensure integrity in operations to combat undesirable trade, money laundering, and terrorism. This act is often linked with the Anti-Money Laundering and Counter-Terrorist Financing Act (Wwft) due to its shared emphasis on compliance and integrity.
The Sanctions Act 1977 enforces the application of national and international sanction measures. These measures are often in response to violations of international law or human rights, targeting regimes not adhering to the rule of law and democratic principles.
Sanctions can target countries, individuals, or organizations and vary from asset freezes to restrictions on financial services. Sanctions lists, including those from the US, EU, NL, and the UN, are regularly updated, necessitating continuous monitoring and application in client relationships.
The Sanctions Act 1977 applies not only to banks and financial companies but also to natural persons, legal entities, or companies engaging in professional activities. Its scope extends beyond supervised financial institutions.
Compliance involves avoiding business with parties on sanctions lists and setting up an administrative organization with internal control measures. Institutions must integrate the Sanctions Act and internal sanctions policy into appropriate procedures and screening processes, considering all sanctioned countries.
Screening involves checking client files against EU and Dutch sanctions lists, often supplemented by US lists (OFAC) and other relevant foreign lists. This screening is conducted at client acceptance, periodic review, and event-driven review.
If a client appears on the sanctions lists, institutions must notify the regulator and freeze any assets as required by the Sanctions Act 1977.
The Sanctions Act 1977 is a Dutch law that enforces compliance with national and international sanctions to prevent undesirable trade, money laundering and terrorism financing.
The Act applies to banks, financial companies and any professional entities that could potentially engage in transactions subject to sanctions.
Sanction measures range from freezing assets to prohibiting the provision of certain financial services to listed countries, individuals or organizations.
Institutions ensure compliance by screening client files against relevant sanctions lists, avoiding business with listed parties and implementing effective internal controls and procedures.
Institutions must report the match to the regulator and take necessary actions, such as freezing assets, as required under the Sanctions Act.