The Bottom Line
- Statutes of Limitation Matter: Prosecutors cannot delay indefinitely. The Amsterdam Court of Appeal dismissed several charges against a company because the absolute 12-year statute of limitations for the economic offenses had expired, significantly narrowing the scope of the case.
- Client Due Diligence is Non-Negotiable: Relying on third-party processes, such as bank identity checks or vehicle registration, is not a substitute for conducting your own mandatory Client Due Diligence (CDD) under Dutch Anti-Money Laundering (AML) law. The obligation rests firmly with the institution handling the transaction.
- Corrective Action Can Mitigate Penalties: While the company was found guilty, the court imposed a fully suspended fine. Key factors were the significant time that had passed since the offenses and the compliance improvements the company had implemented.
The Details
This case centered on a Dutch car dealership that accepted multiple large cash payments (ranging from €15,000 to over €100,000) for vehicles between 2013 and 2015. The Public Prosecutor charged the company with violating the Dutch Act on the prevention of money laundering and financing of terrorism (Wwft). The charges included failing to report these unusual cash transactions to the Financial Intelligence Unit (FIU) and failing to conduct the required client due diligence before completing the sales. The Amsterdam Court of Appeal’s ruling provides critical insights for businesses navigating AML obligations.
The court first addressed several procedural defenses. Crucially, it agreed with the defense that some of the alleged offenses were time-barred. Under Dutch law, the economic offenses in question have a six-year statute of limitations, with an absolute limit of twelve years. As the final judgment was delivered in January 2026, any offense committed before January 2014 was ruled inadmissible for prosecution. This decision underscores a fundamental principle: timely prosecution is essential, and significant delays can render even valid claims unenforceable. The court, however, rejected the company’s claim that officials had promised no prosecution if the late reports were filed, finding the evidence for such a promise unconvincing.
The most commercially significant part of the ruling dealt with the company’s client due diligence obligations. The defense argued that because the vehicles were officially registered with the Dutch vehicle authority (RDW) and some payments involved bank transfers, sufficient identification had occurred. The court firmly rejected this logic. It clarified that the Wwft imposes a direct and prior obligation on the company itself to identify its clients. This duty cannot be implicitly outsourced or assumed to be fulfilled by other entities in the transaction chain. The ruling serves as a stark reminder that AML compliance is an active, not a passive, responsibility. The court ultimately convicted the company for failing to conduct client due diligence and failing to report several large transactions that fell within the statutory period. It also found the company guilty of failing to properly store client records in one instance where client due diligence had been performed.
Source: Gerechtshof Amsterdam
