Previous DNB policy statements may be read to mean that, in the context of sanctions screening, not all relationships must be screened. This is an incorrect conclusion, and DNB will therefore amend the relevant policy statements shortly. In our current enforcement practice, however, we will take into account the expectations that previous policy statements may have raised.
Section 2(2) of the Regulation on Supervision pursuant to the Sanctions Act (Regeling toezicht sanctiewet 1977 – RtSw) stipulates that institutions must set up their internal control structure in such a way as to allow reliable verification of whether the identity of a relationship corresponds to a legal or natural person or entity subject to sanctions. Section 3 of the RtSw stipulates that if an institution discovers that the identity of a relationship corresponds to a legal or natural person or entity subject to sanctions (a so-called "hit"), this must be reported to the supervisory authority without delay. This implies that all relationships must be screened. Screening should take place in a timely manner in order to enable an institution to refuse a transaction or freeze a balance in relevant cases, as required by European sanctions regulations.
However, it is possible to apply a risk-based interpretation to how the screening is carried out and the measures required for conducting the screening, provided this approach is substantiated and documented. This could include a lower frequency of screening or a less intrusive check on the identity of the relationship in situations involving a lower risk of evasion of sanctions.
We will shortly update the following three policy statements. In the meantime, we will add a disclaimer to them:
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