Requirement for pension funds to be on Dutch UBO register criticised

The need for pension funds to be on the Netherlands’ upcoming register for ultimate beneficial owners (UBO) has been criticised by Achmea.

The country is creating a register as required by a European Union directive in order to prevent money laundering and terrorist financing within the financial system. The directive has been adopted by the Netherlands and the requirement will come into effect on 27 September 2020, giving organisations, including pension funds, 18 months to register the information before 27 March 2022.

The register will include information about the people who have control over legal entities, including pension fund directors, despite them having no legal right to the assets. Achmea legal policy adviser, Leo Blom, said that he does not think it is justified for pension funds to have to register UBOs.

“Administrators cannot use the pension fund to launder money or finance terrorism. Unfortunately, the EU directive leaves no room for an exception,” he noted.

He explained that there are no UBOs at pension funds and there is rarely anyone who directly or indirectly has more than 25 per cent of the vote to amend anything within the organisation.

“Pension fund directors do not have that much say. They would only have that with a board with three members or less and that hardly ever happens. However, all directors must be in the UBO register even though they do not have the control of a UBO, so they are actually 'pseudo-UBOs',” he explained.

Pension funds must also have a register listing the pensioners under the new rules. However, Achmea believe that most pension funds will be in a position to easily fulfil this requirement.

“It is not clear why people who receive a smaller benefit should be on a register. The legislator does not explain this. We find this incomprehensible. In our view, such a register of pensioners does not contribute to preventing money laundering and terrorist financing.” Blom stated.

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