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The Dutch government has submitted a new bill that gives banks more opportunities to detect fraud and money laundering. Part of the proposal is the central monitoring of all bank transactions of more than €100, so that banks can exchange information more quickly in the event of suspicious transactions. The government also wants to lower the maximum amount for cash payments, from €10,000 to €3,000 per transaction. This makes it more difficult to pay large amounts with cash. What does this mean for your privacy and for the payment system?
This new Bill was sent to the House of Representatives on 21 October by Minister of Finance Sigrid Kaag. With this new proposal, the government wants to monitor all bank transactions above €100 centrally, so that banks do not have to do double work and it becomes easier to detect fraud and money laundering. In addition to transactions and IBAN numbers, this database will also contain available Citizen Service numbers. By unleashing algorithms on this database, banks can investigate suspicious transactions more effectively.
With this new bill, banks will have more tools to check transactions and thus it will be more difficult to make cash payments. 'It means a breach of the protection and confidentiality of customer data', the Dutch Data Protection Authority writes in an extensive reaction on the bill. 'In essence, it comes down to a banking dragging law.'
Banks are already required to conduct extensive customer due diligence and carry out checks whenever there is a suspicion of money laundering or terrorist financing. Banks are already required to report unusual transactions to the authorities. With this new bill, this principle will be stretched even further, because then all payments above €100 from all customers will be registered by default. According to the Dutch Data Protection Authority, under this new system, an unjustified suspicion could result in customers being excluded from all banks at the same time and therefore losing their access to a payment account.
Critics warn that this legislation could end up being used for other purposes as well. It has already happened that customers have been excluded because of different political and social views, for example. Think of the trucker protests in Canada at the beginning of this year, where the government passed an emergency law requiring all Canadian banks to pay bank accounts of people who had donated money to the protesters. block. And payment service PayPal was recently discredited when it became known that people $2,500 fine for spreading 'misleading information'.
Proponents of this legislation say it is important that banks have the necessary tools to detect money laundering and fraudulent transactions, but critics warn of the risks. For example, that persons and organisations with alternative political views are excluded from the payment system and can therefore no longer participate in economic transactions. They fear that in a world where cash is slowly disappearing, it will become more difficult to live without a bank account. Also, with the proposed monitoring of all bank transactions above €100, the government will get much more information about people's doings, which is seen as a fundamental violation of privacy.
"Good legislation contributes to tackling money laundering without unnecessarily restricting the fundamental rights of all citizens. That is certainly not the case with this proposal. People are innocent until proven guilty. By keeping an eye on everyone by default, this fundamental principle of the rule of law is being called into question.", according to Katja Mur of the Dutch Data Protection Authority. She adds: "In addition, there is a risk of discrimination and exclusion. We have seen before that algorithms can stigmatize people and push them into boxes. The question is whether banks will soon be guided mainly by what a computer tells them."
The plan to also limit cash payments to a maximum of €3,000 is seen as a worrying development by opponents of this legislation. This means that it is no longer possible to make large purchases without being able to register them by banks and end up in a database. In view of the Emergency Financial Transactions Act of 1978 and the Nationalization of private gold ownership in the United States in 1933, that is a very worrying prospect.
Last year, we wrote on Holland Gold about the European proposal for a register to store all the valuable assets of European citizens. register. This should include not only properties in the form of real estate, land and shares, but also assets such as precious metals, cryptocurrencies, jewellery, works of art, cars and boats. According to the European Commission, such a register is necessary to prevent tax evasion and money laundering.
As the Dutch Data Protection Authority concludes, our fundamental rights are increasingly restricted with this new bill. As soon as cash disappears from the streets, citizens and businesses will become even more dependent on banks and governments to participate in the economy. Or from central banks, when central bank digital money will take over the role of coins and banknotes. According to Member of Parliament Mahir Alkaya, it is important that we continue to have a good debate about this, as he recently said in this conversation at Holland Gold.
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