EY Netherlands is fined for insufficient compliance with the Wwft
EY Netherlands has been fined 240,000 euros by EY for deviating from a regulation laid down in Article 16, first paragraph, of the Money Laundering and Terrorist Financing Prevention Act (Wwft), plausible initiation by a legal person, several presumptions, if reports the District Court of Amsterdam in a judgment of 15 December 2022.
The Public Prosecution Service (OM) has taken note of the accountants branch of EY Netherlands, EY Accountants LLP, that one of its clients failed to fully and incompletely report unusual transactions in the period from 2011 to 2014. “These are transactions paid by the customer, and the entities involved with it, to another organization for, among other things, obtaining a 3G and a 4G license on the telecom market in Uzbekistan. The OM is of the opinion that the accountant branch of EY Netherlands has seriously failed in its responsibilities and therefore demands an unconditional fine of 243,000 euros,” said the OM. In the end, the judge gives a fine of 240,000 euros.
Summary fusion
According to the Public Prosecution Service, the accountants of the accountants branch of EY Nederland have done everything possible to classify the payments to an entity of the customer as a non-reportable transaction. “As professionals, the accountants made sure that everything was correct on paper in order not to harm their commercial interests. Only when the FIOD knocked on the door, the SEC started preparing and it was shouted from the front pages, did the accountants branch act from EY reluctantly made a summary report,” said the public prosecutor.
Background to criminal investigation
On December 1, 2016, it was decided for the Public Prosecution Service to start a criminal investigation into non-compliance with the Wwft (Money Laundering and Terrorist Financing Prevention Act) by the accountants branch of EY Netherlands. It concerns the transactions mentioned in this case and some other transactions related to previous bribes. In response to the expert reports, the FIOD has carried out additional investigations.
Corruption with an extremely disruptive effect
“In this case, it is not about a single breach of financial regulation law, which you can make as a company active in the financial sector. It is also not about a system failure in which the reporting institution has set up all processes to comply with the Wwft, but has done so insufficiently. No, this is about systematic evasion, looking away and procrastination by employees at senior level at the accountants branch of EY Netherlands in a concrete case, while the stench of corruption was no longer enjoyable. Corruption with an extremely disruptive effect in countries where the institutions are not yet so strong and precisely because of forms that have no chance to develop further. In fact, these corruption practices are further undermined. A simultaneous report from the accountants branch of EY Nederland could have prevented this,” said the public prosecutor.
Expected more from a reputable firm like the accountant branch of EY Nederland
The Public Prosecution Service endorses the social importance of the accountant’s duty of confidentiality. However, partly in connection with the responsibility of the accountant, the Dutch Association of Accountants formulates a number of basic principles that every accountant must adhere to in the influence of his profession. “A lot more could have been expected from a reputable firm than it has done. Not in the paper of evasive behavior but in taking the lead in exemplary behavior, that was not there at all. The Public Prosecution Service charges this to the accountants branch of EY Netherlands in an aggravating sense,” said the public prosecutor. This means that the Public Prosecution Service has increased the fine category from fourth to fifth with a maximum fine of 81,000 euros. in the end, three transactions were not reported on time. The Public Prosecution Service demanded an unconditional fine of 243,000 euros, i.e. 3x 81,000 euros. The judge has decided that the fine is 240,000 euros.