The collaborative effort of major Dutch banks to collectively monitor transactions for fraudulent activities and money laundering is facing backlash from Brussels. Transaction Monitoring Netherlands is not in compliance with the new European money laundering regulations. The Council of State has deemed it a violation of privacy rights.
Under the updated European money laundering laws, joint investigations into money laundering are only permitted under strict conditions, as reported by Het Financieele Dagblad in response to a Parliamentary letter from outgoing Minister of Finance Steven van Weyenberg. The Dutch Data Protection Authority has previously criticized the joint transaction monitoring by Dutch banks, labeling it a 'banking dragnet' and highlighting the potential risks associated with a centralized database for transaction monitoring. This could result in excessive surveillance by financial institutions. The Council of State has also expressed concerns about the invasion of privacy.
According to the pending European legislation, banks are prohibited from conducting collaborative investigations on customers without valid reasons. Data sharing is only permissible for customers deemed to be high-risk individuals.
Transaction Monitoring Netherlands involves a partnership among several prominent Dutch banks, such as Rabobank, ABN AMRO, and ING. The proposed system aimed to monitor transactions exceeding 100 euros made by all customers. The specific implications of the new European money laundering regulations on the joint monitoring initiative by Dutch banks are yet to be fully understood.
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