Sanctions have become an increasingly prominent and ever-evolving aspect of financial institutions' regulatory responsibilities. Designed to enforce international law and maintain global security, sanctions come in various forms, including economic, trade, and diplomatic measures. These can target individuals, organisations, or nations and usually involve restrictions on trade, investments, or specific financial transactions. Additionally, export controls regulate the distribution of certain technologies, goods, and services, to ensure they are not misused by sanctioned entities or countries.
The current Dutch regulatory landscape regarding sanctions
Currently, the Dutch regulatory spectrum regarding sanctions compliance revolves around the Sanctions Act (‘Sanctiewet 1977’) and the Regulation on Supervision pursuant to the Sanctions Act 1977 (‘Regeling toezicht Sanctiewet 1977’), issued jointly by the Dutch Central Bank (DNB) and the Dutch Authority for the Financial Markets (AFM) in 2005. This Regulation on Supervision sets out rules for financial institutions to comply with sanctions regulations. Other regulatory requirements or expectations follow from the various available (industry specific) regulatory guidance, good practice and Q&A documentation that is made available to financial institutions.
Developments to the regulatory landscape regarding sanctions are taking effect
A modernisation of the regulatory legislation regarding sanctions in the Netherlands is currently in progress to address the increasing scale and complexity of international sanctions. A first tranche of a new legislative proposal (‘Wetsvoorstel internationale sanctiemaatregelen’) that will replace the Sanctions Act was published for internet consultation in 2024 and is currently being finalised. A second tranche of legislation, that will address among others regulatory requirements relating to client due diligence, is anticipated during the second half of 2025.
On a European level, regulatory requirements relating to sanctions are also increasing. The AML Regulation (AMLR), set to apply from 10 July 2027, among other things, will require financial institutions to take measures relating to compliance with targeted sanctions in their SIRA (firm-wide risk assessment) and their policies and procedures. The European Banking Authority (EBA) has published two guidelines to comply with applicable restrictive measures that will apply from 30 December 2025. Firstly, a guideline for financial institutions, and secondly a guideline specific for payment service providers (PSPs) and crypto-asset service providers (CASPs).
Simultaneously, regulatory bodies are intensifying their sanctions-related oversight efforts. The Dutch Central Bank (DNB), for example, has in recent years started assessing the effectiveness of financial institutions' compliance with sanctions regulations. On another note, the Dutch Ministry of Finance has stated in its spring memorandum (‘Voorjaarsnota 2025’) that it will structurally intensify its efforts to facilitate and reinforce sanctions compliance in the Netherlands, among other things, establishing a central reporting office for sanctions (centraal meldpunt) and funding the continuation of FIOD and customs-related efforts in the sanctions domain.
How financial institutions perform sanctions screening to stay compliant
Financial institutions meet the applicable regulatory requirements among other things through employment of effective sanctions screening practices. These consist of name screening and transaction screening (i.e., transaction monitoring for sanctions purposes). The former involves more effective checks of relations’ names against applicable (inter)national sanctions lists, while the latter focuses on deploying systems to identify and block potential sanctions violations in transactions before they are executed. More information regarding sanctions screening.
Get in touch for more information regarding sanctions compliance and how we can help
Contact us
