Personal identification and reporting obligations

Personal identification and reporting obligations
On 1 June 2003, two important pieces of legislation, which had previously only been applicable to financial institutions, were extended to apply to civil law notaries, attorneys, estate agents, tax consultants, accountants and others providing services of a financial nature. They are the Disclosure of Unusual Transactions Act (Wet melding ongebruikelijke transacties) and the Personal Identification (Services) Act (Wet identificatie bij dienstverlening). The requirement to report unusual transactions can have consequences in terms of the legal professional privilege (duty of confidentiality) which would normally apply to the notary-client relationship.

Identification
All services which fall under the legislation (i.e. practically all notarial services with the exception of family law and inheritance law) are subject to a strict identification requirement. Clients wishing to use those services must produce valid identification on their first visit, even if they have been known personally to the notary for many years. The notary is not permitted to commence work on the client’s behalf until he/she has seen proof of identity.

A client’s identity can also be formally verified by any of the other professions covered by the Act: attorneys, estate agents, tax consultants, etc. This may be an appropriate solution in cases where the client is unable to produce identification during a visit to the notary, provided he or she has done so on an earlier visit to one of these professionals.

The identity of any interested persons on whose behalf the client visits the notary must also be formally established.
Documents which are accepted as proof of identity are:
- passport
- driving licence
- a document evidencing an alien’s identity, nationality and residence status
- an identity document as defined in the Personal Identification (Services) Act. NB The document must be valid, i.e. must not have expired.

Where instructions are to be given on behalf of a legal entity, that entity must be duly identified, as must the person instructing the notary. A legal entity must be identified by means of a certified extract from the Trade Register kept by the Chamber of Commerce. You are advised to bring all required documents on your first visit to the notary.

Reporting
If the notary has reasonable cause to suspect that the services requested by a client might be used to facilitate money laundering, he or she is required to report the matter to the Office for the Disclosure of Unusual Transactions (MOT). This requirement also applies to proposed transactions which may (or may not) be carried out in the future. By law, the notary is not permitted to inform the client of his intention to make such a report. Of course, clients with nothing to hide have nothing to fear!

In addition to the legal requirements, the notaries’ professional code of conduct prohibits certain types of transaction. For example, a notary is not permitted to accept a cash payment of more than ten thousand euros. Any cash payment in excess of fifteen thousand euros, or even the suggestion of such a payment, must be reported to the Office for the Disclosure of Unusual Transactions.

The reporting requirement does not apply to services which fall entirely within the sphere of family law and/or inheritance law. However, it does apply in cases where suspicions of ‘money-laundering’ practices are raised by information received further to the completion and filing of tax returns, such as inheritance tax returns.

The notary is under no obligation to report any suspicion of (proposed) money-laundering practices on the basis of information received during an initial, introductory interview. In this situation, clients may speak freely. The reporting requirement applies from the moment that the notary actually accepts the client’s instructions and it becomes clear that the services requested fall under the scope of the relevant legislation. The notary is then obliged to report his or her suspicions to the Office for the Disclosure of Unusual Transactions immediately.