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On June 4, 2026, the Dutch Authority for the Financial Markets (AFM) published guidance addressing how financial enterprises should conduct client due diligence when dealing with politically exposed persons (PEPs). The AFM's research revealed that many financial enterprises fail to apply tailored approaches to PEP assessments, despite each PEP presenting distinct risk profiles. The AFM identified several key concerns. Financial enterprises often apply generic measures without evaluating individual PEP-specific risks, and some use nationality as a standalone criterion in risk assessments, which risks unjustified discrimination. The AFM also found inconsistent definitions and applications of what constitutes a PEP across enterprises, with some using incorrect or outdated screening lists. Additionally, while enterprises frequently have policies in place, implementation often deviates from these policies, and documentation of client due diligence steps is frequently inadequate. To address these issues, the AFM recommends that enterprises adopt tailored risk assessments recognising that not all PEPs present high risk; establish unified definitions and consistent application of PEP criteria, including understanding that PEPs encompass individuals with prominent political functions, their family members, and close business associates; ensure outsourcing and automated tools support rather than replace enterprise responsibility for verifying correct PEP identification, particularly as PEP status may change following elections; and invest in staff training and awareness programmes tailored to specific organisational roles and practical application. The guidance stems from findings in the Financial Action Task Force (FATF) 2022 evaluation and is based on data from periodic questionnaires and thematic examinations of investment enterprises, investment institutions, and financial service providers regarding anti-money laundering, counter-terrorism financing, and sanctions compliance policies. REFERENCES: Dutch Authority for the Financial Markets (AFM) news article: https://www.afm.nl/nl-nl/nieuws/2026/juni/aandacht-cliëntenonderzoek-peps

On June 4, 2026, the Dutch Authority for the Financial Markets (AFM) published guidance addressing how financial enterprises should conduct client due diligence when dealing with politically exposed persons (PEPs). The AFM conducted a thematic investigation into the handling of PEPs under the Money Laundering and Terrorist Financing (Prevention) Act (Wwft) which revealed that many financial institutions fail to apply tailored approaches to PEP assessments, despite each PEP presenting distinct risk profiles. The AFM identified several key concerns, such as: Institutions often applying generic measures without evaluating individual PEP-specific risks, and some using nationality as a standalone criterion in risk assessments, which risks unjustified discrimination. Inconsistent definitions and applications of what constitutes a PEP within institutions. The implementation often deviates from PEP policies that are in place, and documentation of client due diligence steps are frequently inadequate. To address these issues, the AFM presents good practices that institutions should adopt, including: Establishing a risk-based approach to the risk classification and assessment of a PEP. Having clearly established definitions. Establishing clear responsibilities among staff and outsourced tools. Investing in training and awareness of employees involved in conducting customer due diligence. Ensuring complete and traceable documentation used for customer due diligence. The guidance stems from findings in the Financial Action Task Force's (FATF) 2022 evaluation .

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Netherlands' Authority for the Financial Markets Issues Guidance on Politically Exposed Persons Client Due Diligence

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Dutch Authority for the Financial Markets Issues Guidance on Politically Exposed Persons Client Due Diligence