De Nederlandsche Bank publishes irrevocable instruction requiring Erez Corporate Service to remediate AML gatekeeper shortcomings

De Nederlandsche Bank (DNB) has published its instruction to Erez Corporate Service B.V. after the enforcement decision became irrevocable, following unsuccessful objection and court proceedings. The measure addresses failures by the trust office to meet legal gatekeeper obligations, including customer due diligence, a systematic integrity risk assessment (SIRA), and elements of its compliance and assurance framework. Examinations found insufficiently in-depth customer due diligence in all reviewed files, including weaknesses in assessing integrity risk profiles, establishing the origin of object company assets and the ultimate beneficial owner’s asset position, setting transaction profiles, performing ongoing monitoring, and substantiating the purpose of structures. DNB also found the absence of a risk-based compliance programme, a SIRA that was too generic to Erez’s circumstances, a procedures manual that did not adequately cover compliance with the Sanctions Act and related regulations, and an audit function that was not effectively exercised in 2016 and 2017, with no audit performed for calendar year 2018. The instruction required Erez to bring all customer files into compliance by 3 December 2021 at the latest (extended to 28 February 2022), to have a risk-based compliance programme, robust SIRA and robust procedures manual by 3 September 2021 (extended to 3 December 2021), and to ensure an independently exercised audit function by 3 September 2021 as well as complete an audit for the 2020 calendar year by 3 October 2021. DNB rejected Erez’s objection on 31 January 2022 and a court dismissed Erez’s appeal on 7 October 2024. With the statutory further-appeal period expired and no further appeal lodged, DNB has published the instruction and the related decisions.