Europe’s oligarchs and oligarchs in the Netherlands | AML, CFT

The Committee on Budgetary Control of the European Parliament on 10 November 2021 published a draft report with the catchy title “fight against oligarch structures, protection of EU funds from fraud and conflict of interest“.

In the draft report the term ‘oligarch’ is used for all influential people (markup by me):

Oligarch structures
1. Notes that, in today’s society, ‘oligarchy’ refers to any small, cohesive class or group that is in a position to make decisions or command others in either political or non-political contexts or rule a political community in its own interests, without regard for the rule of law and other democratic rules and sometimes in infringement of their fundamental principles; notes that in an oligarchy, political elites misdirect public funds from the EU or national budgets to serve their private interest and often rely on businesspeople who act on their behalf in a structure where real beneficiaries and beneficial owners are usually concealed; notes that the extreme concentration of political and financial elites can lead to state capture;
2. Adds that in the current EU political context, the term ‘oligarchy’ is used as a way of pointing out the influence of the wealthy and powerful in politics and government, and that of the economic, financial and industrial actors who are able to exercise influence that is typically used to benefit the few at the expense of the many; highlights that members of national governments and other holders of political positions are part of the oligarchy in some Member States and have actively sought to use EU funds to benefit themselves financially;

According to the draft the occurrence of oligarchic structures has reached unprecedented levels in the EU in recent years (nr. 16). A peculiar statement, is there any study that can be used to support this statement?

Who are the Dutch oligarchs?
It will be interesting to see who are the oligarchs in the Netherlands. Can we find them among the old ‘regentenfamilies‘, like the Donners and the Brenninkmeijers? Or are they not oligarchs because they respect fundamental principles?
Or should we look at those involved in the management of large influential companies?
Are there indications that there are Dutch oligarchs with relations to criminal groups?

If there are oligarchs in the Netherlands, why are they not considered to be ‘politically exposed persons‘ (PEPs) under AML/CFT-legislation, instead of the hard-working decent people who now are now supposed to be high risk?

A lot of questions and no answers.

Final remark
Perhaps this parliamentary document should be considered only as a political marketing statement and can be put aside further. If it were more than that, I am not impressed with the way the term ‘oligarch’ is handled and expect more from the members of the europarliament.

 

More information:

Report:

Politically exposed persons in AML/CFT:

  • PEPs in AMLD4: article 3 (9), (10) and (11), see below.
  • List of Dutch PEPs, considered to be a high risk of AML/CFT.

Read also the blog by Ewoud Sanders (Dutch), Zijn er ook niet-Russische oligarchen? (Are there any non-Russian oligarchs?). Introduction (machinetranslation):

Is it difficult to become an oligarch? Not particularly. The first thing you need is a perverse amount of money. That you have earned partly through corruption and on which you, for example with the help of very expensive Dutch lawyers, pay little or no tax. Then, you spend most of that money on things for yourself. Very important is a yacht that is bigger than that of your fellow oligarchs, because everyone must be able to see that you have the biggest. Then buy a colossal building in Londongrad. Put a few extremely expensive cars in front of it – preferably gold ones.
You see: a child can do the washing.

 

Paragraph on oligarchs in the draft report of 2 March 2022:

Oligarch structures
1. Notes that, in today’s society, ‘oligarchy’ refers to any small, cohesive class or group that is in a position to make decisions or command others in either political or non- political contexts or rule a political community in its own interests, without regard for the rule of law and other democratic rules and sometimes in infringement of their fundamental principles; notes that in an oligarchy, political elites misdirect public funds from the EU or national budgets to serve their private interest and often rely on businesspeople who act on their behalf in a structure where real beneficiaries and beneficial owners are usually concealed; notes that the extreme concentration of political and financial elites can lead to state capture;
2. Adds that in the current EU political context, the term ‘oligarchy’ is used as a way of pointing out the influence of the wealthy and powerful in politics and government, and that of the economic, financial and industrial actors who are able to exercise influence that is typically used to benefit the few at the expense of the many; highlights that members of national governments and other holders of political positions are part of the oligarchy in some Member States and have actively sought to use EU funds to benefit themselves financially;
3. Notes with particular concern that the occurrence of such oligarchic groups, which do not refrain from using government tools or criminal practices, or from supporting criminal groups, has reached an unprecedented magnitude in the past several years; notes with extreme concern that politically connected oligarch networks can capture national media markets and interfere with the workings of democratic public spheres;
4. Is concerned that oligarchic systems are often connected to widespread corruption, tight control over media and a judicial system which is not independent from the oligarchs themselves; emphasises that, in order to protect themselves, oligarchic groups seek to gain control over the media and the judiciary so as to avoid media exposure of possible criminal activities and prosecution;
5. Recalls that Parliament’s position on corruption is that it not only seriously harms the Union’s financial interests but also poses a threat to democracy, fundamental rights and the rule of law; is worried by the detrimental impact of corruption on citizens’ trust in institutions;
6. Considers that strong and effective anti-corruption policies and bodies, as well as control systems and an independent judiciary, ensuring the effective functioning of the rule of law, promoting competition, enhancing transparency and assuring the functional implementation of public procurement rules and free access to markets are fundamental to prevent oligarchs from seizing control of the economy and financial markets, which would result in them self-reinforcing to an even greater degree; insists that the EU promote transparency in the spending of EU and national funds by carrying out more efficient data collection and by strengthening the rules related to it, especially as regards final beneficiaries and beneficial owners, and that it monitor closely and enforce the proper implementation of such rules; calls on the Commission, in this context, to step up its efforts and reinforce its cooperation with the Member States in this direction;

 

PEPs in AMLD4
Consolidated version of 30 June 2021:

(9) ‘politically exposed person’ means a natural person who is or who has been entrusted with prominent public functions and includes the following:

(a) heads of State, heads of government, ministers and deputy or assistant ministers;
(b) members of parliament or of similar legislative bodies;
(c) members of the governing bodies of political parties;
(d) members of supreme courts, of constitutional courts or of other high-level judicial bodies, the decisions of which are not subject to further appeal, except in exceptional circumstances;
(e) members of courts of auditors or of the boards of central banks;
(f) ambassadors, chargés d’affaires and high-ranking officers in the armed forces;
(g) members of the administrative, management or supervisory bodies of State-owned enterprises;
(h) directors, deputy directors and members of the board or equivalent function of an international organisation.

No public function referred to in points (a) to (h) shall be understood as covering middle-ranking or more junior officials;

(10) ‘family members’ includes the following:

(a) the spouse, or a person considered to be equivalent to a spouse, of a politically exposed person;
(b) the children and their spouses, or persons considered to be equivalent to a spouse, of a politically exposed person;
(c) the parents of a politically exposed person;

(11) ‘persons known to be close associates’ means:

(a) natural persons who are known to have joint beneficial ownership of legal entities or legal arrangements, or any other close business relations, with a politically exposed person;
(b) natural persons who have sole beneficial ownership of a legal entity or legal arrangement which is known to have been set up for the de facto benefit of a politically exposed person.

Over Ellen Timmer, advocaat ondernemingsrecht @Pellicaan

Verbonden aan Pellicaan Advocaten, http://www.pellicaan.nl/, kantoor Rotterdam, telefoon 088-6272287, fax 088-6272280, e-mail ellen.timmer@pellicaan.nl ||| Weblogs: algemeen: https://ellentimmer.com/ || modernisering ondernemingsrecht: http://flexbv.wordpress.com/ ||| Motto: goede bedoelingen rechtvaardigen geen slechte regels
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Een reactie op Europe’s oligarchs and oligarchs in the Netherlands | AML, CFT

  1. r grootveld zegt:

    Deze definitie lijkt mij zeker breder dan waarschijnlijk bedoeld. Er zullen ongetwijfeld propagandistische motieven aan ten grondslag liggen. Daar heb je ze weer, die ellendige russen!

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