Fewer, but more extensive BFT investigations at notaries

The Financial Supervision Office (BFT) conducted 82 investigations into notarial practices last year. This is slightly fewer than the previous year. However, the investigations were more extensive than in previous years. This is evident from the office's annual report.

The number of people involved in the investigations—both civil-law notaries and bailiffs—was higher. To ensure compliance with the Money Laundering and Terrorism Financing (Prevention) Act (Wwft), the BFT conducted 48 special investigations and 28 written investigations.

Warning letters
These investigations resulted in various enforcement measures. For example, 97 civil-law notaries received warning letters, the BFT conducted eight enforcement interviews, and disciplinary complaints were filed 15 times. In addition, 14 civil-law notaries received fines for violating the Money Laundering and Terrorist Financing (Prevention) Act (Wwft).

Gatekeeper role
According to the annual report (pdf, 3.72 MB), the notarial profession is also more aware of its role as gatekeeper. According to the BFT, this role does not mean a notary can never make a mistake or error. Therefore, the BFT regularly consults with gatekeepers. If a notary later discovers they have made a mistake, they can always report it. It is better to correct a mistake than to continue to insist that no mistakes were made, according to the BFT.

Transactions
Last year, the BFT (Financial Supervision and Finance Commission) paid extra attention to the establishment of legal entities and share transfers. Civil-law notaries must avoid becoming involved in transactions that could be related to money laundering and terrorist financing. The disciplinary court confirmed this last year. For example, civil-law notaries must refuse services if there is too much uncertainty about the nature and necessity of a transaction.

Third-party accounts
Furthermore, it appears that the balance in escrow accounts held by notaries has risen significantly. At the end of 2020, it stood at €8.3 billion. This is 48 percent more than at the end of 2019, when it stood at €5.6 billion. Financially, 2020 was therefore a good year for the notary profession. Most notary offices were exceptionally busy, with many deeds executed, particularly in the fourth quarter. Nevertheless, some offices are experiencing a custody deficit. In most cases, these are different offices. Due to custody deficits, several notaries were removed from office at the beginning of this year. These cases were initiated last year by the Financial Supervision Act (BFT).

High risk
At the end of 2020, the BFT considered 30 notary offices to be at increased risk, 9 of which were due to their quality or integrity. These offices are being monitored more closely by the BFT. This may require them to submit additional data, such as weekly (custody) statements. At the end of 2019, 37 notary offices were still considered at increased risk.

Further development of BFT
Meanwhile, the BFT has also been working on its own further development. In recent years, steps have been taken in the areas of data-driven working, experimenting with alternative methods of (preventive) supervisory intervention, and collaborating with stakeholders such as the Royal Dutch Association of Civil-Law Notaries (KNB). According to the supervisory body, this provides a solid foundation for making supervision more relevant and impactful for the supervised professional groups.