Despite the improvements, the Personal Data Authority is still critical of the "Money Laundering Plan" bill. The privacy watchdog fears that the bill will lead to mass surveillance, exclusion and discrimination. Furthermore, it warns of the danger of function creep.
So writes the regulator in a position paper (1), which has been handed to the House of Representatives. On Thursday, the House will discuss the bill.
Last October, Finance Minister Sigrid Kaag sent the bill "Money Laundering Action Plan" to the House of Representatives. The proposal contains a package of measures to combat money laundering. Among other things, the minister wants a ban on cash payments above three thousand euros and for financial institutions to cooperate more closely by exchanging information on money laundering with each other.
The most controversial measure in the bill is to centrally collect and analyze financial transactions of all Dutch citizens. "Criminals often deposit sums of money at different banks in order to stay under the radar. With joint transaction monitoring, banks can better identify unusual transaction patterns. The expectation is that this will lead to better 'hits' and thus contribute to a more effective approach to money laundering," Kaag said.
The Personal Data Authority was not enthusiastic about the bill. According to the regulator, in practice it amounts to a "banking dragnet" (2) and affects the fundamental rights of Dutch citizens. "People are innocent until proven guilty. By keeping everyone under surveillance by default, this fundamental principle of the rule of law is undermined," said AP board member Katja Mur.
In doing so, the regulator, to a greater or lesser extent, instructed Minister Kaag to redo her homework. She made several improvements to the original bill. The proposal will be debated in the House of Representatives on Thursday, Jan. 26.
The Personal Data Authority has seen the amended proposal and is still not happy with the changes. In the eyes of the regulator, the main objections of the earlier opinion still stand.
"These objections and concerns are serious in nature: the AP sees a form of mass surveillance that may lead to exclusion (people become unbankable) and where risks of discrimination may arise," the regulator wrote in a letter to the House of Representatives. Moreover, the bill offers no legal protection for citizens. The courts are the only way to prevent exclusion from payment transactions.
"The processing of special personal data, especially those on race, ethnicity and religion, entails special risks that increase the risk of unjustified discrimination. These risks are not recognized and addressed in the explanatory memorandum to the bill," the Personal Data Authority writes.
The privacy watchdog believes the bill violates the principle of proportionality. "The proposal crosses a threshold of indiscriminate mass surveillance by private parties. The legislator must realize that this goes down the path of full central control of payment transactions," the regulator said. This is a violation of fundamental rights and civil liberties and allows third parties to closely monitor all citizens.
The Personal Data Authority stresses that the bill violates the Charter of Fundamental Rights of the European Union. "Only a small percentage of the total payment traffic is directly or indirectly linked to money laundering. A tool aimed at detecting relatively few cases will be used against anything and everything. It is thus equivalent to 'preventively searching' every payment and then sharing this information with others."
Furthermore, the regulator points out that the current anti-money laundering regulations from Brussels infringe on the privacy (3) of citizens and are at odds with the Charter. "The present bill contains national choices that add to this," the Personal Data Authority warns.
Finally, the regulator is concerned that the measures in the bill will lead to function creep. That means technology will be used for other purposes than what it was originally developed for. That cannot be ruled out with the proposal, according to the privacy watchdog. "The path taken now is decisive for the future," the Personal Data Authority warns.
https://www.tweedekamer.nl/kamerstukken/detail?id=2023Z00912&did=2023D02245
https://www.vpngids.nl/nieuws/ap-waarschuwt-voor-bancair-sleepnet/
https://www.vpngids.nl/privacy/
