The Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft) and the Trust Office Supervision Act 2018 (Wtt) have been specifically developed to combat money laundering and terrorist financing. Trust offices play a crucial role in complying with these laws, particularly because they provide services to clients with complex ownership structures. A key instrument for ensuring compliance is the Wtt audits, independent assessments that provide insight into the extent to which trust offices adhere to the Wwft and Wtt.
The Wtt establishes a strict framework for client due diligence, with a special emphasis on identifying the Ultimate Beneficial Owner (UBO). Trust offices are supervised by the Dutch Central Bank (DNB), which conducts regular audits to verify compliance with their legal obligations. Additionally, Holland Quaestor provides guidelines and support to trust offices to help them navigate the complex regulations.
This article provides an in-depth look at our approach to a Wtt audit, based on best practices and guidelines from both the Dutch Central Bank (DNB) and Holland Quaestor (HQ).
Good Practices and Recommendations for Trust Offices
DNB and HQ emphasize the importance of clear procedures and documentation. They advise trust offices to:
- Maintain service files: Keep detailed records of all documentation and substantiation related to client due diligence, the target company, and UBO identification.
- Conduct regular updates: Regularly update procedures and guidelines to comply with the latest laws and regulations.
- Establish a clear link between the Systematic Integrity Risk Analysis (SIRA) and the policies, procedures, and practices during client due diligence.
- Invest in training and education: Continuously invest in the training and education of staff to keep them informed about the latest compliance requirements.
Why conduct a Wtt Audit?
There are several reasons why a trust office should undergo a Wtt audit:
- Compliance with laws and regulations: Wtt audits help trust offices meet the complex requirements of the Wwft and Wtt. Timely identification of non-compliance can prevent significant fines and remediation efforts.
- Risk assessment and management: Wtt audits can identify weaknesses in a trust office’s internal control processes, helping them better manage risks related to money laundering and terrorist financing.
- Strengthening internal governance: Wtt audits can lead to improvements in the internal governance of a trust office, enhancing the confidence of clients and regulators.
Who can conduct a Wtt Audit?
Wtt audits may only be conducted by qualified and independent auditors who possess the necessary knowledge and experience in the Wwft, Wtt, and the trust sector.
Wtt Audit approach
At Projective Group, we conduct the Wtt audit in accordance with the guidelines of the Wtt and Btt 2018 and the guidelines of HQ. Our audit approach focuses on the effectiveness of the organizational structure, client due diligence (service files), and the compliance function. We consider the specific risks and complexity of your trust office.
Step-by-Step Audit Process
- Prepare Audit Charter: This document outlines the objectives, powers, and responsibilities of the audit function. If not already in place, the charter is prepared in collaboration with the management of the trust office and approved by the board.
- Risk Profile and Self-Assessment: A current risk profile forms the basis for the audit. Management receives a self-assessment form to prepare for an efficient audit. The auditor then assesses the risk profile of the trust office, including the client portfolio, geographic location, and the products and services used.
- Audit Plan: The annual audit plan outlines the standards and tasks the auditor will perform. This plan is based on the risk profile and approved by the board.
- Conducting the Audit: The audit includes interviews, document analysis, and sampling of client files. We use a risk-based approach to determine the depth and frequency of audit activities. At a minimum, the audit includes:
- Evaluation of internal control processes: The auditor evaluates the internal control processes of the trust office, including client due diligence, transaction monitoring, and reporting.
- Compliance tests: The auditor conducts substantive tests to verify that the trust office complies with the Wwft and Wtt.
- Reporting and Follow-Up: Audit findings are reported to management. Any deficiencies and improvement points are discussed and followed up. The report includes concrete recommendations to optimize compliance and process effectiveness.
Why choose Projective Group for your Wtt Audit?
Our audit team consists of expert auditors and colleagues with years of experience in the financial sector, the trust sector, regulators, and an in-depth knowledge of relevant regulations. Our auditors are registered with recognised professional organisations. We not only have expertise in auditing but also in the trust sector, particularly the complexity of client due diligence. Our aim is to provide your organisation with as much added value as possible by not only reporting results but also offering concrete and pragmatic advice, incorporating the latest insights from DNB.
We understand the challenges trust offices face in complying with the Wtt. Our approach is pragmatic and focused on providing concrete solutions. We offer:
- Independent and Reliable Audits: Our audits are conducted by independent professionals who have no operational responsibilities within your organisation.
- Clear and Up-to-Date Reports: Our reports are clear and contain concrete recommendations to improve your compliance.
If desired, a separate team from Projective Group can assist you in implementing the necessary improvements to your processes, service files, and governance.
Conclusion
Wtt audits are essential for responsible management or boards to ensure compliance with laws and regulations within the organisation. They help prevent surprises, sanctions, and similar issues by intervening where necessary. With our audit services, your organisation gains certainty about where it is performing well and insight into where it needs improvement. The involvement of individuals with extensive trust experience (both from the trust sector and the regulator) ensures that we can further assist your organisation with concrete and practical advice.
For more information on how we can support your trust office in complying with the Wtt, visit our website or contact us directly.
