Under the guise of curbing money laundering and combatting terrorist financing, the Netherland’s left-liberal government is looking to pass a law that would force banks to track and trace all transactions over 100 euros. Critics, however, have denounced the law as a far-reaching invasion of citizens’ privacy, with some suggesting that it’s a preparatory step to implement a digital central bank currency.
The bill, spearheaded by Finance Minister Sigrid Kaag (D66), who serves as the co-chair of the Global Action Group at the World Economic Forum (WEF), was submitted to the parliament on October 21st and states that banks may be obliged to monitor nearly all banking activity of Dutch account holders in a centralized database, the Belgian financial news outlet Business AM reports.
Under the newly proposed law, only transactions under 100 euros conducted by consumers are exempt from the system’s monitoring activities.
“Only small payments from consumers to businesses and to other consumers cannot be used for crime detection. This exception does not apply, for example, to accounts of sole proprietorships and general partnerships,” Ellen Timmer, a corporate law attorney who specializes in privacy issues, said.
Timmer, who works for Pellicaan law firm, is among the most vocal critics of the Dutch government’s legislative proposal, arguing that “the Netherlands leads the way in creating opportunities to violate fundamental rights.”
“The government assumes that there is a lot of money laundering by consumers. Or that they even finance terrorism… The risk is that the law opens the door to unprecedented mass surveillance by banks. The Rutte cabinet is playing with constitutional fire, Timmer said during comments given to the Dutch newspaper De Andere Kant.
Timmer’s concerns have been echoed by The Personal Data Authority (AP). In a statement, AP Administrator Katja Mu said:
The proposed monitoring really goes too far. All your payment behavior will soon be collected centrally and monitored with algorithms. All your payment behavior will soon be collected centrally and monitored with algorithms, along with all transactions of all other bank customers in the Netherlands. This poses risks to your privacy. Your payment data will show your whole business. For example, whether you spend money on a political party, religious institution or psychologist.
The Privacy First Foundation, an independent foundation which aims to preserve and promote to privacy, which it regards as a “universal human right and the basis of a free democracy,” warned that, if enacted, the bill could be used as a “banking dragnet” for the Netherlands. The foundation urged members of the public to hold lawmakers accountable for passing any legislation that might violate fundamental rights.
The Council of the State, the Dutch government’s main advisory body, has also issued a public statement voicing its disapproval of the proposed legislation. While the body agrees that money laundering and terrorist financing must be combatted, it clearly opposes the planned means for carrying this out.
In a statement, the advisory body wrote:
Two of the proposed measures result in far-reaching infringements of fundamental rights of citizens and businesses that protect confidential data and privacy. As important as combating money laundering and terrorist financing is, these measures raise the question of whether the end justifies the means. These means go too far in the design of the bill. These include information exchange in joint monitoring of bank transactions and in customer due diligence.”
The news comes after Queen Máxima, who was present at an International Monetary Fund (IMF) meeting in Washington D.C. earlier this month, called for the creation of a Central Bank Digital Currency (CBDC)—and defended CBDCs as instruments of ‘inclusivity.’
