Pursuant to the National Ordinance on the Notary Profession and the National Ordinance to Combat Money Laundering and the Financing of Terrorism, the notary is required in certain transactions such as real estate and corporate practice to identify her client and investigate the client’s sources of funds and wealth.

Client due diligence

How extensively the notary should investigate depends on the risks of money laundering or terrorist financing. Circumstances that affect those risks include:

  • Whether the client is a foreigner;
  • Whether the client is active in an industry known to be susceptible to money laundering, or finances with funds related to such an industry;
  • Whether the client, the transaction or the funds used are related to a country known to have a higher risk of money laundering or terrorist financing;
  • Whether the client appears in the media with reports that increase the risk of money laundering or terrorist financing;
  • Whether the service requested from the notary fits the client;
  • Whether the client holds or has held an important political position, thus creating a risk of corruption.

In other words, the notary’s investigation varies from case to case. And under some circumstances the notary must inquire further.

As to what the notary must investigate, this is stated in the National Ordinance to Combat Money Laundering and the Financing of Terrorism. It involves the following components:

  • The identity of the client (and the representative if there is one);
  • The purpose and background of the requested services;
  • Whether representatives are authorized to represent;
  • Whether the client is really acting on his/her own behalf, or actually on behalf of someone else;
  • For financial transactions: where the funds (or other financial resources) being used come from (in order to prevent the use of illegal money);
  • For legal entities and corporations: how the structure (ownership and control) is and who the ultimate beneficial owners (UBOs) are;
  • Whether the client or UBO is a politically exposed person.

Identity of natural persons as clients

Nationals of foreign countries can have their identity verified on the basis of a valid national passport. Nationals of Aruba can be identified through a valid identity card with passport photograph or a valid driving license with passport photograph.

Identity and UBOs of legal entities as clients

The identity of a legal entity as a client, such as an LLC, can be established on the basis of an extract from the relevant trade register. This can be either excerpt in physical form or an excerpt in electronic form requested by the notary. Also, all persons who are the ultimate owner or have control over a legal entity must be known to the notary and have their identity be verified if required. These individuals are also known as UBO’s (=ultimate beneficial owners). Every legal entity has at least at least one UBO, but may also have multiple UBO’s. A UBO is always a natural person. If there is no “real” UBO or if there is some doubt as to whether the identified individual is the UBO, all natural persons belonging to the senior management
of the egal entity are regarded as pseudo UBO’s (e.g. all the statutory directors of an LLC.

Origin of funds

The notary must investigate the origin of funds used in a financial transaction. This also applies if the funds originate from an Aruban bank account. The notary has his own duty of investigation in addition to that of the bank. This duty of investigation also applies to monies that are not paid through the notary’s third-party account (i.e. also in the case of a payment between parties). In addition, this duty of investigation also applies if the transaction is financed by financial means other than money (such as settlement between parties or in kind).