The Dutch Data Protection Authority (AP) has strongly criticized the cabinet’s bill for tackling money laundering. In that proposal, banks would be allowed to exchange customer data with each other. According to the privacy watchdog, this opens the door to “unprecedented mass surveillance” of the Dutch. The draft bill from the Ministry of Finance states that the banking transactions of all Dutch account holders will be monitored in a central database using algorithms. “That means a far-reaching breach of the protection and confidentiality of customer data,” the AP writes in an opinion on the bill. “The proposed system essentially amounts to a banking dragnet.” The Council of State had previously expressed similar criticism of the proposal. Banks are pleased that the government wants to provide more options for exchanging data, because they are under great pressure from regulators to track down money launderers and terrorists. Several large banks have been fined millions in recent years for not doing enough to prevent money laundering through their accounts. Banks have to report unusual transactions to the authorities and they believe that by working together this can be done much more effectively and efficiently. Also read this article: DNB wants to focus money laundering approach more on high-risk customers: ‘The pipeline is overcrowded’ ‘Unnecessary curtailment of fundamental rights’ But according to AP director Katja Mur, the system can lead to discrimination and exclusion. “We have seen before that algorithms can stigmatize and pigeonhole people.” If someone is wrongly designated as a risk at one bank, it becomes virtually impossible to get a bank account elsewhere. “Good legislation contributes to tackling money laundering without unnecessarily restricting the fundamental rights of all citizens and that is certainly not the case with this proposal,” Mur said. The Transaction Monitoring Netherlands (TMNL) partnership set up by five major banks dismisses those concerns to the ANP news agency. According to a spokesperson, the personal data in the plans is coded so that they are unrecognizable, but other banks can use those codes to see whether the same customer does business with them. “It is actually not at all for TMNL to do that customer data,” says the spokesperson. “The point is that TMNL returns data about unusual transactions to banks, who can then act as gatekeepers.” The Ministry of Finance may amend the bill after criticism from the Dutch Data Protection Authority and the Council of State, after which the proposal will be sent to the House of Representatives for assessment.
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