A number of Dutch traders have faced challenges in withdrawing money out of their forex trading accounts, and it is a problem that is becoming more related to banking requirements and compliance issues. The banks of the Dutch which are characterized by strong enforcement of financial transparency have increased control over transactions involving forex brokers as a result of the increasing concerns on fraud, money laundering and unregulated offshore. Where a simple withdrawal process used to be, it now presents more intricate processes where the banks put in place more checks that tend to slow down or halt the transfer entirely.
To a large extent, this tightening is a result of the Dutch adherence to the rules of the European Union that fight against illegal financial flows. Banks have been compelled to follow up on the source of funds in a much deeper way, especially where the withdrawals are done using international brokers. In the event that a forex broker is not located in the EU or has not been licensed in accordance with the Dutch Authority to the Financial Markets (AFM), the transactions that are involved in the process tend to raise red flags on the banking system. Consequently, most Dutch businesspersons are seeing their withdrawals being frozen until they are verified, which compels them to submit a lot of documentation to prove the validity of their income.
The other cause of such restrictions is the emergence of offshore brokers that are targeting Dutch residents with high-risk trading deals. These firms usually deal with jurisdictions that have little regulation making the investment more risky. The Dutch banks are so apprehensive of possible fraud and damage to their reputation that they would rather block any transactions associated with these parties. The intervention of an unregulated broker may complicate the procedure of withdrawal even in the cases when a trader has rightfully made some profits, the banks use the excuse of compliance as the basis to reject the withdrawal. This defensive position indicates a rising level of care, and not a level of animosity towards forex traders in general.
These banking limitations can be a nightmare to traders. Even withdrawals that are supposed to be completed in a few business days may be extended to weeks and the banks run anti-money laundering investigations or need to be provided with evidence of trading. There are institutions that will need to see the transaction history or the tax returns before they give out money. Unresponsive traders who are not able to present sufficient evidence can have the money refunded to the broker permanently, which eventually discourages participation in the forex trade.
In order to maneuver through these issues, the Dutch traders are shifting to regulated European brokers that have clear withdrawal procedures. The use of a forex broker, who is licensed in the EU, would make a transfer of funds easier, since the European regulations are in line with the regulatory requirements in the Netherlands. Reducing the risk of blocked transactions could also be reduced by selecting brokers that provide segregated client accounts and provide services based on EU-based payment providers. Keeping proper financial records and alignment of the name of the trading account with the bank account name helps minimize the chances of delays as well.
Finally, the limits that the Dutch banks set are not aimed at punishing the traders but to prevent misuse of the financial system. Nevertheless, such measures demonstrate the increasing tension between the freedom of investors and financial security. As banks focus on compliance and transparency, traders are finding more effective ways of accessing their earnings quicker and more efficiently. With the forex world ever-changing, there might be a need for a better definition of the relation between the Dutch financial institutions and the trading platforms to ensure that the legitimate traders are neither in the middle of regulation, nor caught by compliance.
