Dutch Anti-Money Laundering Efforts Show Promise But Need Improvement, Experts Say

The Netherlands’ efforts to combat money laundering and terrorist financing have yielded positive results, but more needs to be done to prevent legal entities from being exploited for criminal purposes, strengthen risk-based supervision, and ensure penalties for these offenses are proportionate and deterrent.

Main Money Laundering Risks

According to officials, the country’s main money laundering risks stem from:

• Fraud
• Drug-related crimes, which account for a staggering 90% of all Dutch proceeds of crime

Additionally, the Netherlands faces terrorist financing threats from:

• Religious extremism, such as ISIL and other UN-designated groups
• Extreme right-wing terrorism

Progress and Challenges

Despite these challenges, the country has made significant strides in understanding its risks and developing robust policies to address them. However, it still needs to address several technical deficiencies, including:

• Regulation of virtual asset service providers

Domestic Cooperation

The Netherlands’ anti-money laundering and counter-terrorism financing system is built on strong domestic cooperation between:

• Law enforcement agencies
• Financial intelligence units

High-quality financial intelligence is regularly shared among investigators, and public-private partnerships have been established to combat these crimes.

International Cooperation

The Netherlands also boasts an impressive record of international cooperation. However, experts suggest that it should allocate more resources to:

• Improve risk-based supervision
• Tackle unlicensed activity
• Ensure proportionate sanctions for non-compliance with preventive measures

Confiscation of Criminal Assets

Confiscation of criminal assets is a top priority in the Netherlands. However, officials acknowledge that more needs to be done to:

• Prevent legal entities from being exploited for criminal purposes
• Ensure access to accurate beneficial ownership information

Detecting and Prosecuting Terrorist Financing Cases

The country has made significant progress in detecting and prosecuting terrorist financing cases, primarily involving funding for foreign terrorist fighters. Authorities have taken proactive steps to engage with non-profit organizations to avoid their abuse for terrorist financing and prevent de-risking.

However, experts warn that more needs to be done to:

• Ensure timely reporting
• Supervise targeted financial sanctions for terrorist financing or proliferation financing