Title: Financially Dangerous Waters: An In-depth Look at Financial Crime and Cybersecurity Threats in the Netherlands

Background

The Dutch Banking Association (NVB) has published the much-awaited 2023-24 Financial Crime Threat Assessment for The Netherlands. This assessment, created through collaboration between the public and private sectors, offers an extensive overview of current financial crime threats in the country.

• Rise of risk-based approaches in financial crime prevention instigated the initiation of ‘risk-based roundtables’ in 2023 by the Dutch Central Bank. This led to improved communication and documentation within the sector, making way for more explicit guidelines and collaboration on Dutch-specific financial crime risks.

Methodology

The NVB conducted an in-depth investigation, analyzing publicly available data on financial crime threats in The Netherlands, accompanied by expert insights gathered through workshops hosted by public and private parties. Experts from five leading banks and the public sector, including the Financial Intelligence Unit, Fiscal Intelligence and Investigation Service, and the Netherlands Police, contributed to these collaborative sessions.

The Dutch Financial Crime Landscape

The Netherlands, a prominent international trade center with one of the highest gross domestic product (GDP) and competitive economies, is a hotspot for financial crime due to its strategic geographic location. Key features of the Dutch financial crime landscape include:

1. Significant international trade center
2. Easily accessible to EU and Schengen zone countries
3. International financial hub
4. Numerous internationally active banks

Identified Financial Crime Threats

This assessment uncovers several significant financial crime threats that impact The Netherlands. Some of the most notable threats include:

1. Bribery and corruption
2. Arms trafficking
3. Modern slavery
4. Fragmentation of the payment landscape
5. Tax evasion

Arms Trafficking

A major concern is the prevalence of arms trafficking in the Netherlands, which is an essential transit and destination country for illicit firearms. This threat is often linked to sanction evasion due to the nature of the product.

Bribery

Bribery encompasses various practices, such as offering or soliciting something of value to influence individuals in positions of authority. It is a considerable threat impacting the country.

Modern Slavery and Human Trafficking

The Netherlands faces a high prevalence of modern slavery and human trafficking, with numerous annual victim discoveries across various industries. The fragmented payment landscape and vulnerabilities in the labor sector exacerbate these risks.

Fragmentation of the Payment Landscape

The proliferation of virtual IBANs, payment service providers, virtual assets (such as cryptocurrencies and non-fungible tokens), and other innovations has created a fragmented payment landscape, leading to opportunities for fraudulent activities.

Tax Evasion

Tax evasion remains a persistent threat in The Netherlands; some domestic and international businesses exploit tax loopholes or engage in undesirable practices.

Conclusion

This 2023-24 Financial Crime Threat Assessment for The Netherlands is an indispensable resource for financial institutions, offering detailed insights into the current and relevant financial crime threats impacting the country, including their characteristics, modus operandi, and extent. Armed with this knowledge, organizations can strengthen their risk management strategies and effectively combat financial crime.