Financial Crime World

Dutch Financial Crime Threat Landscape: A Comprehensive Assessment for 2023-2024

Amidst mounting global concern for financial crime, the Dutch Banking Association (NVB) has published its annual Financial Crime Threat Assessment for the Netherlands. This assessment, a collaborative effort between financial institutions, public authorities, and experts, aims to provide valuable insights into the Dutch financial sector’s current risk landscape.

Assessment Process

The assessment was developed through a series of workshops and extensive research. Expert opinions and published data were used to identify, analyze, and prioritize potential financial crime threats to the Netherlands. The following clusters emerged based on their associations:

  1. Arms Trafficking, Bribery, and Corruption, Concealment of Beneficial Ownership, Concealment of Identity
  2. Drugs Economy, Environmental Crime, Extremism
  3. Fragmentation of Payment Landscape, Market Facilitators, Modern Slavery, Organized Crime in Transport Hubs
  4. Payment Fraud, Public Funding Fraud, Sanction Evasion, State Actors, Tax Evasion, Terrorism Financing, Trade-Based Money Laundering, Underground Banking, VAT Fraud

From these clusters, the subsequent phase of the assessment selected 20 threats to be presented in detail, focusing on their relevance, impact on the Netherlands, and potential implications for the financial sector.

Identified Threats

  1. Arms trafficking

    • According to the Global Initiative against Transnational Organized Crime (GI-TOC), arms trafficking poses a significant risk to the Dutch financial sector.

  2. Bribery and Corruption

    • The EU prioritizes the fight against bribery and corruption as part of its EMPACT 2022-2024 strategies.

  3. Concealment of Beneficial Ownership

    • The EU advocates for increased transparency in beneficial ownership through the 5th Anti-Money Laundering Directive (5AMLD).

  4. Concealment of Identity

    • The Netherlands National Risk Assessment (Witwassen) highlights identity concealment as a major concern.

  5. Drugs economy

    • The University of Leiden’s report, “The Way of the Gun: Firearm Trafficking and its impact on violence in The Netherlands,” underscores the link between drug economies and financial crime.

  6. Environmental crime

    • The Dutch National Risk Assessment (2017) identifies environmental crime as a growing concern.

  7. Extremism

    • Extremist organizations may exploit financial systems for their activities, as detailed in the Politie’s National Threat Assessment (2017).

  8. Fragmentation of payment landscape

    • The fragmentation of payment systems creates opportunities for financial crime, making it a significant concern.

  9. Market facilitators

    • Market facilitators contribute to various financial crimes, such as money laundering and tax evasion.

  10. Modern slavery

    • Modern slavery affects various industries, including financial services, where victims may be used for money laundering.

  11. Organized crime in transport hubs

    • Transport hubs, such as ports and airports, are high-risk areas for organized crime activities.

  12. Payment fraud

    • Payment fraud remains a significant risk, as highlighted by numerous reports and studies.

  13. Public funding fraud

    • Financial institutions and governments are susceptible to public funding fraud, costing large sums of money.

  14. Sanction evasion

    • Sanction evasion poses a considerable risk, with organizations and individuals seeking ways to bypass international sanctions.

  15. State actors

    • State actors may use financial systems to launder money or fund their activities.

  16. Tax evasion

    • Tax evasion remains a persistent challenge, with offshore tax havens and sophisticated schemes continuing to emerge.

  17. Terrorism financing

    • Terrorist organizations may exploit financial systems to fund their activities, posing a grave threat to security.

  18. Trade-based money laundering

    • Trade-based money laundering is a complex form of financial crime, relying on legitimate trade transactions to conceal illicit funds.

  19. Underground banking

    • Underground banking systems, though often linked to organized crime, can be challenging to regulate and monitor.

  20. VAT fraud

    • Value-added tax (VAT) fraud, a significant threat worldwide, continues to pose a problem for the Dutch financial sector.

Conclusion

This assessment not only highlights the nature and extent of each threat but also shares insights into their modus operandi and societal implications. Equipped with this knowledge, financial institutions can implement effective risk management strategies and safeguard the financial sector from potential threats.

Sources

  1. The Netherlands Country Financial Crime Dashboard, Financial Crime News
  2. Arms trafficking (Global Initiative against Transnational Organized Crime), Global Organised Crime Index
  3. The Netherlands Country Financial Crime Dashboard, Financial Crime News
  4. The EU’s priorities for the fight against serious and organized crime for EMPACT 2022-2024, Europol
  5. The Way of the Gun: Firearm trafficking and its impact on violence in The Netherlands, Universiteit Leiden
  6. National Risk Assessment Witwassen, WODC
  7. Nationaal Dreigingsbeeld (2017), Politie.