Financial Crime World

Dutch Financial Sector Braces Against Surging Financial Crimes: An Insight into The Netherlands’ Top Threats

The Netherlands, as a major player in the financial landscape, is taking decisive actions against a surge of financial crimes. To help financial institutions fortify their defenses, the Dutch Banking Association (NVB) has launched a comprehensive Financial Crime Threat Assessment for the Netherlands (2023-24) [1]. Here’s an overview of this initiative.

Background

In response to the increasing focus on risk-based approaches to financial crime prevention, the Dutch Central Bank and industry stakeholders have been hosting ‘risk-based roundtables’ [2, 3]. These discussions culminated in the creation of industry baselines and a pledge of collective achievements. Inspired by these developments, the NVB deemed it crucial to research, compile, and summarize relevant sources of information [4].

The objectives of this assessment are threefold:

  1. Create a Financial Crime Threat Assessment for banks based on this comprehensive compilation of threats.
  2. Engage in dialogue with the public sector regarding the impact of these threats and their identifiability.
  3. Serve as input for individual risk management processes, providing guidance on deploying capabilities effectively and reducing potential undesirable consequences.

Characteristics of the Dutch Financial Crime Landscape

Understanding the features of the Dutch financial crime landscape is essential to comprehending the nature of the threats:

  1. International trade center: The Netherlands’ role as an international trade hub makes it an attractive target for financial crimes.
  2. Strategic geographic location: Its location in Europe and open economy contribute to the risk.
  3. Advanced technology and digital environment: Technological sophistication and a well-developed digital infrastructure increase the vulnerability.
  4. Social and cultural environment: Certain societal and cultural aspects can foster an enabling environment for financial crimes.
  5. Political environment: Political instability or weak governance may pose risks.
  6. Maturity of industries: The maturity level of industries and their regulatory oversight can impact vulnerability.

Key Financial Crime Threats

After expert workshops, the NVB identified 88 potential threats based on publicly available information [8]. These threats were narrowed down to the 20 most significant ones for more detailed elaboration [9]:

  1. Arms trafficking
    • Description: The illegal trade in weapons.
    • Dutch context: The Netherlands is a significant transport hub for illicit arms trafficking.
  2. Bribery
    • Description: Offering, giving, or receiving something of value with the intent to influence the actions of an individual or organization.
    • Dutch context: Bribery is a pervasive issue, particularly in industries with complex business relationships.
  3. …
  • Concealment of beneficial ownership
  • Concealment of identity
  • Drugs economy
  • …

For a more detailed description of each threat, including the Dutch context and modus operandi, see the Financial Crime Threat Assessment for the Netherlands (2023-24) [11].

In conclusion, the Dutch Financial Crime Threat Assessment is an essential step to mount a more effective response against emerging financial crimes. This initiative unites banks and the public sector, offering comprehensive understanding of the threats and the knowledge needed to address potential risks, thereby enhancing overall security and resilience.

[1] Dutch Banking Association (NVB), 2024, Financial Crime Threat Assessment of The Netherlands 2023 -24

[2] Dutch Central Bank (DNB), 2023, Risk-based roundtables enhance financial sector’s collaboration

[3] NRC Handelsblad, 2023, ‘Risk-based roundtables’ geven financiele sector nieuwe samenwerking impuls

[4] Dutch Banking Association (NVB), 2023, [“Dutch bank association develops joint financial crime threat assessment for banks”](https://www.nvb.nl/pers communicatie/persberichten/artikelen/2023/09/dutch-bank-association-develops-joint-financial-crime-threat-assessment-for-banks)

[5] Dutch Banking Association (NVB), 2023, [“Dutch Banking Association announces partnership on financial crime threat assessment for banks”](https://www.nvb.nl/pers communicatie/persberichten/artikelen/2023/02/dutch-banking-association-announces-partnership-on-financial-crime-threat-assessment-for-banks)

[6] Dutch Banking Association (NVB), 2024, “Financial Crime Threat Assessment of The Netherlands 2023-24: Chapter 4, Dutch financial crime landscape”

[7] Dutch Banking Association (NVB), 2024, “Financial Crime Threat Assessment of The Netherlands 2023-24: Chapter 5, Compiled list of financial crime threats in The Netherlands”

[8] Dutch Banking Association (NVB), 2024, “Financial Crime Threat Assessment of The Netherlands 2023-24: Chapter 6, Financial Crime Threat Assessment of The Netherlands 2023-24”

[9] Dutch Banking Association (NVB), 2024, “Financial Crime Threat Assessment of The Netherlands 2023-24”

[10] Dutch Banking Association (NVB), 2024, “Methodology Financial Crime Threat Assessment of The Netherlands 2023-2024”

[11] Dutch Banking Association (NVB), 2024, “Financial Crime Threat Assessment of The Netherlands 2023-2024”