The Netherlands Cracks Down on Money Laundering and Terrorist Financing: A Look at the Progress and Challenges

Amsterdam, 24 August 2022

Dutch Efforts to Combat Money Laundering and Terrorist Financing: Current Status

The Netherlands is making considerable progress in its efforts to prevent money laundering and terrorist financing, but there are areas that require improvement. According to a recent evaluation, Dutch authorities reported that the country’s prevention measures are yielding positive results, especially in the areas of anti-money laundering (AML) and countering terrorist financing (CTF) policy development and inter-agency coordination. However, they expressed concerns regarding certain challenges and weaknesses.

Identified Challenges and Areas for Improvement

Use of Legal Persons in Criminal Activities

The Netherlands faces significant money laundering threats, primarily from fraud and drug-related crimes, which account for approximately 90% of the country’s illicit proceeds. To improve their defenses, Dutch authorities recognized the need to address the use of legal persons for criminal activities and to strengthen risk-based supervision.

Regulating Virtual Asset Service Providers

One of the technical issues that needs attention is the regulation of virtual asset service providers (VASPs). The Dutch authorities must implement the necessary measures to further bolster their defenses against financial crime in this rapidly evolving sector.

Adequate and Dissuasive Penalties for Money Laundering and Terrorist Financing Offenses

Ensuring adequate and dissuasive penalties for money laundering and terrorist financing offenses is essential for a robust financial crime prevention framework. Current penalties, although improving, may not be sufficient to deter potential offenders.

Cooperation and Collaboration: Strengths and Challenges

Domestic Inter-agency Coordination and Public-Private Partnerships

The Netherlands’ anti-money laundering and countering terrorist financing system is characterized by domestic inter-agency coordination and public-private partnerships. Law enforcement and financial intelligence unit (FIU-NL) agents work closely together, using high-quality financial intelligence from FIU-NL, datahubs, and cooperation platforms during investigations.

International Cooperation

The Netherlands excels at international cooperation, but increasing resources for risk-based supervision is crucial. This will help address unlicensed activity and ensure proportionate and deterring sanctions for non-compliance.

Strategic Objectives and Measured Success

Confiscation of Criminal Assets

Dutch authorities prioritize the confiscation of criminal assets as a strategic objective in their fight against financial crime. They acknowledge the need to address weaknesses in their systems, specifically in relation to preventing legal persons from being used for illicit purposes and ensuring access to accurate and up-to-date beneficial ownership information.

Terrorist Financing Detection and Prevention

In recent years, the Netherlands has effectively detected, investigated, and prosecuted terrorist financing, primarily concerning foreign terrorist fighter funding. However, there is a need to improve the implementation and reporting of targeted financial sanctions for terrorist financing or proliferation financing in a more timely fashion.

Summary and Conclusion

In summary, the Netherlands has made significant strides in its efforts to combat money laundering and terrorist financing, but there are still challenges and weaknesses that need to be addressed. Improving risk-based supervision, strengthening cooperation between agencies, and ensuring adequate penalties for offenders are crucial steps towards a more robust financial crime prevention framework. The ongoing efforts to address these issues demonstrate the Dutch authorities’ commitment to effectively combating financial crime.