Financial Crime World

Economic Developments in the Netherlands Antilles

The Netherlands Antilles experienced a significant economic downturn in 1997, which continued into subsequent years. Here are some key statistics on the economy’s performance:

Economic Performance

  • Real GDP declined by 12% between 1996 and 1997.
  • Inflation rose from 0.8% in 1999 to 5.0% in 2000, but decreased to 0.4% in 2002.
  • Unemployment fluctuated over the period, decreasing from 14.1% in 1999 to 12.9% in 2000, before increasing to 14% in 2001.
  • The economy showed a modest upturn starting in 2001, with estimated growth of ¾ percent over 2001-02 and projected growth of ½ percent for 2003.

Public Finances

The public finances of the Netherlands Antilles have deteriorated sharply, with significant increases in government deficits. Here are some key statistics:

Government Deficits

  • The general government deficit increased to a historical high of 5½ percent of GDP.
  • The central bank provided net credit to the government equaling 1.0 percent of GDP in 2001.

Financial Sector Environment

The Netherlands Antilles has a well-developed and well-functioning legal and regulatory framework for financial sector supervision. Here are some key aspects:

Regulatory Framework

  • The Bank of the Netherlands Antilles (BNA) is fully responsible for financial sector oversight.
  • The BNA combines banking, insurance, pension fund, and mutual fund supervision.
  • Laws and regulations are largely compliant with international standards on banking supervision, insurance supervision, anti-money laundering/combating the financing of terrorism (AML/CFT), and investment institution supervision.

Anti-Money Laundering Policies

The Netherlands Antilles has been subject to various assessments of its AML policies and practices. Here are some key developments:

Recent Developments

  • In August 2001, company service providers were placed under supervision of the Supervisory Board for Fiduciary Business.
  • This obliged them to apply Know Your Customer (KYC) rules and report unusual transactions to the authorities.

Business Environment

The traditional business environment in the Netherlands Antilles operated under a relatively low level of disclosure. However, international efforts to combat money laundering, terrorism financing, and other illicit activities have led to increased scrutiny:

Changes in Business Environment

  • Increased international efforts have changed the traditional outlook on business operations.
  • Authorities and private sectors agree that more disclosure is needed to comply with international standards.