Netherlands Antilles Banking Sector Falls Short in Preventing Financial Crime

The Netherlands Antilles’ efforts to combat money laundering and terrorist financing have shown some positive results, but the country still faces significant challenges in preventing legal persons from being used for criminal purposes, strengthening risk-based supervision, and ensuring proportionate sanctions for financial crimes.

Key Challenges in the Netherlands Antilles Banking Sector

Main Money Laundering Risks

• Fraud and drug-related offenses: Account for 90% of all proceeds of crime
• Terrorist financing risks: Linked to religious extremism, including ISIL and other UN-designated groups, as well as extreme right-wing terrorism

Technical Deficiencies

• Regulation of virtual asset service providers: Needs improvement
• Risk-based supervision: Requires more resources and addressing unlicensed activity

Need for Improvement in Preventing Legal Persons from Being Used for Criminal Purposes

• Beneficial ownership information: Inadequate, inaccurate, or outdated
• Reporting and supervising targeted financial sanctions: Needs more focus

Recommendations for the Netherlands Antilles

To meet its full potential in combating financial crime, the Netherlands Antilles should prioritize:

Improving Risk-Based Supervision

• Increase resources to address unlicensed activity and improve risk-based supervision
• Enhance cooperation with law enforcement agencies and the Dutch financial intelligence unit (FIU-NL)

Ensuring Proportionate Sanctions for Non-Compliance

• Implement proportionate sanctions for non-compliance with preventive measures
• Improve reporting and supervising targeted financial sanctions

Addressing Technical Deficiencies

• Develop robust regulations for virtual asset service providers
• Improve access to adequate, accurate, and current beneficial ownership information