Dutch Efforts to Combat Financial Crime Show Promise, But More Needs to be Done

===========================================================

The Netherlands has made significant strides in combating financial crime, particularly in the areas of money laundering and terrorist financing. However, despite these efforts, more needs to be done to strengthen risk-based supervision, prevent legal persons from being used for criminal purposes, and ensure sanctions are proportionate and dissuasive.

Main Money Laundering Risks

• Fraud and drug-related offenses represent 90% of all Dutch proceeds of crime
• The country also faces terrorist financing risks from religious extremism (ISIL) and other UN-designated groups, as well as extreme right-wing terrorism

Risk-Based Policies and Strategies

The Netherlands has developed robust risk-based policies and strategies to address its money laundering and terrorist financing risks. These include:

• A good understanding of the country’s main risks
• Robust risk-based supervision
• Public-private partnerships
• Proactive engagement with the non-profit sector to avoid abuse for terrorist financing

Technical Deficiencies

Despite these efforts, technical deficiencies remain, including:

• Regulation of virtual asset service providers
• Limited resources for risk-based supervision, particularly in addressing unlicensed activity and ensuring proportionate sanctions for non-compliance

International Cooperation

The Netherlands has been effective in cooperating with international partners and pursues confiscation of criminal assets as a strategic priority.

Preventing Legal Persons from Being Used for Criminal Purposes

To combat financial crime more effectively, the country must:

• Increase resources for risk-based supervision
• Ensure access to adequate, accurate, and current beneficial ownership information
• Prevent legal persons from being used for criminal purposes

Successes in Detecting and Prosecuting Terrorist Financing Cases

The Netherlands has achieved successes in detecting, investigating, and prosecuting terrorist financing cases, primarily involving the funding of foreign terrorist fighters.

Ongoing Challenges

Despite these successes, authorities must focus more on:

• Reporting and supervising the timely implementation of targeted financial sanctions for terrorist financing or proliferation financing
• Preventing de-risking and ensuring that financial institutions continue to serve customers without creating unnecessary risks

Conclusion

The Netherlands’ efforts to combat money laundering and terrorist financing are promising, but more needs to be done to address these complex and evolving threats. By strengthening risk-based supervision, preventing legal persons from being used for criminal purposes, and ensuring sanctions are proportionate and dissuasive, the country can further its efforts in combating financial crime.