Dutch Finance Sector: Fighting Money Laundering and Terrorist Financing - Progress Made, Challenges Remain
Amsterdam, 24 August 2022
Overview
The Netherlands’ efforts to combat money laundering and terrorist financing (ML/TF) have resulted in commendable progress, however, certain challenges remain.
Current Risks
According to the Financial Action Task Force (FATF) assessment:
- Dutch financial sector faces significant ML risks primarily linked to fraud and drug-related offenses accounting for approximately 90% of proceeds of crime.
- Terrorist financing risks also exist due to religious extremism (ISIL and other UN-designated groups), and extreme right-wing terrorism.
Counter Measures
The Netherlands acknowledges these risks and has adopted several measures:
- Developed robust risk-based policies
- Collaborative framework with inter-agency coordination and public-private partnerships
- Cooperation with international partners
Challenges and Future Steps
Despite progress, technical deficiencies persist:
- Regulation of virtual asset service providers
- Bolstering risk-based supervision
- Addressing unlicensed activity and ensuring dissuasive sanctions for non-compliance
- Preventing legal persons from being used for criminal purposes
- Ensuring access to accurate, adequate, and current beneficial ownership information
Successes in ML/TF Prevention
Achievements include:
- Detection, investigation, and prosecution of terrorist financing related to foreign terrorist fighters’ funding.
Next Actions
Further measures to strengthen the Netherlands’ defense against ML/TF include:
- Enhanced reporting and supervision of timely implementation of targeted financial sanctions for terrorist financing or proliferation financing.
- Collaboration with the non-profit sector to prevent terrorist financing and mitigate the de-risking phenomenon.
Conclusion
While the Netherlands has made significant strides in ML/TF prevention, it must continue its efforts to fortify its defenses against these illicit activities.