Dutch doing a better job fighting money laundering, international monitor says

The Netherlands is booking “good results” in its fight against money laundering and terrorist financing, but there is still much room for improvement. The Financial Action Task Force (FATF), an intergovernmental organization focused on combating money laundering, said in a report that Minister Sigrid Kaag of Finance recently sent to parliament.

According to FATF, 90 percent of the Netherlands’ money laundering risks are related to fraud and drug crimes. There is also a smaller risk of terrorism financing from religious extremist groups and right-wing terrorism. “The Netherlands has a good understanding of the risks it faces and has developed robust risk-based policies and strategies to address them,” the organization said.

FATF also praised the cooperation between various Netherlands agencies in detecting and fighting money laundering. “The Netherlands is also particularly effective in cooperating with its international partners.”

But there is still room for improvement, FATF said. The Dutch authorities do well in confiscating criminal assets. “But the country needs to do more to prevent legal persons from being used for criminal purposes.” It is also often unclear who the owner or ultimate beneficiary is of businesses, foundations, or other organizations. That must improve.

While the Netherlands' supervision of its institutions’ measures to prevent money laundering is competent in itself, it is often too non-committal, the watchdog said. The punishments and penalties for money laundering are also too low to deter criminals. FATF advised the Netherlands to ensure “proportionate and dissuasive sanctions for non-compliance with preventive measures.”

Over the past years, the Dutch authorities fined multiple of its banks for not following the anti-money laundering rules. Last year, ABN Amro paid a fine of 480 million euros for not having its supervision on customers in order. In 2018, ING paid 775 million euros for the same offense.

The same goes for terrorism funding. “Dutch authorities have successfully detected, investigated, and prosecuted terrorist financing,” FATF said, pointing out that the country actively engages with the non-profit sector to prevent abuse. “However, authorities should focus more on the reporting and supervision of the timely implementation of targeted sanctions for terrorist financing.”

Minister Kaag said that she and Minister Dilan Yeşilgöz-Zegerius of Justice and Security would respond substantively to the report after the summer.