Countries/Jurisdictions of Primary Concern - Netherlands

Bureau of International Narcotics and Law Enforcement Affairs
Report

The Netherlands is a major financial center and consequently an attractive venue for laundering funds generated from illicit activities, including activities related to the sale of cocaine, cannabis, or synthetic and designer drugs, such as ecstasy. The Netherlands has a prosperous and open economy, which depends heavily on foreign trade. Financial fraud, especially tax evasion, is believed to generate a considerable portion of domestic money laundering activity. There are a few indications of syndicate-type structures in organized crime and money laundering, but there is virtually no black market for smuggled goods in the Netherlands. Although few border controls exist within the Schengen Area of the EU, Dutch authorities run special operations in the border areas with Germany and Belgium and in the Port of Rotterdam to keep smuggling to a minimum. Underground remittance systems such as hawala operate in the Netherlands.

Six islands in the Caribbean fall under the jurisdiction of the Kingdom of the Netherlands. Bonaire, St. Eustatius, and Saba are special municipalities of the Netherlands. Aruba, Curacao, and St. Maarten are countries within the Kingdom of the Netherlands. The Netherlands provides supervision for the courts and for combating crime and drug trafficking within the Kingdom. As special municipalities, Bonaire, St. Eustatius, and Saba are officially considered “public bodies” under Dutch law.

For additional information focusing on terrorist financing, please refer to the Department of State’s Country Reports on Terrorism, which can be found at: //2009-2017.state.gov/j/ct/rls/crt/

Do FINANCIAL INSTITUTIONs engage in currency transactions related to international narcotics trafficking that include significant amounts of US currency; currency derived from illegal sales in the U.S.; or illegal drug sales that otherwise significantly affect the U.S.: NO

criminalizATION OF money laundering:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Are legal persons covered: criminally: YES civilly: NO

Know-your-customer (KYC) rules:

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: NO

KYC covered entities: Banks, credit institutions, securities and investment institutions, providers of money transaction services, life insurers and insurance brokers, credit card companies, casinos, traders and brokers in high-value goods, pawnshops, accountants, lawyers and independent legal consultants, business economic consultants, tax consultants, real estate brokers and surveyors, estate agents, civil law notaries, trusts and asset administration companies, and electronic money institutions

REPORTING REQUIREMENTS:

Number of STRs received and time frame: 29,382 in 2014

Number of CTRs received and time frame: Not applicable

STR covered entities: Banks, credit institutions, securities and investment institutions, providers of money and currency transaction services, life insurers and insurance brokers, credit card companies, casinos, traders and brokers in high-value goods, pawnshops, accountants, lawyers and independent legal consultants, business economic consultants, tax consultants, real estate brokers, estate agents, civil law notaries, trusts and asset administration companies, taxation offices, payment service providers and agents, and safe-rental companies

money laundering criminal Prosecutions/convictions:

Prosecutions: Not available

Convictions: Not available

Records exchange mechanism:

With U.S.: MLAT: YES Other mechanism: YES

With other governments/jurisdictions: YES

The Netherlands is a member of the FATF. Its most recent mutual evaluation can be found at:

http://www.fatf-gafi.org/publications/mutualevaluations/documents/mutualevaluationreportofthenetherlands.html

Enforcement and implementation issues and comments:

The Government of the Netherlands continues to correct noted deficiencies and to make progress in improving its AML/CFT regime. On January 1, 2015, new rules entered into force that raise the maximum prison sentence for money laundering and broaden the definition of corruption to include bribery of financial service providers. Furthermore, pawnshops and brokers in high-value goods are now categorized by law as KYC- and STR-covered entities. The new legislation introduces more stringent rules on audit and compliance for trusts and asset administration companies. On March 1, 2015, the National Prosecutor’s Office issued new guidelines on prosecuting money laundering cases.

The Netherlands utilizes an “unusual transaction” reporting system. Designated entities are required to file unusual transaction reports (UTRs) with the Financial Intelligence Unit (FIU) on any transaction that appears “unusual” (applying a broader standard than “suspicious”), or when there is reason to believe a transaction is connected with money laundering or terrorism financing. The FIU analyzes UTRs and forwards them to law enforcement for criminal investigation. Once the FIU forwards the report, the report is then classified as a suspicious transaction report (STR). There were 277,532 UTRs filed in 2014. The Netherlands does not require all covered entities to report all transactions in currency above a fixed threshold. Instead, different thresholds apply to various specific transactions, products, and sectors.

The FIU is an independent, autonomous entity under the National Police Unit. It is expected that the ongoing National Police’s reorganization, scheduled for completion in 2018, will enhance law enforcement flexibility and effectiveness in responding to money laundering cases. The police closely cooperate with the Tax Authority’s investigative service. The Anti-Money Laundering Center, established in 2013, combines expertise from government agencies, such as the FIU, the National Police, and the Tax Authority; knowledge institutions; private sector partners; and international organizations. Seizing financial assets of criminals continues to be a priority for law enforcement.

In 2015, Dutch law enforcement authorities arrested a number of individuals offering a guaranteed anonymous exchange of large amounts of bitcoins in exchange for fiat currency (euros). Because of the suspect nature of the origin of the bitcoins, the exchange service charged a higher commission rate. The investigation is ongoing.

The Government of the Kingdom of the Netherlands should make available the number of prosecutions and convictions so as to better evaluate the effectiveness of its AML/CFT regime.