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The Dutch Banking Association (NVB) has released its latest Financial Crime Threat Assessment, offering a comprehensive overview of the nation's top financial crime risks. While the study wasn't conducted scientifically, NVB emphasizes that insights provided by banking and public sector experts can assist banks in implementing effective anti-money laundering (AML) controls.
The assessment initially scrutinized 88 potential threats, culminating in the identification of 20 key issues. Each threat is meticulously outlined, shedding light on its relevance to the Netherlands and the severity of the risk. Here are some of the prominent threats highlighted:
Arms Trafficking: Arms are often traded via parcel packages and road transport, with a notable increase in illicit possession and trade cases registered by police.
Bribery: The Netherlands, being a transit point for international drug traffickers, faces the risk of bribery of customs officials, although it maintains a relatively low corruption perception index score.
Concealment of Beneficial Ownership: Dutch regulations may attract companies establishing complex ownership structures to conceal beneficial owners, emphasizing the need for a public register of beneficial ownership.
Concealment of Identity: The Netherlands' digital inclusivity creates opportunities for fraudsters to forge or misuse digital identities, including through "deepfake" technology.
Drugs Economy: The Netherlands serves as a transit country for drugs, with significant quantities seized by authorities in recent years.
Environmental Crime: The country's role as a hub for commodities associated with illegal activities, coupled with a thriving drug production industry, poses environmental and regulatory challenges.
Extremism: The open and tolerant society of the Netherlands attracts extremists, potentially leading to the misuse of virtual assets and crowdfunding for illicit activities.
Fragmentation of Payment Landscape: The high digital acceptance rate in the Netherlands allows criminals to utilize online payment platforms for money laundering, further complicated by numerous registered financial entities.
Market Facilitators: Professionals like lawyers and accountants can inadvertently engage in criminal cooperation, exploiting regulatory gaps.
Modern Slavery: The Netherlands' hub status facilitates the concealment of labor exploitation within the supply chain.
Organized Crime at Transport Hubs: Crime gangs exploit Dutch air and sea ports for trafficking illegal goods, often concealing them in legitimate cargo.
Payment Fraud: The extensive digital infrastructure of the Netherlands makes it a prime target for payment fraud schemes.
Public Funding Fraud: EU subsidy fraud poses a risk, with estimates indicating substantial fraudulent activity.
Sanctions Evasion: Limited law enforcement capacity relative to financial flows increases the vulnerability to sanctions evasion.
State Actors: The Netherlands' financial sector's size makes it a target for illicit activities by state actors.
Tax Evasion: The complex international tax environment and the country's financial sector attract entities seeking to evade taxes.
Terrorism Financing: The size and complexity of the financial sector facilitate the hiding of terrorist financing sources.
Trade-Based Money Laundering: Real estate and high-value goods trade can be used to legitimize criminal proceeds through deceptive tactics.
Underground Banking: Diverse nationalities in the Netherlands increase the likelihood of underground banking practices.
VAT Fraud: Complexities in the Dutch tax system create opportunities for fraudsters to exploit legal loopholes, particularly in VAT reporting.
These assessments underscore the multifaceted challenges faced by banks in the Netherlands and the importance of robust AML measures to mitigate financial crime risks.
By fLEXI tEAM