What is Financial Safety (FS)?

The Netherlands is a top European country when it comes to the strength of its financial sector. That sector is an extensive system for the legitimate flow of money and goods of (inter)national organisations and private individuals. That system can also be misused for illegal money and goods flows in money laundering schemes. Misuse of the Dutch financial system has a subversive effect and undermines confidence in the state and rule of law. Financial Safety relates to the condition of the financial system. The higher the degree of Financial Safety, the less the Dutch financial system can be used for illegal money and goods flows. Achieving complete Financial Safety may of course be a utopian dream, a point on the horizon which we as the AMLC will never arrive at. But if all the parties concerned join forces, the public and private parties can make great strides in the right direction. This is exactly what the AMLC is aiming to achieve; a degree of cooperation with our partners that leads to the highest possible level of Financial Safety. This is both a desirable and a necessary condition for maintaining a healthy financial system. Important players in the financial playing field are those who fulfil what is known as a ‘gatekeeper’ function. A gatekeeper is understood to be: ‘a player who, thanks to the services he or she provides, is in a position to see an opportunity for potential mala fide practices and is able to issue an alert about that opportunity.’ These may be known players who already participate in certain cooperation initiatives already exist, or they may be less known players who do not. The commitment of the AMLC to the Financial Safety theme is twofold. First there is the intensification of cooperation with the known players and exploring the playing field of less well-known players with whom cooperation is also sought. Second, if cooperation is not the answer, an appropriate enforcement strategy will be deployed. The AMLC considers it important to raise the level of awareness among gatekeepers with regard to financial safety. This should be part and parcel of a sustainable business culture and a clear understanding on the part of players in the financial sector of their responsibilities with regard to Financial Safety.

What is the scope of the theme?

• Setting up, continuing and extending public-private partnership with players in the financial system and strengthening existing cooperation with public partners in the anti money laundering process.
• In cooperation with public and private partners, acquiring knowledge and expertise about (money laundering) phenomena and disseminating it to the financial sector and partners in the fight against money laundering;
• Assistance in optimising the process of transaction monitoring and also generating and following up on signals.
• Promoting financial safety partly by means of the application of administrative and criminal law.
• Promoting a financially sustainable business culture in the financial sector.

Spearheads

The Financial Safety theme concentrates on two types of player, namely compliant and non compliant. For compliant players the main focus is on the spearheads knowledge and expertise and pursuing a common objective with the players involved in Financial Safety. For non compliant players the focus is on raising awareness and enforcement.

Compliant players

Knowledge and expertise

The financial sector, scientific community, investigative journalism, supervisory bodies and prosecution all have access to certain knowledge and information on the subject of Financial Safety. The AMLC can play a role in making this accessibility to knowledge and information visible and providing it to others by connecting the parties and promoting the sharing of knowledge. The AMLC is constantly looking for new knowledge regarding phenomena, trends, indicators and developments associated with money laundering. Knowledge of analysis techniques for example, or of how ‘high end money laundering schemes’ work, which operate among other things through the Dutch financial system, or of relocation effects due the tightening of money laundering prevention measures in particular countries. By connecting the various players and access to the associated expertise and data, we can get a clearer picture of present and future threats.

Common objective

Connecting all the players in a risk-based approach to money laundering starts with setting a common objective endorsed by all the parties concerned. This allows gatekeepers to use targeted monitoring of signals on specific subjects. Those signals can then be labelled and filtered out of the flow of unusual transactions so that they can then be regarded as suspicious. One of the next steps will be to analyse signals to acquire new knowledge of trends and phenomena. There must also be a follow-up to these suspicious transactions as part of an enforcement strategy. By realising connections the AMLC seeks to encourage feedback to the players concerned. The ultimate aim is to improve the quality of the monitoring process and increase the sense of fulfilment among gatekeepers. This approach will make it possible to take part in a range of different cooperation initiatives with players. Customisation in society creates room for innovative projects suited to the diverging interests and specific knowledge of the players.

Non compliant players

Enforcement

In spite of the best efforts of the AMLC and its partners in the chain of players involved with Financial Safety, there will always be parties who do not live up to their responsibilities. This leads not only to potential misuse of the financial system but also to a negative effect on those players who actually do their best to make a positive contribution. Non compliant institutions may even acquire an unfair competitive position by cutting costs. Apart from its commitment to the above-mentioned spearheads of knowledge and expertise and finding a common objective, the AMLC regards the tackling of non compliant players as a third spearhead. The latter endeavour will be realised by deploying effective administrative – and/or criminal – enforcement. Signals originating from the improved system, accumulated in cooperation with compliant players, may thereby lead to action. All the more reason, therefore, to focus on knowledge and expertise, and the ability of players inside the financial system and enforcement to issue alerts.