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The Dutch Approach to Prosecuting Money Laundering

Publication date 24-09-2024

The fight against money laundering is a top priority for our government, as it plays a critical role in combating serious crime. By obscuring the origins of their illegal gains, perpetrators can evade investigative authorities and enjoy their accumulated wealth without disturbance.

The Netherlands adopts a robust and comprehensive approach to prosecuting money laundering, guided by specific laws and regulations aimed at detecting, preventing, and punishing financial crimes.

Criminal law

The primary legal framework governing money laundering in the Netherlands is based in the Dutch Penal Code, particularly Articles 420bis, 420ter, 420quater and 420bis.1, which define various forms of money laundering as criminal offenses. These laws provide the foundation for prosecuting individuals and entities involved in concealing or disguising the origin, acquisition, or use of illicit funds.

Article 420bis Penal Code (intentional money laundering)

Being guilty of money laundering shall be punishable by imprisonment for a term not exceeding six years or a fifth-category fine:

a.
he who conceals or disguises the true nature, origin, location, disposition or movement of an object, or conceals or disguises who is the rightful owner of an object or has it in his possession, while knowing that the object - directly or indirectly - originates from any crime;

b.
he who acquires, possesses, transfers or converts an object or uses an object, while he knows that the object - directly or indirectly - originates from any crime.

Indirect method of proof

Dutch money laundering cases of the last decade have shown that it is possible to fairly convict suspects of money laundering without proving a predicate offence. It is sufficient to proof that the object does not originate from a legal source. In the following report you can read how, in a Dutch criminal investigation and prosecution, sufficient evidence can be produced in a stand-alone money laundering case. Secondly, and most importantly, it aims to claim that other countries can do the same in their fight against money laundering.

For a conviction for money laundering without an evident predicate offence the Court of Appeal in Amsterdam summed up the assessment framework for money laundering without a known predicate offence. This so called step-by-step plan, or indirect method of proof, is approved by the European Court of Human Rights (ECHR) in the case Zschüschen v. Belgium.

Phases of Money Laundering

Money laundering is considered a process that consists of three phases:

  1. Placement: The first phase involves introducing cash into the financial system, for example, by depositing it into a bank account.
  2. Concealment: The second phase includes transferring sums of money to various bank accounts, both within the Netherlands and abroad.
  3. Integration: In the third phase, the proceeds of crime are spent on luxury goods or invested in legitimate assets.

The legal definition of money laundering in the Netherlands is broader than these three phases. According to Dutch law, it is not necessary for all three phases to occur for a conviction. While money laundering typically involves cash, the Dutch interpretation extends beyond money; for instance, objects and rights can also be laundered. Money laundering is classified as a criminal offense under the Criminal Code, and a prison sentence may be imposed for this crime.

Preventive law

The Money Laundering and Terrorism Financing Prevention Act (Wwft) became effective in 2008.

Entities with an obligation to report, such as financial institutions, accountants and payment service providers, must 'know their customers' and report unusual transactions to FIU-NL on the basis of objective and/or subjective indicators. Failing to report unusual transactions may have consequences.

The entities themselves have to assess the risks certain customers or products entail. The Act offers the entities the possibility to adjust their efforts to these risks. This approach has been incorporated in the entity’s own compliance regulations and fits within their responsibilities and the duty of due care to which they are subject. The internal regulations are custom-made and become more stringent as the estimated risk increases. In addition, the Wwft does not prescribe as mandatory how an entity must achieve a result; it only describes the required result.

Partnerships

The Netherlands emphasizes the importance of public-private partnerships, recognizing that collaboration with financial institutions and other stakeholders is essential for identifying suspicious transactions and enhancing the overall effectiveness of anti-money laundering efforts.

Partnerships can be temporary or structural. We consolidate and expand our cooperation with primary partners, such as FIU-NL, the Tax Authority, the National Police and the Public Prosecutor Service. We do this by jointly implementing projects and by generating intelligence through data and analysis. Public-private cooperation focuses on sharing new modus operandi, formulating indicators, share knowledge etc.

We also cooperate with international parties. Read more here.