Transaction Monitoring Netherlands: a unique step in the fight against money laundering and the financing of terrorism
Estimates suggest that EUR 16 billion of criminal money is laundered in the Netherlands each year. The money comes from activities including drug trafficking, human trafficking, child pornography and extortion. Criminals make every effort to conceal the origin of their criminal funds, and frequently abuse multiple banks for this purpose.
President Chris Buijink of the Dutch Banking Association (NVB): “The fight against money laundering and the financing of terrorism is a top priority in the banking sector. The banks contribute to preventing and combating the undermining influence of criminality and the preservation of the integrity of the financial system. They make substantial investments in this area. Really effective combating of this type of criminality is only possible through closer cooperation. This cooperation will have positive consequences throughout the chain from detection to prosecution. TMNL is an essential collective step that is a world first.”
The added value of collective transaction monitoring
Following an announcement in September 2019, the five banks have studied whether collective transaction monitoring is technically and legally feasible under the aegis of the Dutch Banking Association, as well as the question of whether TMNL can add material value in the fight against money laundering.
The research showed that collective transaction will allow for better and more effective detection of criminal money flows and networks in addition to what banks can achieve individually with their own transaction data. It also showed that combining transaction data will provide new (inter-bank) information that will be useful in the fight against financial criminality. The study findings have recently been discussed with some of the public parties involved.
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A national (chain) approach is needed
In addition to the banks fulfilling their own responsibility as gate-keepers, effectively dealing with money laundering and the financing of terrorism requires a national (chain) approach. The banks are therefore working closely with government partners such as the Ministries of Finance and Justice and Security, the FIOD and the Financial Intelligence Unit (FIU). The aim is to collectively significantly increase the return from the chain from identification to detection, prosecution and conviction of criminality. The formation of TMNL ties in with the Money Laundering Action Plan announced by the government in mid-2019. As part of this plan an amendment of the Anti-Money Laundering and Anti-Terrorist Financing Act (Wet tegen witwassen en terrorismefinanciering, or ‘Wwft’) is foreseen to enable full-scale collective transaction monitoring.
The construction and development of TMNL will be done in phases. The banks have decided to start with this initiative now in anticipation of the proposed amendment to the legislation, due to the urgency of the fight against money laundering and the financing of terrorism and the support from government bodies. Basic assumption is that other banks will also be able to make use of TMNL in due course.