In the fight against money laundering and terrorist financing , the government wants banks to private transactions above €100 plus all business transactions – so also those under 100 Euro – are to be monitored. This is according to the legislative proposal ‘ Money laundering action plan ‘ that Minister Kaag of Finance sent to the House of Representatives in October last year.
The idea behind this change in the law is for banks to more quickly identify unusual transaction patterns by exchanging information. A necessary step according to the cabinet because money laundering is a too big a problem for banks to tackle individually.
“Unprecedented mass surveillance”
Whether the plans will get through parliament in their current form remains to be seen. There are concerns among MPs , for instance , about the privacy of account holders. Criticism therefore came from the Personal Data Authority, one of the cabinet ‘ s advisory bodies. If the proposals in their current form are elected into law , the regulator said they would create “unprecedented mass surveillance by banks”.
There is also a danger that people who are put on a risk list by one bank suddenly have nowhere to go for banking. After all, the red cross behind their name is exchanged with other banks exchanged with other banks so that they are also listed there as a risk. Fine if they are(potential) money launderers or terrorists; less fine if , for instance, it is an administrative error. Because we all know what applies to any blacklist: getting on it by accident is easy and getting off it, often a headache.
Then there is the danger of discrimination and exclusion, pointed out by the Council of State . In its opinion, this independent government advisor even suggested scrapping joint monitoring by banks altogether.
16 billion euros in black money
Despite fierce reactions and commitments from the cabinet to take another critical look at the plans, it is clear that the fight against money laundering needs heavier resources. According to the Dutch banking association, “every year in Netherlands an estimated €16 billion of black money goes around every year. The majority is drug trafficking- and fraud-related and therefore a serious social problem (Aanpak Witwassen, s.d.-b).”
However, strokes have been made in recent years, said Professor Brigitte Unger (Utrecht University School of Economics): “The Netherlands has already become less of a paradise location as an international hub for tax evasion and avoidance.” Despite this, companies in the Netherlands are still offered many tax breaks to encourage self-employment; and those benefits unfortunately still attract tax evaders and fraudsters with their letterbox firms. So many, says Unger, that she calls the Netherlands “still a paradise for money laundering” .
Worse than the disease?
Hence this bill, because it is clear that we have a problem in this area in the Netherlands. The question that arises, is whether the remedy is not worse than the disease.
Be that as it may, this proposal and subsequent discussions will not be the last in the fight against money laundering. And safe banking, after all, is what we all want.
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