Bank money laundering efforts increasingly impact on ordinary account holders


Revised draft legislation to allow banks to share information about their clients’ business transactions in order to detect money laundering may still fall foul of concerns about privacy as the impact of tackling criminal activity is beginning to affect ordinary account holders, Trouw reported on Monday.

An earlier version of the legislation proposed by finance mininster Sigrid Kaag had been severely criticised by the Council of State for breaching the privacy of business account holders. Privacy watchdog Autoriteit Persoonsgegevens (AP) also called it ‘a banking dragnet’ and an ‘unprecedented mass surveillance of the Dutch’.

By limiting the amount of information banks can share and by anonymising the data before it can be checked for patterns that may indicate money laundering, Kaag, who presented the new bill to MPs on Friday,  is hoping to alleviate privacy concerns. The AP has yet to study the new legislation.

The banks themselves are beginning to baulk at the cost of detecting fraud, Trouw said.  Hefty fines for failing to follow anti-money laundering laws have prompted banks to employ thousands of people to monitor compliance. According to the Dutch banking association, 20% of bank employers are now working on monitoring clients and their spending patterns.

A business account can cost up to €2,000 a year or even more for sectors where cash dealings are common, such as car repair shops and coffee shops. Some find it hard to open a bank account at all and face restrictions such as a ban on cash transactions.

Dutch central bank DNB has admitted that banks are struggling and that more efficient ways have to be found to detect suspicious money movements.

Last week, online bank Bunq was told it can use artificial intelligence as part of its compliance strategy, against the will of the central bank.

Others are saying the detection of criminal activities should not be done by banks at all, and that the government should play a bigger financial role in tackling them.

‘Combating money laundering is not a ‘core task’ of banks. They are there to serve their clients. The government is saying it is keen to stop money laundering and then puts the onus on banks,’ financial law specialist Frank ’t Hart told the paper.


More money should go to an efficient follow up of reported cases of suspected wrong-doing, experts told the Financieele Dagblad. At the moment the Financial Unit Nederland (FIU), the police and the prosecution department are having to deal with a million possible cases a year, which far exceeds their capacity.

Last year the FIU was notified of €15.4 billion worth of possible criminal transactions of which it was able to seize just €386 million.

The central bank’s policy of ‘when in doubt, report’ not only increases the number of cases but also endangers account holders privacy, former fraud officer Sander Riemslag Baas told the paper. ‘It’s time we had some proportionality.’

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