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04THEHAGUE26 2004-01-07 15:28:00 UNCLASSIFIED Embassy The Hague
Cable title:  

2003-2004 INCSR FOR THE NETHERLANDS - PART II: MONEY

Tags:   KSEP SNAR PTER ECON EFIN ETTC KCRM PREL PGOV NL 
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					  UNCLAS SECTION 01 OF 09 THE HAGUE 000026 

SIPDIS

STATE FOR INL, EUR/ERA, EUR/UBI

TREASURY PLEASE PASS FINCEN

DEPT PASS FEDERAL RESERVE

DEA HQS PASS OFE AND OKF

JUSTICE FOR OIA, AFMLS AND NDDS

PARIS ALSO FOR OECD

E.O. 12958: N/A
TAGS: KSEP SNAR PTER ECON EFIN ETTC KCRM PREL PGOV NL
SUBJECT: 2003-2004 INCSR FOR THE NETHERLANDS - PART II: MONEY
LAUNDERING AND FINANCIAL CRIMES

REF: A) STATE 328024, B) THE HAGUE 00004



1. ATTACHED IS THE HAGUE'S SUBMISSION OF PART II OF THE 2003-
2004 INCSR: MONEY LAUNDERING AND FINANCIAL CRIMES. POST'S
RESPONSE HAS BEEN ORGANIZED ACCORDING TO CHAPTERS PROVIDED IN
THE INCSR QUESTIONNAIRE (REF. A). THE DOLLAR/EURO EXCHANGE
RATE ON JANUARY 5 WAS 0.7880 EUROS TO THE DOLLAR. THE
AVERAGE DOLLAR/EURO EXCHANGE RATES FOR 2000, 2001 AND 2002
STOOD AT 0.9400, 0.900 AND 0.9200 EUROS TO THE DOLLAR
RESPECTIVELY.



2. MONEY LAUNDERING: GENERAL

--THE NETHERLANDS IS A MAJOR FINANCIAL CENTER AND AS SUCH AN
ATTRACTIVE TARGET FOR THE LAUNDERING OF FUNDS GENERATED FROM
A VARIETY OF ILLICIT ACTIVITIES. ACTIVITIES INVOLVING MONEY
LAUNDERING ARE OFTEN RELATED TO THE SALE OF HEROIN, COCAINE,
SYNTHETIC DRUGS OR CANNABIS. SOME OF THE MONEY LAUNDERED IS
PROBABLY LOCALLY OWNED AND DERIVED FROM ILLEGAL PRODUCTION
AND SALE OF CANNABIS PRODUCTS OR DESIGNER DRUGS SUCH AS
ECSTASY. A CONSIDERABLE PORTION OF THE LOCALLY OWNED ILLICIT
MONEY LAUNDERED IS BELIEVED GENERATED THROUGH ACTIVITIES
INVOLVING FINANCIAL FRAUD. MONEY LAUNDERING IS UNDERSTOOD TO
TAKE PLACE THROUGH THE BANKING SYSTEM, MONEY EXCHANGE HOUSES
(CAMBIOS), CASINOS, CREDIT CARD COMPANIES, INSURANCE AND
SECURITIES FIRMS, STOCK BROKERS, MONEY TRANSFER OFFICES,
NOTARIES, LAW FIRMS, REAL ESTATE AGENTS, AND TRADERS IN HIGH-
VALUE GOODS (CARS, ANTIQUES, BOATS, JEWELERY AND PRECIOUS
STONES AND METALS).

--THE NETHERLANDS IS IN FULL COMPLIANCE WITH THE FINANCIAL
ACTION TASK FORCE (FATF) MONEY LAUNDERING AND TERRORIST
FINANCING RECOMMENDATIONS, WITH RESPECT TO BOTH LEGISLATION
AND ENFORCEMENT. THE NETHERLANDS ALSO COMPLIES WITH THE
EUROPEAN UNION'S SECOND MONEY LAUNDERING DIRECTIVE. IN SOME
AREAS, MONEY LAUNDERING LEGISLATION IN THE NETHERLANDS IS
AHEAD OF THE EU-LEGISLATION (E.G. FULL MONEY LAUNDERING
CONTROLS ON MONEY REMITTERS, INCLUDING LICENSING AND
IDENTIFICATION OF CUSTOMERS).

--AS IN MOST OTHER INDUSTRIALIZED COUNTRIES, PART OF THE
MONEY LAUNDERING ACTIVITIES IS DRUGS RELATED, ALTHOUGH EXACT
PERCENTAGES ARE NOT AVAILABLE. MUCH OF THE MONEY LAUNDERED
IN THE NETHERLANDS IS LIKELY OWNED BY MAJOR DRUG CARTELS AND
OTHER INTERNATIONAL CRIMINAL ORGANIZATIONS. THERE ARE NO
INDICATIONS OF SYNDICATE LIKE STRUCTURES IN ORGANIZED CRIME
OR MONEY LAUNDERING. THERE IS VIRTUALLY NO BLACK MARKET FOR
SMUGGLED GOODS IN THE NETHERLANDS. ALTHOUGH, UNDER THE
SCHENGEN ACCORD, THERE ARE NO FORMAL CONTROLS ON THE BORDERS
WITH GERMANY AND BELGIUM, DUTCH AUTHORITIES REMAIN VIGILANT,
RUNNING SPECIAL OPERATIONS DESIGNED TO KEEP SMUGGLING TO A
MINIMUM.

--THE DUTCH EXPERIENCE WITH LAW ENFORCEMENT AND UNUSUAL
TRANSACTION REPORTING PROVIDE NO EVIDENCE THAT MONEY
LAUNDERING IS FOCUSED ON ANY PARTICULAR PART OF THE FINANCIAL
SECTOR. THE DUTCH SYSTEM FOR COMPULSORY REPORTING OF UNUSUAL
TRANSACTIONS TARGETS THE FINANCIAL SECTOR AND NON-BANKING
INSTITUTIONS INCLUDING THE BANKING SYSTEM, MONEY EXCHANGE
HOUSES (CAMBIOS), CASINOS, CREDIT CARD COMPANIES, INSURANCE
AND SECURITIES FIRMS, STOCK BROKERS, MONEY TRANSFER OFFICES,
TRADERS IN HIGH-VALUE ITEMS (PREDOMINANTLY ANTIQUES, CARS,
BOATS, JEWELLERY AND PRECIOUS STONES AND METALS), CIVIL LAW
NOTARIES, ATTORNEYS, INDEPENDENT LEGAL ADVISORS, ACCOUNTANTS,
FINANCIAL ADVISORS, TAX ADVISORS, COMPANY SERVICE PROVIDERS
(INCLUDING TRUST COMPANIES) AND REAL ESTATE AGENTS. WHILE
DATA ABOUT INFORMAL HALWALLA BANKING AS A POTENTIAL MONEY
LAUNDERING SOURCE IS STILL SCARCE, THE ROLE OF FORMAL MONEY
TRANSFER OFFICES (WESTERN UNION AND MONEY GRAM) IN LAUNDERING
ILLICIT MONEY IS RAPIDLY GROWING.

--MONEY LAUNDERING IS NOT A GOVERNMENT POLICY OR PRACTICE,
NOR DOES THE DUTCH GOVERNMENT ENCOURAGE, FACILITATE OR ENGAGE
IN DRUG MONEY LAUNDERING ACTIVITIES. AS GLOBAL PLAYERS,
SEVERAL DUTCH FINANCIAL INSTITUTIONS ENGAGE IN INTERNATIONAL
BUSINESS TRANSACTIONS INVOLVING LARGE AMOUNTS OF UNITED
STATES CURRENCY. THERE ARE, HOWEVER, NO INDICATIONS THAT
SIGNIFICANT PARTS OF DOLLAR TRANSACTIONS BY FINANCIAL
INSTITUTIONS IN THE NETHERLANDS STEM FROM ILLICIT ACTIVITIES.



3. MONEY LAUNDERING: LAWS AND REGULATIONS

--AS OF DECEMBER 2001(GOVERNMENT GAZETTE STB. 2001, 606),
THE DUTCH PENAL CODE (ARTICLES 420BIS, 420TER AND 420QUATER)
TREATS ENCOURAGING, FACILITATING, OR ENGAGING IN MONEY
LAUNDERING, REGARDLESS OF THE ORIGIN OF THE FUNDS INVOLVED,
AS A SEPARATE CRIMINAL OFFENSE. THE PENALTY FOR DELIBERATE
ACTS OF MONEY LAUNDERING IS A MAXIUMUM FOUR YEARS
IMPRISONMENT AND A FINE OF MAXIMUM 45,000 EURO (ROUGHLY
57,000 DOLLARS), WHILE LIABLE ACTS OF MONEY LAUNDERING ARE
SUBJECT TO A PENALTY OF ONE YEAR AT THE MOST AND A FINE OF
MAXIMUM 45,000 EURO. REPEATED CONVICTIONS FOR MONEY
LAUNDERING OFFENSES MAY, FINALLY, BE PUNISHED WITH SIX YEARS
AT THE MOST AND A FINE OF MAXIMUM 45,000 EURO.

--DUTCH MONEY LAUNDERING LEGISLATION COMPLIES WITH THE EU
MONEY LAUNDERING DIRECTIVE AND ALSO RESPONDS TO
RECOMMENDATIONS MADE BY THE FINANCIAL ACTION TASK FORCE
(FATF) ON MONEY LAUNDERING, TO WHICH THE NETHERLANDS BELONGS.
THE EU DIRECTIVE AND THE FATF GUIDELINES HAVE BEEN
IMPLEMENTED IN THE MONEY LAUNDERING DISCLOSURE ACT
(DISCLOSURE ACT) AND THE IDENTIFICATION OF FINANCIAL SERVICES
ACT (THE IDENTIFICATION ACT) RESPECTIVELY.

--IN ADDITION TO CRIMINAL PROSECUTION FOR MONEY LAUNDERING
OFFENCES, MONEY LAUNDERING SUSPECTS CAN ALSO BE CHARGED WITH
PARTICIPATION IN A CRIMINAL ORGANIZATION (ART. 140 OF THE
PENAL CODE), VIOLATION OF FINANCIAL REGULATORY ACTS
(SUPERVISION OF CREDIT INSTITUTIONS ACT (WTK), MONEY SERVICES
ACT (WGT), OR FOR NON-COMPLIANCE WITH THE OBLIGATION TO
DECLARE UNUSUAL TRANSACTIONS ACCORDING TO THE ECONOMIC
OFFENCES ACT (WED). FINALLY, SOME ACTS CONSTITUTE A VIOLATION
OF THE SANCTIONS ACT (PUNISHABLE WITH A MAXIMUM OF SIX YEARS
IMPRISONMENT).

--THE NETHERLANDS HAS COMPREHENSIVE MONEY LAUNDERING
LEGISLATION. THE SERVICES IDENTIFICATION ACT (WID) AND THE
DISCLOSURE OF UNUSUAL TRANSACTIONS ACT (DISCLOSURE ACT) SET
FORTH IDENTIFICATION AND REPORTING REQUIREMENTS FOR ALL
FINANCIAL INSTITUTIONS, INCLUDING BANKS, MONEY EXCHANGE
BUREAUX, CASINOS, CREDIT CARD COMPANIES, INSURANCE FIRMS,
SECURITIES FIRMS, STOCK BROKERS AND MONEY TRANSFER OFFICES.
SINCE 2001, COMPULSORY MONEY LAUNDERING REPORTING
REQUIREMENTS HAVE BEEN EXPANDED TO INCLUDE TRUST COMPANIES,
FINANCING COMPANIES (OF LARGE INTERNATIONAL CONGLOMERATES)
AND TRADERS COMMERCIALLY DEALING IN HIGH VALUE GOODS (E.G,
AIRCRAFT, ANTIQUES, BOATS, JEWELRY AND PRECIOUS STONES AND
METALS). SINCE JUNE OF 2003, NOTARIES, LAWYERS AND LAW
FIRMS, INDEPENDENT LEGAL ADVISORS, ACCOUNTANTS, FINANCIAL AND
TAX ADVISORS, COMPANY SERVICE PROVIDERS AND REAL ESTATE
AGENTS HAVE ALSO BE BROUGHT WITHIN THE AMBIT OF THE
IDENTIFICATION AND REPORTING SYSTEM. ATTORNEY CLIENT
PRIVILEGE WILL EXEMPT LAWYERS FROM REPORTING INVOLVING CASES
UNDER LITIGATION.

--THE DISCLOSURE OF UNUSUAL TRANSACTIONS ACT (WET MOT) AND
THE SANCTIONS ACT MAKE REPORTING OF UNUSUAL TRANSACTIONS
COMPULSORY. ALL FINANCIAL INSTITUTIONS, AS WELL AS OTHER
ENTITIES/INDIVIDUALS COVERED BY THE LAW (AND LOWER
LEGISLATION), MUST PAY SPECIAL ATTENTION TO ALL UNUSUAL
TRANSACTIONS AND PATTERNS OF TRANSACTIONS, WHICH HAVE NO
APPARENT ECONOMIC OR VISIBLE LAWFUL PURPOSE. THE DUTCH
APPROACH IS THUS FOCUSED ON UNUSUAL TRANSACTIONS, INSTEAD OF
THE MORE RESTRICTED CONCEPT OF SUSPICIOUS TRANSACTIONS.
FINANCIAL INSTITUTIONS, AND OTHER ENTITIES, MUST REPORT
TRANSACTIONS AS UNUSUAL, EVEN IN THE ABSENCE OF DIRECT MONEY
LAUNDERING SUSPICION.

--THE MONEY LAUNDERING REPORTING REQUIREMENTS FOR UNUSUAL
TRANSACTIONS ARE BASED ON LISTS OF OBJECTIVE INDICATORS
(CASES OF COMPULSORY REPORTING, MOSTLY DEFINED BY
QUANTITATIVE THRESHOLDS), AS WELL AS SUBJECTIVE INDICATORS
(REPORTING UP ON THE BASIS OF SUBJECTIVE OBSERVATIONS BY THE
INSTITUTIONS). THE DUTCH FIU, THE MELDPUNT ONGEBRUIKELIJKE
TRANSACTIES (MOT), RECEIVES, RECORDS, PROCESSES AND ANALYSES
ALL INCOMING REPORTS OF UNUSUAL TRANSACTIONS. UNUSUAL
TRANSACTIONS IDENTIFIED AS SUSPICIOUS ARE PASSED ON TO THE
POLICE INVESTIGATION SERVICE FOR FURTHER INVESTIGATION. SINCE
THE MONEY LAUNDERING DETECTION SYSTEM ALSO COVERS AREAS
OUTSIDE THE FINANCIAL SECTOR, THE SYSTEM IS USED ALSO FOR THE
TRACING OF TERRORIST FINANCING.

--THE DISCLOSURE OF UNUSUAL TRANSACTION ACT (WET MOT)
PROTECTS REPORTING INSTITUTIONS (AND THEIR EMPLOYEES) FROM
CRIMINAL OR CIVIL LIABILITY FOR BREACHING OF ANY RESTRICTION
ON DISCLOSURE OF INFORMATION IMPOSED BY CONTRACT OR BY ANY
LEGISLATIVE, REGULATORY OR ADMINISTRATIVE PROVISIONS. ALL
FINANCIAL INSTITUTIONS, AND OTHER ENTITIES, THAT ARE SUBJECT
TO THE DISCLOSURE OF UNUSUAL TRANSACTIONS ACT ARE SUPERVISED
FOR THEIR COMPLIANCE WITH THE MOT ACT. VIOLATION OF THE MOT
ACT, DEALT WITH IN THE ECONOMIC OFFENCES ACT, MAY LEAD TO
CRIMINAL PROSECUTION.

--DUTCH BANKS AND OTHER FINANCIAL INSTITUTIONS ARE REQUIRED
BY LAW TO MAINTAIN, FOR A PERIOD OF FIVE YEARS, RECORDS
NECESSARY TO RECONSTRUCT SIGNIFICANT FINANCIAL TRANSACTIONS,
AND TO RESPOND QUICKLY TO REQUESTS FOR INFORMATION FROM
GOVERNMENT ENTITIES IN CRIMINAL CASES.

--THE DUTCH FIU, THE MELDPUNT ONGEBRUIKELIJKE TRANSACTIES
(MOT), WAS ESTABLISHED IN 1994. MOT RECEIVES OVER 90 PERCENT
OF UNUSUAL TRANSACTION REPORTS ELECTRONICALLY THRU ITS SECURE
WEBSITE (MOT WEB). SUBSEQUENT DATA ANALYSIS INCLUDES FULLY
AUTOMATIC MATCHES WITH POLICE DATABASES (VROS), AS WELL AS
OTHER MORE SPECIFIC RESEARCH INSTRUMENTS BASED ON A VARIETY
OF SOURCES AND KNOW-HOW. WHEN UNUSUAL TRANSACTIONS ARE
CLASSIFIED AS `SUSPICIOUS', THEY ARE REPORTED TO LAW
ENFORCEMENT BRANCHES AND PUT ON THE INTRANET VERDACHTE
TRANSACTIES (IVT) (INTRANET SUSPICIOUS TRANSACTIONS).
INFORMATION ON THE IVT INTRANET IS AVAILABLE TO ALL POLICE
SERVICES FOR USE VARIOUS PURPOSES INCLUDING CRIMINAL
PROSECUTIONS. COPIES OF ALL SUSPICIOUS TRANSACTIONS ARE
PASSED TO THE BUREAU FOR LAW ENFORCEMENT SUPPORT OF THE
NATIONAL PROSECUTOR (BLOM).

--THE TOTAL NUMBER OF UNUSUAL FINANCIAL TRANSACTION REPORTS
RECEIVED BY THE MOT IN 2002 ALMOST DOUBLED (UP 81 PERCENT)
FROM 2001 TO OVER 137 THOUSAND. THE MOT CLASSIFIED A TOTAL
OF CLOSE TO 24 THOUSAND UNUSUAL TRANSACTIONS AS SUSPICIOUS
FOR FURTHER INVESTIGATION BY THE BLOM. THE SHARP INCREASE IN
UNUSUAL TRANSACTION REPORTSI IS THE RESULT CHIEFLY OF A
STEADY RISE IN UNUSUAL TRANSACTION REPORTS REPORTED BY MONEY
TRANSFERS OFFICES, NOTABLY TRANSFERS MADE THROUGH PROVIDERS
LIKE WESTERN UNION AND MONEY GRAM. In 2002, BLOM PREPARED A
TOTAL OF 120 HIT-AND-RUN-ANTI MONEY-LAUNDERING (HARM)
ACTIONS, RESULTING IN THE CONFISCATION OF CLOSE TO CLOSE TO
30 MILLION EURO (ROUGHLY 32 MILLION DOLLARS), AND THE ARREST
OF 192 SUSPECTS. IN ADDITION TO PREPARING THE HARM FILES,
BLOM INITIATED 322 OTHER MONEY LAUNDERING INVESTIGATIONS.
BLOM ALSO TREATED 518 DEMANDS FOR INFORMATION BY POLICE
REGIONAL/LOCAL POLICE SERVICES, RELATING TO MORE THAN THREE
THOUSAND TRANSACTIONS. THE BLOM ALSO ASSISTED IN 614
REQUESTS FOR INTERNATIONAL MUTUAL LEGAL ASSISTANCE.

--ESTABLISHED IN 1999, THE BLOM IS THE SUCCESSOR OF THE
FINANCIAL POLICE FINPOL. THE BLOM ASSISTS THE NATIONAL AML
PUBLIC PROSECUTOR BY ANALYSING SUSPICIOUS TRANSACTIONS PASSED
ON BY THE MOT, PROVIDING POLICE SERVICES WITH INFORMATION AND
INTELLIGENCE IN THE FIELD OF AML (BOTH VOLUNTARY AND ON
DEMAND), AND PREPARING AML INVESTIGATIONS FOR OTHER POLICE
SERVICES.

--THE MOT (STAFF OF MORE THAN 25, NOT INCLUDING STAFF
ASSIGNED TO EUROPEAN COMMISSION'S PHARE-AML PROJECT), AND THE
BLOM (STAFF IN EXCESS OF 25) RELY ON A HIGHLY TRAINED AND
SCREENED WORKFORCE THAT IS SLATED FOR RAPID EXPANSION. BOTH
MOT AND BLOM ARE INTERNATIONALLY RECOGNIZED INSTITUTIONS THAT
PLAY A MAJOR ROLE IN THE EGMONT GROUP OF FIU'S. THE MOT
SUPERVISES THE PHARE-PROJECT ON MONEY LAUNDERING FOR THE
EUROPEAN UNION. THE MOT HAS ALSO ESTABLISHED, AND MONITORS,
THE FIU.NET PROJECT (AN ELECTRONIC EXCHANGE OF INFORMATION
CURRENTLY BETWEEN EUROPEAN FIU'S BY MEANS OF A SECURE WEB).
THE BLOM'S ANALYSIS TOOL "WINSTON" (INCLUDING ITS DATABASE)
IS CURRENTLY ALSO BEING USED BY THE ANTI-MONEY LAUNDERING
DIVISION OF EUROPOL.

--FINANCIAL INSTITUTIONS CANNOT BE PROSECUTED ON THE BASIS
OF THE INFORMATION PROVIDED AS A RESULT OF THEIR REPORTING
OBLIGATIONS. FINANCIAL INSTITUTIONS ARE PROTECTED AGAINST
CIVIL LAW SUITS RESULTING FROM DISCLOSURE BY CRIMINAL AND
CIVIL SAFEGUARDS. THERE ARE NO SECRECY LAWS OR FISCAL
REGULATIONS THAT KEEP DUTCH BANKS FROM DISCLOSING CLIENT
OWNERSHIP INFORMATION TO BANK SUPERVISORS AND LAW ENFORCEMENT
AUTHORITIES. THE PROBLEM OF INTERNATIONAL TRANSPORT OF
ILLICIT CURRENCY AND MONETARY INSTRUMENTS IS DEALT WITH IN
THE MONEY LAUNDERING GUIDELINES FOR BANKING AND SECURITIES
TRANSACTIONS. FURTHERMORE, CURRENT LEGISLATION ALSO REQUIRES
CUSTOMS AUTHORITIES TO REPORT UNUSUAL TRANSACTIONS TO THE
MONEY LAUNDERING DISCLOSURE OFFICE (MOT). HOWEVER, THE DUTCH
DO NOT CURRENTLY HAVE A CURRENCY DECLARATION REQUIREMENT FOR
INCOMING TRAVELLERS.

--ACCORDING TO NETHERLANDS CENTRAL BANK BALANCE OF PAYMENTS
REPORTING INSTRUCTIONS OF 2003, A GROUP OF SELECTED COMPANIES
ARE REQUIRED TO REPORT CERTAIN TRANSACTIONS (IRRESPECTIVE OF
THE AMOUNT AND INCLUDING CROSS-BORDER TRANSACTIONS) DIRECTLY
TO THE CENTRAL BANK (DIRECT REPORTING). THE BALANCE OF
PAYMENTS REPORTING INSTRUCTIONS OF 2003 HAVE REPLACED THE
GENERAL REPORTING INSTRUCTIONS FOR EXTERNAL PAYMENTS IN PLACE
SINCE 2000. THE LATTER REQUIRED DUTCH CITIZENS TO REPORT
CROSS-BORDER TRANSACTIONS IN EXCESS OF 2,500 EURO (ROUGHLY
3,172 DOLLARS). BANKS SUBSEQUENTLY REPORT THESE TRANSACTIONS
TO THE NETHERLANDS CENTRAL BANK (INDIRECT REPORTING). IN
COMPLIANCE WITH THE DISCLOSURE OF UNUSUAL TRANSACTIONS ACT,
THE NETHERLANDS CENTRAL BANK WILL REPORT SUSPICIOUS
TRANSACTIONS TO THE FINANCIAL INTELLIGENCE UNIT (FIU).

--THE DISCLOSURE ACT, THE SANCTIONS ACT, AND THE SERVICES
IDENTIFICATION ACT (WID) IMPOSE THE OBLIGATION TO REPORT AND
IDENTIFY CLIENTS, AND TO KEEP RECORDS OF TRANSACTIONS AND OF
IDENTIFIED CLIENTS. THE ECONOMIC OFFENSES ACT (WED)
STIPULATES THAT ANYONE REFUSING TO COMPLY WITH THE OBLIGATION
TO DISCLOSE UNUSUAL TRANSACTIONS AND PROVIDE IDENTIFICATION
IS COMMITTING AN OFFENSE AND LIABLE TO A FINE OR
IMPRISONMENT. THEREFORE, "DUE DILIGENCE" OR "BANKER
NEGLIGENCE" LEGISLATION IS NOT NEEDED.

--DUTCH CRIMINAL LAW ADDRESSES INDIVIDUAL AND CORPORATE
LIABILITY, WHICH CAN BE APPLIED TO ACTING MANAGERS
INDIVIDUALLY (ARTICLE 51 OF THE PENAL CODE). MORE
IMPORTANTLY, THERE IS SUPERVISION FOR COMPLIANCE OF ALL LAWS
MENTIONED. REGULAR PRUDENTIAL SUPERVISION ON ALL FINANCIAL
INSTITUTIONS (INCLUDING NON-BANKING FINANCIAL INSTITUTIONS
NBFI'S) ALSO CONTAINS AN INTEGRITY COMPONENT.

--MONEY LAUNDERING CONTROLS APPLY TO ALL NON-BANKING
FINANCIAL INSTITUTIONS, INCLUDING MONEY EXCHANGE HOUSES
(CAMBIOS), CASINOS, CREDIT CARD COMPANIES, INSURANCE AND
SECURITIES COMPANIES, STOCKBROKERS AND MONEY TRANSFER
OFFICES. THESE CONTROLS INCLUDE SCREENING COMPANY OFFICERS
FOR INTEBRITY. IN COMPLIANCE WITH THE EU'S SECOND ANTI MONEY
LAUNDERING DIRECTIVE, LEGISLATION MAKING CONTROLS ON MONEY
LAUNDERING ACTIVITIES (INCLUDING IDENTIFICATION AND REPORTING
OBLIGATIONS AND SUPERVISION) APPLICABLE ALSO TO NOTARIES,
LAWYERS AND LAW FIRMS, INDEPENDENT LEGAL ADVISORS,
ACCOUNTANTS, FINANCIAL ADVISORS, TAX ADVISORS, REAL ESTATE
AGENTS AND TRADERS IN HIGH-VALUE GOODS (ANTIQUES, ARTS, CARS,
YACHTS) HAS BEEN IMPLEMENTED SINCE JUNE OF 2003. COMPANY
SERVICE PROVIDERS - ALTHOUGH NOT MENTIONED EXPLICITLY IN THE
EU AML DIRECTIVE - HAVE ALSO BE COVERED BY DUTCH MONEY
LAUNDERING LEGISLATION.

--THE BANKING COMMUNITY IS LARGELY SUPPORTIVE OF ANTI MONEY
LAUNDERING EFFORTS. ALTHOUGH THE BANKING COMMUNITY REMAINS
CRITICAL OF THE EXTRA BURDEN THAT REPORTING OBLIGATIONS
IMPOSE ON THE FINANCIAL SECTOR, BANKS NOW FULLY COMPLY WITH
THE MONEY LAUNDERING REPORTING REQUIREMENTS. THERE ARE NO
INDICATIONS THAT MONEY LAUNDERING REPORTING REQUIREMENTS HAVE
ADVERSELY AFFECTED DUTCH FINANCIAL INSTITUTIONS. NEITHER IS
THERE ANY INDICATION OF A DECLINE IN BANKING DEPOSITS AS A
RESULT OF MONEY LAUNDERING LEGISLATION.



4. TERRORIST FINANCING

--THE NETHERLANDS HAS AN `ALL OFFENSES' REGIME FOR PREDICATE
OFFENCES OF MONEY LAUNDERING, MEANING THAT ANY TERRORIST
CRIME WILL AUTOMATICALLY QUALIFY AS A PREDICATE OFFENSE.
FINANCING OF TERRORIST ACTIVITIES IS SUBJECT TO ARTICLE 46 OF
THE DUTCH PENAL CODE AS AMENDED DECEMBER 17, 2001 (GOVERNMENT
GAZETTE STB. 2001, 675). LEGISLATION INCREASING THE PENALTIES
FOR TERRORIST FINANCING WAS PASSED BY THE SECOND CHAMBER OF
PARLIAMENT AND IS NOW PENDING BEFORE THE UPPER CHAMBER; IT IS
EXPECTED.TO PASS AND GO INTO EFFECT BY MID 2004.

--FOLLOWING THE 9/11 EVENTS, THE NETHERLANDS AMENDED ITS
NATIONAL SANCTIONS ACT TO IMPLEMENT UNSC 1373 AND EU
REGULATION 2580/2001. THIS PROVIDED THE LEGAL BASIS TO
FREEZE THE ASSETS OF LISTED TERRORISTS, TERRORIST
ORGANIZATIONS AND THEIR SUPPORTERS. PARLIAMENTARY
RATIFICATION OF AMENDED SANCTIONS LEGISLATION TOOK PLACE JUNE
7, 2002. INVOLVEMENT IN FINANCIAL TRANSACTIONS WITH
INDIVIDUALS AND/OR ORGANIZATIONS DESIGNATED NATIONALLY, BY
THE EU, OR UN LISTS HAS BEEN MADE A CRIMINAL OFFENSE.
VIOLATION OF THE SANCTIONS ACT IS PUNISHABLE AS A (ECONOMIC)
CRIMINAL OFFENSE. IF THE NETHERLANDS INTELLIGENCE AND
SECURITY SERVICE (AIVD) HAS AN INDICATION THAT AN
INDIVIDUAL/ORGANIZATION SUPPORTS AN ENTITY ON THE LIST, IT
CAN PASS THE INFORMATION TO THE PUBLIC PROSECUTOR DEALING
WITH TERRORIST CASES. THE PUBLIC PROSECUTOR CAN ACT (ON THE
BASIS OF CRIMINAL LAW) ACCORDING TO ITS DISCRETIONARY POWERS.
IF THE POLICE HAVE SPECIFIC INFORMATION THAT THE SANCTIONS
ACT HAS BEEN VIOLATED, THE PUBLIC PROSECUTOR CAN START A
CRIMINAL INVESTIGATION INDEPENDENTLY.

--THE NETHERLANDS HAS THE AUTHORITY TO IDENTIFY, FREEZE AND
SEIZE TERRORIST FINANCE ASSETS. THIS AUTHORITY IS BASED ON
THE SANCTIONS ACT, ORIGINALLY ADOPTED IN 1977, AND AMENDED ON
JUNE 7, 2002. THE SANCTIONS ACT ALLOWS MEASURES TO BE TAKEN
AGAINST INDIVIDUALS OR ORGANIZATIPONS ON THE BASIS OF
TERRORIST SUSPICION. THE LAW REQUIRES SANCTIONS TO BE IMPOSED
WITHIN AN INTERNATIONAL CONTEXT. ANOTHER LEGAL BASIS FOR
FREEZING TERRORIST ASSETS ARE THE RELEVANT EU REGULATIONS
COVERING TERRORIST FINANCING. THESE HAVE DIRECT LEGAL POWER
IN THE NETHERLANDS, AND SEVERAL ENTITIES HAVE BEEN PUT ON THE
FREEZE LIST ON THAT BASIS. TERRORIST ASSETS HAVE BEEN FROZEN
BASED ON THE AUTHORITY PROVIDED BY THE SANCTIONS ACT AND THE
EU DIRECTIVES. THE NETHERLANDS DISTRIBUTES LISTS OF ENTITIES
WHOSE ASSEST MUST BE FROZEN) TO FINANCIAL INSTITUTIONS AND
RELEVANT GOVERNMENT BODIES (INCLUDING LOCAL TAX AUTHORITIES).

--DUTCH AUTHORITIES AND US OFFICIALS ARE WORKING TOGETHER
CLOSELY IN FIGHTING TERRORIST FINANCING. TO FACILITATE
COORDINATION AND COMMUNICATION OF TERRORIST FINANCING
MEASURES WITH THE FINANCIAL SECTOR, A WORKING GROUP HAS BEEN
ESTABLISHED CONSISTING OF GOVERNMENT ENTITIES INVOLVED IN
DRAWING UP LISTS OF TERRORISTS (MINISTRY OF FOREIGN AFFAIRS,
MINISTRY OF JUSTICE, MINISTRY OF FINANCE, NETHERLANDS
INTELLIGENCE AND SECURITY SERVICES, PUBLIC PROSECUTOR,
FINANCIAL SECTOR SUPERVISORS).

--FINANCIAL INSTITUTIONS SCREEN LISTS OF CUSTOMERS ON A
TIMELY BASIS. EXACT HITS AUTOMATICALLY LEAD TO FREEZING OF
ALL ACCOUNTS OF THE CUSTOMER. PERSONAL INFORMATION AND
TRANSACTION RECORDS ARE SUBSEQUENTLY FORWARDED TO THE SECRET
SERVICE (AIVD) THROUGH THE MINISTRY OF FINANCE AND THE
FINANCIAL MARKETS SUPERVISORS. THE NETHERLANDS HAS FROZEN
MORE TERRORIST RELATED ASSETS THAN ANY OTHER EU MEMBER STATE.

--THE MONEY SERVICES ACT, WHICH REGULATES AND FACILITATES
(INTEGRITY) SUPERVISION FOR BOTH MONEY REMITTANCE SYSTEMS AND
MONEY EXCHANGERS, TOOK EFFECT ON JUNE 2001. THE LAW
EXPLICITLY FORBIDS UNLICENSED MONEY SERVICES. ALL ENTITIES
AND/OR INDIVIDUALS ENGAGED IN MONEY TRANSFERS HAVE TO
REGISTER FOR SUPERVISION BY THE NETHERLANDS CENTRAL BANK. TO
THIS END THE MANAGERS OF THE ENTITY OR THE INDIVIDUALS ARE
SCREENED BY THE CENTRAL BANK. THE DETECTION OF ILLICIT MONEY
SERVICE ENTITIES IS THE RESPONSIBILITY CHIEFLY OF THE DUTCH
POLICE AND THE ECONOMIC AND FISCAL INVESTIGATION SERVICE
(FIOD).

--SINCE JANUARY OF 2002 DEALERS IN HIGH VALUE GOODS,
INCLUDING CARS, BOATS, JEWELLERY, DIAMONDS, PRECIOUS METALS
AND GEMS, ARE REQUIRED BY LAW TO REPORT UNUSUAL TRANSACTIONS
TO THE DUTCH FIU (OFFICE FOR THE DISCLOSURE OF UNUSUAL
TRANSACTIONS MOT.) THE REQUIREMENT ENTAILS AN OBLIGATION TO
REPORT ANY TRANSACTION INVOLVING A CASH PAYMENT OF 15
THOUSAND EURO (ROUGHLY 19 DOLLARS) OR MORE. TRANSACTIONS
THAT, UNDER THE CIRCUMSTANCES, ARE CONSIDERED UNUSUAL OR
SUSPICIOUS MUST ALSO BE REPORTED. REPORTS MUST INCLUDE A
DETAILED DESCRIPTION OF THE TRANSACTION AS WELL AS FULL
IDENTIFICATION OF THE CUSTOMER/CLIENT.

--UNUSUAL TRANSACTIONS REPORTED BY THE FINANCIAL SECTOR IS
THE FIRST FILTER AGAINST THE ABUSE OF RELIGIOUS
ORGANIZATIONS, FOUNDATIONS AND CHARITABLE INSTITUTIONS FOR
TERRORIST FINANCING. NO INDIVIDUAL OR LEGAL ENTITY (CHURCHES
OR RELIGIOUS INSTITUTIONS INCLUDED) IS EXEMPT FROM THE
OBLIGATION OF IDENTIFICATION WHEN USING THE FINANCIAL SYSTEM.
FINANCIAL INSTITUTIONS WILL ALSO HAVE TO MAKE INQUIRIES AS TO
THE IDENTITY OF THE ULTIMATE BENEFICIAL OWNERS. A PAPER TRAIL
IS THUS MAINTAINED THROUGHOUT THE PAYMENT CHAIN.

--A SECOND FILTER IS PROVIDED BY DUTCH CIVIL LAW
(HANDELSREGISTERWET) THAT REQUIRES REGISTRATION OF ALL ACTIVE
FOUNDATIONS - THE MOST APPROPRIATE FORM OF LEGAL ENTITY TO BE
USED FOR CHARITABLE ORGANIZATIONS- IN THE REGISTERS OF THE
CHAMBERS OF COMMERCE. EACH FOUNDATION'S FORMAL STATUTES
(CREATION OF THE FOUNDATION MUST BE CERTIFIED BY A NOTARY OF
LAW) MUST BE SUBMITTED TO THE CHAMBERS.

--THE OBLIGATION THAT CHARITABLE INSTITUTIONS REGISTER WITH,
AND REPORT TO, THE TAX AUTHORITIES IN ORDER TO QUALIFY FOR
FAVOURABLE TAX TREATMENT (REDUCED GIFT TAXES, DEDUCTION OF
DONATIONS) ACTS AS A THIRD FILTER. APPROXIMATELY 15 THOUSAND
ORGANIZATIONS (AND THEIR MANAGEMENT) THAT SERVE A PUBLIC
PURPOSE ARE REGISTERED IN THIS WAY. THE ORGANIZATIONS HAVE TO
FILE THEIR STATUTES, SHOWING THEIR PURPOSE AND MODE OF
OPERATIONS, AND SUBMIT ANNUAL REPORTS. SAMPLES ARE TAKEN FOR
AUDITING.

--FINALLY, MANY DUTCH CHARITIES ARE REGISTERED WITH OR
MONITORED BY PRIVATE WATCHDOG ORGANIZATIONS OR SELF-
REGULATORY BODIES, THE MOST IMPORTANT OF WHICH IS THE CBF
(CENTRAL BUREAU FOR FUND RAISING).



5. OFFSHORE FINANCIAL CENTERS

--THE NETHERLANDS IS NOT AN OFFSHORE FINANCIAL CENTER IN THE
SENSE OF AN INTERNATIONAL CENTER PROVIDING ATTRACTIVE
FINANCIAL AND CORPORATE SERVICES TO NON-RESIDENTS.



6. INTERNATIONAL COOPERATION

--THE UNITED STATES ENJOYS GOOD COOPERATION WITH THE
NETHERLANDS IN FIGHTING INTERNATIONAL CRIME, INCLUDING MONEY
LAUNDERING. THE DUTCH OFFICE FOR THE DISCLOSURE OF UNUSUAL
TRANSACTIONS (MOT) HAS ESTABLISHED CLOSE LINKS WITH THE U.S.
FINCEN, WHILE THE MOT IS ALSO INVOLVED IN EFFORTS TO EXPAND
INTERNATIONAL COOPERATION BETWEEN DISCLOSURE OFFICES.

--ADEQUATE RECORDS ARE MADE AVAILABLE OFFICIALLY TO
APPROPRIATE USG PERSONNEL THROUGH OUR MUTUAL LEGAL ASSISTANCE
TREATY (MLAT) WITH THE NETHERLANDS. U.S. AUTHORITIES
COOPERATE CLOSELY WITH THE DIENST NATIONALE RECHERCHE
INFORMATIE (DIN) AND WITH THE DUTCH INTERNAL REVENUE SERVICE
INVESTIGATION OFFICE (FIOD).

--THE NETHERLANDS HAS RATIFIED THE 1988 UN CONVENTION AND
THE 1990 CONVENTION OF STRASBOURG ON MONEY LAUNDERING AND
CONFISCATION. THE NETHERLANDS IS ACTIVE IN THE FINANCIAL
ACTION TASK FORCE, WHICH IT CHAIRED IN 1994/95; THE CARIBBEAN
FINANCIAL ACTION TASK FORCE (CFATF); AND THE UN COMMISSION ON
NARCOTIC DRUGS, WHICH IT CHAIRED IN 1991. THE NETHERLANDS IS
A MEMBER OF THE MAJOR DONORS GROUP OF THE UNDCP AND AN
IMPORTANT CONTRIBUTOR TO EU COUNTER-NARCOTICS EFFORTS. THE
DUTCH ARE ALSO MEMBERS OF THE EGMONT GROUP OF FINANCIAL
INTELLIGENCE UNITS (FIUS) FOR THE EXCHANGE OF KNOW-HOW AND
EXPERIENCE IN THE FIGHT AGAINST MONEY LAUNDERING. THE DUTCH
HOSTED AND CHAIRED THE EGMONT PLENARY IN 2001 AND PROVIDE
PERMANENT ADMINISTRATIVE SUPPORT TO THE GROUP. THE DUTCH MOT
IS THE MAIN CONTRACTOR FOR THE SECOND ANTI-MONEY LAUNDERING
PROJECT UNDER AUSPICES OF THE PHARE "MULTI-COUNTRY" PROGRAM
OF THE EUROPEAN COMMISSION. THE NETHERLANDS RATIFIED THE 1999
UN CONVENTION FOR THE SUPPRESSION OF FINANCING OF TERRORISM
AND THE 1997 UN CONVENTION FOR THE SUPPRESSION OF TERRORIST
BOMBINGS. THE NETHERLANDS IS A PARTY TO THE 2000 PALERMO
CONVENTION ON TRANS BOUNDARY ORGANIZED CRIME. THE DUTCH
COOPERATE WITH THE U.S. AND OTHER GOVERNMENTS IN
INVESTIGATING FINANCIAL CRIMES.

--THE CENTRAL BANK OF THE NETHERLANDS (DE NEDERLANDSCHE BANK
N.V.), THE FINANCIAL MARKETS AUTHORITY (AUTORITEIT FINANCIELE
MARKTEN AFM) AND THE PENSION AND INSURANCE CHAMBER (PENSIOEN
EN VERZEKERINGS KAMER PVK), AS THE SUPERVISORS OF THE DUTCH
FINANCIAL SECTOR (BANKS, STOCKMARKET, COLLECTIVE PENSION
SYSTEMS, INSURANCE AND SECURITY SECTOR, MONEY EXCHANGE
BUSINESS, MONEY TRANSFER INSTITUTIONS AND CREDIT CARD
COMPANIES) REGULARLY EXCHANGE INFORMATION NATIONALLY AND
INTERNATIONALLY. SHARING OF INFORMATION BY DUTCH SUPERVISORS
DOES NOT REQUIRE FORMAL AGREEMENTS OR MOU'S. BUT WHERE
REQUIRED, MOU'S HAVE BEEN AGREED. DUTCH FINANCIAL SECTOR
SUPERVISORS ARE IN COMPLIANCE WITH FATF, BASEL, IAIS AND
IOSCO REQUIREMENTS. PLANS TO MERGE THE SUPERVISORY
ACTIVITIES OF THE PENSION AND INSURANCE CHAMBER (PVK) WITH
THAT OF THE NETHERLANDS CENTRAL BANK ARE WELL ADVANCED.

--DUTCH AUTHORITIES COOPERATE WITH U.S. AGENCIES ON MAJOR
MONEY LAUNDERING CASES. THIS COOPERATION HAS RESULTED IN
SIGNIFICANT SEIZURES OF ASSETS IN BOTH COUNTRIES. DESPITE
DIFFERENT CRIMINAL PROCEDURE SYSTEMS, MUTUAL LEGAL ASSISTANCE
BETWEEN THE US AND THE NETHERLANDS IS STRONG. WE KNOW OF NO
INSTANCES WHERE THE GOVERNMENT OF THE NETHERLANDS HAS REFUSED
TO COOPERATE WITH USG OR FOREIGN GOVERNMENTS IN EXCHANGING
INFORMATION, NOR ARE WE AWARE OF ANY ACTION BY THE USG OR
INTERNATIONAL ORGANIZATIONS AGAINST SUCH REFUSAL.

--THE MOT EXCHANGES INFORMATION FREELY WITH RECOGNISED
FIU'S, ON AN AD-HOC BASIS. THIS MAKES IT POSSIBLE TO DEVELOP
AND PROMOTE THE FIU.NET. MOT HAS ALSO CONCLUDED FORMAL MOU'S
WITH BELGIUM, ARUBA AND THE NETHERLANDS ANTILLES, ALTHOUGH
THESE ARE NOT NECESSARY TO EXCHANGE MOT INFORMATION UNDER
DUTCH LAW. THE BLOM CAN EXCHANGE INFORMATION ON THE BASIS OF
MUTUAL LEGAL ASSISTANCE REQUESTS.

--THE U.S. AND THE NETHERLANDS HAVE AN AGREEMENT ON ASSET
SHARING DATING BACK TO 1994. RECORDS RELATED TO EXTRADITION
AND LEGAL ASSISTANCE IS BEING MADE AVAILABLE OFFICIALLY TO
APPROPRIATE USG PERSONNEL THROUGH THE U.S. MUTUAL LEGAL
ASSISTANCE TREATY (MLAT) WITH THE NETHERLANDS.



7. ASSET FORFEITURE AND SEIZURE LEGISLATION

--THE NETHERLANDS HAS ENACTED LEGISLATION GOVERNING ASSET
FORFEITURES. DUTCH AUTHORITIES ARE ABLE TO IDENTIFY, TRACE,
FREEZE, AND SEIZE FORFEITED NARCOTICS-RELATED ASSETS.
IMPLEMENTING THE STRASBOURG CONVENTION, THE ASSET SEIZURE AND
CONFISCATION ACT OF DECEMBER 10, 1992 WENT INTO EFFECT IN
MARCH OF 1993. THE 1992 ASSET SEIZURE AND CONFISCATION ACT
ENABLES THE AUTHORITIES TO CONFISCATE ASSETS THAT ARE
ILLICITLY OBTAINED OR OTHERWISE CONNECTED TO CRIMINAL ACTS. A
1998 EVALUATION OF CURRENT SEIZURES AND FORFEITURE
LEGISLATION CONCLUDED THAT, ALTHOUGH NO MAJOR CHANGES IN
ASSET SEIZURE LEGISLATION ARE REQUIRED, MINOR ADJUSTMENTS
HAVE BEEN ADVISED TO IMPROVE THE EFFECTIVENESS OF THE ACT.
UNDER DUTCH LEGISLATION, THERE IS NO NEED TO CREATE A
SPECIFIC LEGAL BASIS FOR SHARING OF SEIZED ASSETS. HOWEVER,
SOME COUNTRIES PREFER A FORMAL TREATY AS A LEGAL BASIS. THE
NETHERLANDS HAS A TREATY ON ASSET SHARING WITH THE US AND
WITH THE UK. ASSET SHARING NEGOTIATIONS WITH CANADA ARE
PENDING.
--THE 1992 ASSET SEIZURE AND CONFISCATION ACT APPLIES TO THE
SEIZURE AND CONFISCATION OF PROCEEDS OF ALL CRIMES. THE
SYSTEM IS PRINCIPALLY VALUE BASED, THROUGH PROPERTY BASED
ORDERS CAN ALSO BE MADE. ANY TANGIBLE ASSETS, SUCH AS REAL
ESTATE OR OTHER CONVEYANCES THAT WERE PURCHASED DIRECTLY WITH
THE PROCEEDS OF A CRIME TRACKED TO ILLEGAL ACTIVITIES, MAY BE
SEIZED. PROPERTY SUBJECT TO CONFISCATION AS AN
INSTRUMENTALITY MAY CONSIST OF BOTH MOVEABLE PROPERTY AND
CLAIMS. ASSETS CAN BE SEIZED AS A VALUE-BASED CONFISCATION.

--ASSET SEIZURE AND CONFISCATION LEGISLATION ALSO PROVIDES
FOR THE SEIZURE OF ADDITIONAL ASSETS CONTROLLED BY
TRAFFICKERS. LEGISLATION DEFINES PROPERTY FOR THE PURPOSE OF
CONFISCATION AS "ANY OBJECT AND ANY PROPERTY RIGHT." PROCEEDS
FROM NARCOTICS ASSET SEIZURES AND FORFEITURES ARE DEPOSITED
IN THE GENERAL FUND OF THE MINISTRY OF FINANCE. NEITHER THE
DUTCH NOR U.S. AUTHORITIES HAVE IDENTIFIED ANY SIGNIFICANT
LEGAL LOOPHOLES THAT ALLOW TRAFFICKERS TO SHIELD ASSETS.
DUTCH LEGISLATION ALLOWS THE GOVERNMENT TO FORFEIT SEIZED
ASSETS. DUTCH LAW ALLOWS FOR CRIMINAL FORFEITURE. TO REMOVE
ANY EXISTING OBSTACLES, AND TO IMPROVE AND STRENGTHEN THE
OPTIONS FOR IDENTIFYING, FREEZING AND SEIZING CRIMINAL ASSETS
IN GENERAL, LEGISLATION WAS AMENDED IN 2003.



8. ASSET SEIZURE ENFORCEMENT

--THE GON ENFORCES DRUG-RELATED ASSET SEIZURE AND FORFEITURE
LEGISLATION THAT CAME INTO EFFECT IN MARCH OF 1993. DUTCH
GOVERNMENT ENTITIES RESPONSIBLE FOR ENFORCEMENT IN THIS AREA
INCLUDE THE POLICE AND SEVERAL SPECIAL INVESTIGATION
SERVICES. THESE ENTITIES HAVE ADEQUATE POWERS AND RESOURCES
TO TRACE AND SEIZE ASSETS. SPECIAL LAW ENFORCEMENT UNITS ARE
CURRENTLY BEING ESTABLISHED IN THE AREA OF FINANCIAL
INVESTIGATION METHODS TO BETTER EQUIP THE POLICE FORCE, THE
SPECIAL INVESTIGATION SERVICES AND THE PUBLIC PROSECUTORS
WITH REGARD TO IDENTIFYING, TRACING, FREEZING AND SEIZING
CRIMINAL ASSETS.

--DUTCH CRIMINAL LAW PROVIDES AMPLE OPPORTUNITY TO SEIZE AND
CONFISCATE CRIMINAL ASSETS (ART. 36E PENAL CODE). IN ORDER TO
PROMOTE THE CONFISCATION OF CRIMINAL ASSETS, SPECIAL COURT
PROCEDURES HAVE BEEN CREATED, ENABLING LAW ENFORCEMENT TO
CONTINUE FINANCIAL INVESTIGATIONS IN ORDER TO PREPARE
CONFISCATION AFTER THE UNDERLYING CRIMES HAVE BEEN
SUCCESSFULLY ADJUDICATED.

--ASSET SEIZURE HAS BEEN AS A MATTER OF POLICY FULLY
INTEGRATED IN ALL LAW ENFORCEMENT INVESTIGATIONS INTO SERIOUS
CRIME. ALL POLICE SERVICES INVESTIGATING IN THE FIELD OF
ORGANIZED CRIME CAN RELY ON THE REAL TIME ASSISTANCE OF
FINANCIAL DETECTIVES AND ACCOUNTANTS, AS WELL ON THE
ASSISTANCE OF BOOM, THE SPECIAL BUREAU ADVISING THE OFFICE OF
THE PUBLIC PROSECUTOR IN COMPLEX (I.E. INTERNATIONAL) SEIZURE
AND CONFISCATION CASES.

--FORFEITURE STATISTICS PROVIDED BY THE OFFICE OF THE PUBLIC
PROSECUTOR SHOW THAT THE AMOUNT OF ASSETS FORFEITED AND/OR
SEIZED IN 2002 AMOUNTED TO 7.9 MILLION EUROS (8.4 MILLION
DOLLARS), COMPARED TO 9.1 MILLION EUROS (10.1 MILLION
DOLLARS) IN 2001 AND FROM 10 MILLION EUROS (10.9 MILLION
DOLLARS) IN 2000. INADEQUATE IMPLEMENTATION OF ASSET SEIZURE
LEGISLATION AND BOTTLENECKS IN THE LAW ITSELF HAVE KEPT THE
AMOUNTS SEIZED SO FAR BELOW OFFICIAL PUBLIC PRESCUTOR
PROJECTIONS.

--IN ADDITION TO REGULAR ASSET SEIZURE, THE OFFICE OF THE
PUBLIC PROSECUTOR'S HIT-AND-RUN-MONEY-LAUNDERING-TEAMS (HARM-
TEAMS) IN 2002 CONFISCATED A TOTAL AMOUNT OF 29.5 MILLION
EUROS (31.4 MILLION DOLLARS).

--AS MENTIONED IN PARAGRAPH 6, THE NETHERLANDS HAS AN ASSET
SHARING AGREEMENT WITH THE UNITED STATES AND WITH THE UNITED
KINGDOM WHICH WENT INTO EFFECT IN JUNE 1994. DUTCH AGENCIES
DO REACT TO TIPS FROM USG OFFICIALS AND FROM OFFICIALS OF
OTHER COUNTRIES. THERE HAS BEEN LITTLE ADVERSE REACTION TO
ASSET SEIZURES OR FORFEITURES. THE BANKING COMMUNITY
GENERALLY COOPERATES WITH GON ENFORCEMENT EFFORTS TO TRACE,
MONITOR OR SEIZE BANK ACCOUNTS. BANKING SECRECY HAS NOT BEEN
TIGHTENED. WE ARE NOT AWARE OF ANY CRIMINAL RETALIATORY
MEASURES IN THIS AREA TAKEN BY TRAFFICKERS. RUSSEL