Dutch anti-money laundering rules hit citizens hard but effectiveness remains unclear
New research reveals that strict anti-money laundering controls in the Netherlands are costing banks €1.6 billion annually and disproportionately affecting citizens, including former politicians, religious groups, and migrants. Many face account closures or invasive checks, yet the effectiveness of these measures remains unproven.
| Key Data Point | Details |
|---|---|
| Cost to banks (2024) | €1.6 billion |
| Suspicious transaction reports | Over 530,000 in 2024 (up from 250,000 in 2020) |
| Bank compliance staff (2024) | 13,000 full-time equivalents |
| PEPs reporting bank checks | 90% of surveyed politically exposed persons |
| Foreign-sounding names in reports | 61.8% of cases examined (vs. ~25% of Dutch population with migration background) |
| Affected groups | Politically exposed persons, mosques, migrant churches, hospitality sector |
| Supervisory bodies | De Nederlandsche Bank (DNB), Financial Intelligence Unit-Netherlands (FIU) |
The Netherlands Court of Audit evaluates the effectiveness and societal impact of government policies, including anti-money laundering measures. The Dutch Anti-Money Laundering and Terrorist Financing Act (Wwft) mandates banks to report suspicious transactions, with oversight from De Nederlandsche Bank (DNB) and the Financial Intelligence Unit (FIU).
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Anti-money laundering controls have major consequences for citizens, effectiveness remains unknown
Anti-money laundering controls have significant consequences for citizens, leading to high costs for banks (€1.6 billion in 2024), but there is no clear insight into the effectiveness of these measures. It is crucial that money laundering is addressed effectively and in a risk-based manner. In other words: combating money laundering practices based on clear risk analyses, so that innocent citizens and businesses are not unnecessarily burdened. Research by the Netherlands Court of Audit shows that, in practice, the anti-money laundering approach has major consequences for citizens and businesses, with indications of discrimination, while little is known about its effectiveness.
Number of suspicious transaction reports grows
The number of reports of unusual transactions by banks has increased since 2020 from nearly 250,000 to over 530,000 in 2024. Banks are legally required under the Dutch Anti-Money Laundering and Terrorist Financing Act (Wwft) to report unusual transactions, including potential money laundering, to the Financial Intelligence Unit-Netherlands (FIU). De Nederlandsche Bank (DNB) supervises banks to ensure they comply with this obligation.
Consequences are significant
In this study, the Netherlands Court of Audit examined how the anti-money laundering approach in the banking sector affects three groups in practice: politically exposed persons (PEPs, in this study primarily former politicians and judges), religious institutions, and hospitality entrepreneurs. PEPs and religious institutions (particularly mosques and migrant churches) often report intrusive control measures. As a result, they may be unable to open accounts, have their accounts closed, or face difficulties transferring money to family or businesses abroad. Respondents describe the investigations as burdensome, for example because family members of PEPs are also scrutinised. This burden does not apply to most hospitality entrepreneurs, even though this sector is considered high-risk for money laundering.
90% of politically exposed persons (PEPs) who completed the questionnaire report being checked by their bank
Reports of unusual transactions by banks to the FIU often involve individuals with foreign-sounding surnames, accounting for 61.8% of the cases examined by the Netherlands Court of Audit. This is disproportionate to the number of people with a migration background in the Netherlands. While this may indicate discrimination, it is not necessarily the case. For example, labour exploitation may more frequently involve labour migrants. This study could not determine whether the overrepresentation of foreign-sounding names could be explained.
Research among religious institutions shows that mosques, in particular, are asked about the purpose and origin of their transactions, even when these do not involve cash or foreign transfers. This was not the case for surveyed Catholic and Protestant churches. The Netherlands Court of Audit sees indications of discrimination in these findings. The Minister of Finance was already informed in 2022 about signals of discrimination in the banking sector and monitors this annually. DNB also acknowledges discrimination in the banking sector in its research.
If the anti-money laundering approach can demonstrably work and is risk-based, this could justify making distinctions between groups of citizens and businesses. However, there is no insight into the effectiveness of the anti-money laundering approach, making it impossible to determine whether such distinctions are justified.
Lack of insight into effectiveness
It is unclear whether the increasing controls by banks actually contribute to preventing and detecting money laundering. Insight is lacking across various areas among the parties involved. For example, no evaluations of the results are conducted by the ministers or DNB. Based on FIU research, it is also difficult to determine what proportion of the total number of reports concerns money laundering or the actual financial scale of such activities. Moreover, it is extremely complex to prove that money laundering has been prevented.
Clear and complete reports by banks contribute to the detection of money laundering. To gain insight into the effectiveness of anti-money laundering controls, the Netherlands Court of Audit examined the quality of banks' reports. This quality varies between banks. However, the FIU does not assess the quality, and DNB does not examine the quality of reports in its supervision of banks.
Banks face increasing burdens
Not only do citizens bear the burden of the anti-money laundering approach; banks also incur significant costs. In 2021, banks spent €1.16 billion on Wwft compliance. By 2024, this had risen to around €1.6 billion. The nine banks surveyed for this study employed 13,000 full-time equivalents to combat money laundering that year. DNB does not share information about the burdens on banks with the Minister of Finance, and the minister has no other way of gaining insight into the compliance costs of the Wwft.
Costs of the Dutch Anti-Money Laundering and Terrorist Financing Act (Wwft) continue to rise
Amounts in euros
Key points for DNB and FIU
It is essential to work together—across all links in the chain—to address potential discrimination and gain insight into the results of anti-money laundering policy. Only when it is clear what works in practice and there is a good understanding of risk groups can wrongdoers be targeted while sparing other citizens unnecessary burdens. In their response to this study, the Ministers of Finance and Justice and Security state that their goal is to make the results of the anti-money laundering approach more transparent. However, these are not new ambitions. After three consecutive action plans against money laundering since 2019 and various studies on potential discrimination, concrete steps are needed that deliver results within a foreseeable timeframe. The ministers reiterate the responsibilities of the various parties involved and that the Minister of Finance remains deliberately at arm’s length from DNB. This raises concerns about whether sufficient urgency is felt to work together—across all links in the chain—to address potential discrimination and gain insight into results.