Government-wide measures to combat circulation of illegal money

Confiscate and Cut off: that is the approach that the Dutch government has in mind for its nation-wide measures to combat the circulation of illegal money. The focus of that approach is on confiscating illegal money and cutting off the possibilities to break the rules. Well over €4.5 billion in illegal money was confiscated on a nation-wide level in 2011. Minister Opstelten of Security and Justice provided this information in a letter to the House of Representatives, which letter he also sent on behalf of the Minister of Finance, the Minister of Social Affairs and Employment, the Minister of Economic Affairs, Agriculture and Innovation, the Minister of Health, Welfare and Sport, and the Minister of Education, Culture and Science.

At the request of the House of Representatives, a description has been provided, for the first time ever, of the work that needs to be done at national level to combat the circulation of illegal money and to renew people's faith in a reliable economic system. Illegal money can be acquired in all kinds of ways. The government's measures can therefore only be effective if the problem is tackled on all fronts. The aim of the nation-wide/national policy is to confiscate illegal money so that everyone can be shown, and can experience the fact that it does not pay to break the rules. The initiative is also aimed at ensuring that illegal flows of money dry up, for example by tightening regulations and intensifying surveillance. The opportunities to break the rules must be reduced to an even further extent.
 
Around 80 percent of the illegal money (it is assumed that approximately €18.5 billion is laundered in the Netherlands every year) comes from fraud. Fraud is a very broad concept, which covers professional financial-economic fraud as well as misuse, improper use, and fraud in the field of taxes, social security and subsidies. An amount totalling €4.5 billion is confiscated by various bodies involved in social security, benefits and the abuse of various provisions in the education sector (together worth approx. € 270 million), and approximately € 190 million is recovered through the application of criminal law (of which € 44 million was confiscated by the Public Prosecution Service and approx. € 150 million by other services on the basis of the results of criminal investigations). The Tax and Customs Administration imposed additional tax assessments and collected additional tax, to the tune of almost € 3.5 billion, as a consequence of corrections to tax returns. A non-identifiable part of this amount is the consequence of mistakes, voluntary improvements and different interpretations of the law. In addition, 635 million euros in fines were imposed.
 
In order to ensure that effective action can be taken on a nation-wide level against this illegal money, a coherent approach is needed, combined with an intensified exchange of information. The Criminal and Unaccountable Assets Infobox [Infobox Crimineel and Onverklaarbaar Vermogen] (iCOV) is being developed within this framework. The plan is for the iCOV to be operational by 1 January 2013. The aim of this partnership between the Tax and Customs Administration, Fiscal Intelligence and Investigation Service (FIOD), Public Prosecution Service (OM), the police, and the Financial Intelligence Unit (FIU) is to use information sharing to identify (unaccountable) assets and expose money laundering and fraud constructions, so that criminal or unaccountable assets can be traced and confiscated, tax evasion can be reduced, or certain amounts owed to the government can still be collected (collection box function). During a subsequent phase, other government parties will be able to join the iCOV, with the idea being to involve semi-public and private parties at a later date.
 
The intensification of methods to tackle financial-economic crime will include assessing whether authorities and sanctions can be extended. In connection with this, a bill to expand the possibilities for combating financial-economic crime was recently sent to, among others, the Public Prosecution Service and the Council for the Judiciary, so that these bodies could provide advice on the matter. On the basis of this bill, a fine can be imposed on companies that do not observe the rules; a fine of up to a maximum of ten percent of the annual turnover of such companies can be demanded. The bill also includes more severe penalties for money laundering and corruption, and makes the misuse of community money a criminal offence. This proposal is also intended to ensure that perpetrators of economic crimes who repeatedly break the law will receive a more severe punishment. The bill aims to increase the sentence for money laundering from 4 to 6 years imprisonment. The proposal also includes a new qualified form of money laundering, which would apply to cases whereby people misuse their professional position to carry out money laundering activities (such as tax consultants, lawyers and bankers.