The Netherlands will soon no longer be a free haven for dubious foreign assets. In roughly two years, no top criminal, Russian oligarch or terrorist group will be able to anonymously hide their capital or possessions.
New anti-money laundering legislation agreed upon by the two largest groups in the European Parliament will make that impossible. The stricter rules will of course apply to all of Europe, but will have a major impact on them, especially in the Netherlands, says PvdA tax specialist Paul Tang.
“We are one of the most important deposits of illegal assets worldwide. In a ranking such as the Financial secrecy index, the Netherlands is in twelfth place, even before the Cayman Islands.” That had been the case for some time, but with the EU sanctions against Russia, the Netherlands was not seen by the whole world: so far (May 13) a paltry 640 million has been frozen, in assets that, according to the Russian central bank amounts to 50 billion.
Tang: ,,Simply because in the Netherlands we don’t know who owns what. And apparently still don’t want to know. It makes you think that with a few days of digging, investigative journalists could link as much as 45 billion worth of Russian assets in the Netherlands to persons and organizations on the sanctions list, while the official authorities were not. If those authorities can’t find that money, you can check the money from crime gangs or terrorist organizations. The Netherlands has been repeatedly reprimanded from Brussels for its laxity – which did not stop VNO/NCW from arguing for a postponement of a registration obligation two days before the Russian invasion of Ukraine.”
The Netherlands has been repeatedly reprimanded from Brussels for its laxity
If it were up to Tang and his Czech EPP colleague Ludek Niedermayer, Europe will now arrange what four Rutte cabinets have not arranged: mapping assets very sharply and linking them to people whose identities are known. Registers will soon be used to record who owns how much capital, real estate and luxury goods. A new European authority to be established will monitor this. Anyone who is not registered cannot open a bank account or purchase real estate. Those who do not report or make an incorrect declaration risk heavy fines, and repeat offenders even heavier. Also of foreign trusts that want to do business in Europe, a point that Stef Blok already encountered in his short career as a sanctions coordinator, the owners (‘beneficial owners‘) be famous. The declaration limit for shares in a company will be lowered to 5 percent. Tang: ,,That is now 25 percent. If there are five of you owning a company, there is no obligation to report.”
The register, which the two reporters may use as the impetus for a global property register, will soon make it impossible for Russians or crime clans in the Netherlands to keep anonymous capital or to own canal houses, luxury yachts, private jets or fast cars. Jewelery and art are for the next round. Separately, stricter rules will also be introduced to give the enormous area of intermediaries – banks, civil-law notaries, lawyers, tax specialists, large accountancy firms, sometimes extremely helpful in hiding capital – some sense of norms.
‘Measures against money laundering as strong as the weakest link’
Anti-money laundering and terrorist financing measures are only as strong as the weakest link, whether that be a country, institution or economic sector. Tang expects Parliament to finalize the bill this year, after which he and Niedermayer will enter negotiations with member states on behalf of Parliament. Thanks to Putin, Tang: “His war certainly helped us”, the new anti-money laundering legislation could then come into effect in Europe in 2024.
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