Are you unknowingly part of a money laundering chain?

Approximately €13 billion is laundered annually. Earning the money is not the problem, the trick is to get the money earned into the "legal circuit". Ten thousand euros sounds like a lot of money, but for such a "low" amount, there is not even a need for a money laundering construction. Larger amounts are more interesting to launder, but also a lot more difficult. A plan of action is then required, generally money laundering takes place in three steps: placement, concealment of origin and reintegration. If money cannot be laundered, it is often not worth the crime, so it is extremely important that there is enough attention and knowledge about money laundering.

In recent years, the attention for money laundering has grown considerably. In. 2018, ING received a record fine of no less than 775 million euros. For years they gave criminals free rein, because the legally required investigations were neglected. Meanwhile, the anti-money laundering guidelines have been tightened up considerably and many financial institutions have stepped up their money laundering checks.

The Anti Money Laundering Centre has already identified about 250 different money laundering methods. These differ from money laundering through cryptocurrency to well-known "real estate tricks". The important thing is to think like a criminal. It is of course important that financial institutions with a gatekeeper function are aware of the various money laundering methods, but it is actually relevant for everyone to know how money laundering works.

Often (innocent) entrepreneurs are not aware that they are part of a money laundering chain. It is feared that most money is laundered because criminals spend small amounts of cash spread over a longer period of time. A method that is difficult to control, the expenditure is not noticed and is almost never brought to light by the regulator. Nowadays there are various systems in circulation that monitor transactions and sound the alarm as soon as anything deviates from the normal spending pattern. There is such a system at ABN Amro. As soon as the transactions do not match the expected expenditure pattern, someone is appointed to further analyze the transactions.

Only small amounts cannot be used to purchase a nice expensive car, with cash amounts from 10 thousand euros there is a duty to report in the Netherlands. To be able to buy that car, criminals have to get the money into a bank account. That is generally the first step. Placing the money in an account is usually done under the name of a fictitious company or through a front man. A front man is someone who lends his identity to criminals and who is part of money laundering without actually performing any actions. What is currently also very popular among criminals is investing (cash) in goods, such as potatoes and onions, in order to then export and sell them. This is also called trade-based money laundering . The goods are sold, the money ends up in an account, and it seems fair trade.

That is often the next step; concealing the origin, or "legalizing" the origin. This still often happens through businesses such as hairdressers, nail salons and tanning salons, as relatively little investment is required to generate revenue. You can imagine that a pub would have to justify itself if there is a lot of income but no drinks are purchased. Also, multiple transfers often take place between different accounts, everything to make the origin of the money as unclear as possible.

Then the last step, the money must be returned to the criminal. For example, because the criminal is registered on paper as the owner of the tanning salon and therefore receives a substantial monthly salary. Now that the money is in an account, the transactions are no longer subject to the reporting obligation and can therefore safely buy that beautiful expensive car. As long as the car dealer does not suspect anything, the money laundering has been successfully completed.

The sharper the upper world reacts to money laundering, the more complicated the methods the underworld has to come up with. It is important that transactions are monitored and that financial institutions, but also other entrepreneurs, investigate persons or companies with which they do business. CDD On Demand is the perfect support for auditing individuals and companies. With the CDD solution, compliance checks can easily be carried out and with the UBO investigation, more insight can be quickly gained into the details about a company.

Would you like more information about CDD On Demand? Then contact us. Fill in the Contact form or email info@scope.nl or call us on +31 (0) 23 517 9200.