Money laundering using raw materials is increasingly popular

The Fiscal Intelligence and Investigation Service (Fiod The Netherlands) has released its annual report of 2020 on January 11th. In 2020, 900 inquiries were completed. 319 of these inquiries came as a request from other countries.

Many of these investigations led to successful collaborations between domestic and foreign investigation services. Especially the large investigations into fraud, money laundering and corruption require good cooperation between several parties, both nationally and internationally. Collaborations with other countries are increasingly important. The report showed that more and more criminals are moving abroad for money laundering. Dubai, Hong Kong and Singapore important places for the Fiod when it comes to money laundering, but Africa has recently also been included in this list.

Much criminal money is invested in raw materials in Africa, such as potatoes, gold and diamonds. It is now estimated that around 150 million euros worth of agricultural products have been exported in recent years. This phenomenon is called trade based money laundering. The criminal cash is invested in the commodities, which are then exported and sold abroad. In this way, the revenues seem to come from fair trade.

“We were always the club of follow the money, but that principle is outdated," Says Fiod CEO Langerak. "Nowadays we also hunt for things like cryptocurrency, and therefore also for goods.”

As long as there is the opportunity for criminals to "invest" their cash, the market will remain infected with crime money. In addition, the current criminal is a lot smarter and more cunning than before. Criminal money was then mainly used to live a lavish life at the Spanish Costa, nowadays the money is invested in houses and hotels, for example.

It is therefore important to look closely at related countries during customer due diligence in order to be able to determine the geographic risk. In addition, assessing the sector in which the client works becomes an even greater point of attention. Global Industry Classification Standarts (GICS) identifies a total of 3 different "layers" with 11 sectors, 24 industry groups and 69 industries. Institutions subject to the AMLD are responsible for including in their CDD policy what the various risks are of these sectors. It is of course also important that this risk indication is also included in the risk assessment of a (new) client.

In the SCOPE Client Portal you can easily record a correct client profile and a matching risk profile. Using the integrated CDD functionalities, various screenings can be performed to carry out a risk assessment of the client. The risk profile is drawn up on the basis of various risk components such as: geographic, client, job type, sectors, distribution and sources of wealth.

It is also imperative that you keep the client profile and the client's risk profile up to date. You can easily keep the client's risk profile up-to-date in the portal by placing the client on the monitor list. The client is then monitored 365 days a year for the risk components and you will receive a notification as soon as something changes in the risk status of the client. To keep the client profile up-to-date, it is necessary to maintain good contact with the client. Dual access in the client portal, dual access, makes maintaining the client profile even easier. Both the employees and the client can look at the same data, so that there is no room for misunderstandings.

Do you want more information about the SCOPE Client portal? Please Contact us. Fill in the contact for, send an e-mail to info@scope.nl or call us +31 (0) 23 517 9200.