April 20, 2011, 4:29 PM ET

http://blogs.wsj.com/corruption-currents/2011/04/20/fatf-warns-netherlands-is-susceptible-to-money-laundering/?mod=google_news_blog

The Netherlands is susceptible to money laundering because of its large financial center, openness to trade and the size of criminal proceeds, the Financial Action Task Force, or FATF, said in its latest report (pdf).

The report, dated Feb. 25 and released Wednesday, found that most criminal proceeds in the Netherlands come from fraud and illicit narcotics, and that it equals about $14 billion per year–or 1.8% of the country’s gross domestic product.

“Work done by academics suggests a significant amount of criminal proceeds originating from foreign countries flows into The Netherlands for laundering,” the report said. To combat it, the authorities “have developed novel and advanced research” to investigate the links between business and crime, it added.

FATF is an inter-governmental body that tracks and recommends ways to prevent money laundering and terrorist financing.

The report found that while  the Netherlands’ regulatory framework is modern and covers both financial and non-financial institutions, it falls short on areas such as simplifying due diligence and identifying beneficial ownership. It recommends amending the laws covering anti-money laundering and terrorist financing to include reporting requirements such as the prompt filing of suspicious activity reports.