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Money laundering typologies

On 16 April 2015, the Instruction for Money Laundering [1] was revoked. This instruction contained the typologies included in Appendix 2. These typologies continue to be important for criminal prosecution and the reporting chain under the Money Laundering and Terrorist Financing (Prevention) Act [2]. The Explanatory Memorandum [3] on money laundering states that typologies can be developed by, among others, the Office for the Disclosure of Unusual Transactions, now FIU-the Netherlands[4]. In this document, FIU-the Netherlands establishes typologies.

These are the typologies from the FIU-the Netherlands. Furthermore, a few new typologies derived from case law have been added. Future experiences in preventing and combating money laundering and terrorism financing will result in periodical new additions to these typologies.

Typologies that were mentioned in the explanatory memorandum are not included in this list. Case law is a continuous, important source of typologies. That is why this list is not exhaustive.

When a concrete case has characteristics as described below, this may be a reason for suspicion of money laundering. Identifying and mentioning typologies in criminal investigation files can be relevant for prosecution and for the substantiation of evidence. In addition, the typologies below provide points of reference for specification of the subjective indicator by parties obliged to report in pursuance of the Money Laundering and Terrorist Financing (Prevention) Act.


Identified money-laundering typologies:

  • the absence of a legal economic explanation for the currencies exchanged and the frequency of the exchanges;
  • the absence of a legal economic explanation for the exchange of large monetary amounts;
  • the absence of a legal economic explanation for the exchange of foreign currency;
  • the transactions are not proportionate to the income;
  • the cash exchange in a money-laundering cycle is often made to interrupt the "paper trail";
  • large amounts of cash in several currencies: it is generally known that various forms of crime involve large amounts of cash in various currencies;
  • physical transportation of large amounts of cash: the physical transportation of large cash amounts carries considerable security risks;
  • the fact that the suspect has no known economic activity in connection with the countries with which transactions were conducted;
  • the fact that several exchange transactions were carried out at different exchange offices or banks or at different branches on one day;
  • the fact that the money was provided uncounted a number of times;
  • the fact that money in small denominations was exchanged for large denominations a number of times;
  • the fact that drug trafficking yields a lot of money in small denominations;
  • the fact that drug trafficking yields a lot of cash in various currencies;
  • the fact that the suspect had (has) many contacts with persons with a criminal record;
  • the way in which the money was transported and/or offered;
  • the fact that the suspect refuses to state anything about the origin of the money;
  • the fact that it was obviously the intention to evade the reporting threshold;
  • the fact that the suspect received a reward for the exchange transactions carried out by him/her;
  • the fact that frequently making money transfers from the Netherlands to various persons in the Caribbean is often connected with the smuggle of cocaine from the Caribbean to the Netherlands;
  • frequent use of money transfers (it is a fact that it is considerably more expensive to remit money abroad through money transfers than through bank transfers);
  • the fact that Dutch nationals abroad have money in bank accounts opened there in order to keep it out of the sight of the Dutch authorities and/or Dutch investigation services;
  • the fact that previous investigations have shown that exchanging British and Scottish pounds into smaller denominations outside the United Kingdom can often be linked to drug trafficking;
  • substantial monetary amounts in cash that cannot be found back in official records and cannot be justified by documents of regular commercial activities;
  • having large amounts of cash at one's disposal without a need for it on the basis of one's business or occupation;
  • unusual way of transport (hiding cash). For instance, hiding liquid assets in materials that are not intended for the transportation of money, such as: suitcase handles or drawbars, packs of diapers, shampoo bottles, wrapped in tights and hidden under clothes, hidden in the body.       

 
  
[1] Registratienummer: 2008A006
[Registration number: 2008A006]


[2] Wet ter voorkoming witwassen en financiering van terrorisme
[Money Laundering and Terrorist Financing (Prevention) Act]


[3] Tweede Kamer, vergaderjaar 1999-2000, 27 159, nr. 3, p.9
[House of Representatives, session year 1999-2000, 27 159, no. 3, p.9]


[4] Financial Intelligence Unit – Nederland, zijnde de Financiële Inlichtingen Eenheid art. 12 Wwft, conform Stcr. 2013,13691. 
[Financial Intelligence Unit – the Netherlands, Section 12 of the Money Laundering and Terrorist Financing (Prevention) Act, in accordance with Government Gazette 2013,13691.]

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