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Netherlands Antilles.

The Netherlands Antilles is comprised of the islands of Curacao, Bonaire, Dutch Sint Maarten, Saba, and Sint Eustatius. Though a part of the Kingdom of the Netherlands, the Netherlands Antilles has autonomous control over its internal affairs. The Government of the Netherlands Antilles (GONA) is located in Willemstad, the capital of Curacao, which is also the financial center for the five islands. A significant offshore sector and loosely regulated free trade zones, as well as narcotics trafficking and a lack of border control between Sint Maarten (the Dutch side of the island) and St. Martin (the French side), create opportunities for money launderers in the Netherlands Antilles.

The islands have seven local commercial banks, four foreign commercial banks, 12 credit unions, six specialized credit institutions, one savings bank, four savings and credit funds, 15 consolidated international banks and 19 nonconsolidated international banks. There are 54 institutional investors operating in the Netherlands Antilles, including ten life insurance companies, 20 non-life insurance companies and 24 pension funds. There are also two life captive-insurance businesses, 15 non-life captive-insurance business and four professional re-insurers.

The Netherlands Antilles has a significant offshore financial sector with 229 trust service companies providing financial and administrative services to an international clientele, which includes offshore companies, mutual funds and international finance companies. As of September 2006, there were a total of 15,009 offshore companies registered with the Chamber of Commerce in the Netherlands Antilles, as is required by law. International corporations may be registered using bearer shares. The practice of the financial sector in the Netherlands Antilles is for either the bank or the company service providers to maintain copies of bearer share certificates for international corporations, which include information on the beneficial owner(s). The Netherlands Antilles also permits internet gaming companies to be licensed on the islands. There are currently 32 licensed internet gaming companies.

On February 1, 2001, the GONA approved proposed amendments to the free zone law to allow e-commerce activities into these areas (National Ordinance Economic Zone no. 18, 2001). It is no longer necessary for goods to be physically present within the zone as was required under the former free zone law. Furthermore, the name "Free Zone" was changed to "Economic Zone" (e-zone). Seven areas within the Netherlands Antilles qualify as e-zones, five of which are designated for e-commerce. The remaining two e-zones, located at the Curacao airport and harbor, are designated for goods. These zones are minimally regulated; however, administrators and businesses in the zones have indicated an interest in receiving guidance on detecting unusual transactions.

Money laundering is a criminal offence in the Netherlands Antilles. Legislation in 1993 and subsequent interpretations regarding the underlying crime establish that prosecutors do not need to prove that a suspected money launderer also committed an underlying crime in order to obtain a money laundering conviction. Thus, it is sufficient to establish that the money launderer knew, or should have known, of the money's illegal origin. Suspicious transactions are required by law to be reported to the financial intelligence unit (FIU), the Meldpunt Ongebruikelijke Transacties (MOT NA).

In recent years, the GONA has taken steps to strengthen its anti-money laundering regime by expanding suspicious activity reporting requirements to nonfinancial sectors; introducing indicators for the reporting of unusual transactions for the gaming industry; issuing guidelines to the banking sector on detecting and deterring money laundering; and modifying existing money laundering legislation that penalizes currency and securities transactions by including the use of valuable goods. The 2002 National Ordinance on Supervision of Fiduciary Business institutes the Supervisory Board to oversee the international financial sector. At the same time, the GONA imposed know-your-customer rules upon the sector. A GONA interagency anti-money laundering working group cooperates with its Kingdom counterparts.

Both bank and nonbank financial institutions, such as company service providers and insurance companies, are under the obligation to report unusual transactions to the MOT NA. Each financial sector has its own reporting threshold amount. The GONA is currently amending its legislation to add new reporting entities, including lawyers, accountants, notaries, jewelers and real estate agents. It is expected that the legislation will be passed in 2007.

Through October 2006, 10,788 suspicious transaction reports totaling $1.3 billion were received by the MOT NA. Of these, 283 were reported to the relevant law enforcement authorities. The MOT NA currently has a staff of nine, and is engaged in increasing the effectiveness and efficiency of its reporting system. Significant progress has been reported in automating unusual activity reporting. Additionally, the MOT NA has issued a manual for casinos on how to file reports and has started to install software in casinos that will allow reports to be submitted electronically.

The Central Bank of the Netherlands Antilles supervises all banking and credit institutions, including banks for local and international business, specialized credit institutions, savings banks, credit unions, credit funds and pension funds. The laws and regulations on bank supervision provide that international banks must have a physical presence and maintain records on the island. The Central Bank also supervises insurance companies, insurance brokers, mutual funds and administrators of these funds, all of which must be licensed by the Central Bank. As of 2003, supervision of the company service providers in the Netherlands Antilles was transferred to the Central bank.

The Central Bank updated its anti-money laundering guidelines in 2003. These guidelines are more closely focused on banks, insurance companies, pension funds, money transfer services, financial administrators, and company service providers and specifically include terrorism financing indicators. Entities under supervision must submit an annual statement of compliance. The Central Bank has provided training to different sectors on the guidelines. The Central Bank also established the Financial Integrity Unit to monitor corporate governance and market behavior.

As of May 2002, all persons entering or leaving one of the island territories of the Netherlands Antilles shall report money of NAF 20,000 (approximately US$11,300) or more in cash or bearer instruments to Customs officials. This provision also applies to those entering or leaving who are demonstrably traveling together and who jointly carry with them money for a value of NAF 20,000 or more. Declaration of currency exceeding the threshold must include origin and destination. Violators may be fined up to NAF 250,000 (approximately $142,000) and/or face one year in prison.

In 2000, the National Ordinance on Freezing, Seizing and Forfeiture of Assets Derived from Crime was enacted. The law allows the prosecutor to seize the proceeds of any crime proven in court.

Terrorist financing is not a crime in the Netherlands Antilles. However, in January 2002, the GONA enacted legislation allowing a judge or prosecutor to freeze assets related to the Taliban and Usama Bin Laden, as well as all persons and companies connected with them. The legislation contains a list of individuals and organizations suspected of terrorism. The Central Bank instructed financial institutions to query their databases for information on the suspects and to immediately freeze any assets found. In October 2002, the Central Bank instructed the financial institutions under its supervision to continue these efforts and to consult the UN website for updates to the list.

Netherlands Antilles' law allows the exchange of information between the MOT NA and foreign FIUs by means of memoranda of understanding and by treaty. The MOT NA's policy is to answer requests within 48 hours of receipt. A tax information exchange agreement (TIEA) was signed between the Netherlands Antilles and the United States. As of the end of 2006, implementing legislation was pending the GONA parliament to allow this agreement to go into effect. The Mutual Legal Assistance Treaty between the Netherlands and the United States applies to the Netherlands Antilles. The U.S.-Netherlands Agreement Regarding Mutual Cooperation in the Tracing, Freezing, Seizure and Forfeiture of Proceeds and Instrumentalities of Crime and the Sharing of Forfeited Assets also applies to the Netherlands Antilles.

The MOT NA is a member of the Egmont Group. The Netherlands Antilles is also a member of the Caribbean Financial Action Task Force (CFATF), and as part of the Kingdom of the Netherlands, participates in the Financial Action Task Force (FATF). In 1999, the Netherlands extended application of the 1988 UN Drug Convention to the Netherlands Antilles. The Kingdom of the Netherlands became a party to the UN International Convention for the Suppression of the Financing of Terrorism in 2002. In accordance with Netherlands Antilles' law, which stipulates that all the legislation must be in place prior to ratification, the GONA is preparing legislation to ratify the Convention.

The Government of the Netherlands Antilles has demonstrated a commitment to combating money laundering. The Netherlands Antilles should continue its focus on increasing regulation and supervision of the offshore sector and free trade zones, as well as pursuing money laundering investigations and prosecutions. The GONA should criminalize the financing of terrorism and enact the necessary legislation to implement the UN International Convention for the Suppression of the Financing of Terrorism.
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Title Annotation:Country Reports
Publication:International Narcotics Control Strategy Report
Geographic Code:5NETH
Date:Jan 1, 2007
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