Money Laundering Could be the Main Economy with the Dissolution of The Netherlands, Antilles
DIFFERENT POINT OF VIEW by Monte Friesner
Financial Crime Consultant for WANTED SA
Friday October 08, 2010
WANTED SA was just informed that this Sunday October 10, 2010 the Netherlands Antilles, as a legal entity shall cease to exist forever having been dissolved by the Government of the Netherlands.
Unfortunately, one of the components of this act is the Dollarization of the Economies of three islands in the Dutch Caribbean, as of January 01, 2011. This will in a number of ways facilitate more money laundering in the Caribbean and could result in an increase in bulk cash smuggling of illicit profits from the United States and Canada.
What a dream to happen to the Criminal Activities of the Drug Lords, Money Launderers and every would be Blackmailer & Extortionist who dreamed about being an International Criminal. Okke Ornstein where are you? Probably moved to one of these islands.
The Dutch islands that are moving to the US Dollar on January 01, 2011 are:
- Sint Eustatius, more commonly known as Statia.
For those readers who are familiar with these Jurisdictions and know that they are not considered Tax Havens, or even Offshore Financial Centers; they still pose attractive targets for money launderers; in my opinion, because:
- Their location in remote areas of the Caribbean, which facilitates bulk cash smuggling, especially during the hours of darkness, often using the same maritime and aviation transport used for drug smuggling operations.
- The islands have but a small amount of Law Enforcement staff, and they are not known to be skilled in the investigation of sophisticated Financial Crime.
- Once smuggled dollars are safely ashore, they can be laundered through placement into the legitimate economy, and later wired out of the country, especially to the Netherlands, having totally lost all evidence their illicit origin.
- The availability of US Dollars in an underground or parallel economy located outside the USA could assist Financial Criminals who have other currencies (e.g. Euros from narcotics sales in the EU) and need to convert to dollars.
- Will the dollars act as a magnet for those seeking such illicit transactions?
- Bonaire's geopolitical location, adjacent to Venezuela and Colombia, could make it the recipient of illicit dollars; whether narcotics profits, arms profits, or bribes or kickbacks to corrupt PEPs, in transit elsewhere.
- These "flight capital" funds could simply be warehoused or secreted there, or transferred to tax havens.
- Iranian Sanctions evaders could avail themselves of the ability to obtain needed dollars in these newly-dollarized territories, or use the islands as intermediaries for the purchase of dual-purpose goods.
Therefore, Risk Managers & Compliance Officers may choose to raise country risk for these Jurisdictions. We shall be watching what happens there after January 01, 2011, looking for signs of increased money laundering activity.
In addition, the Netherlands Antilles Guilder (NAFL) will become the Dutch Caribbean Guilder. We shall cover the potential money laundering aspects of this act in a later article.
The facts and opinions stated in this article are those of the author and not those of WANTED SA. WANTED SA does not warrant the accuracy of any facts and opinions stated in this article; does not endorse them, and accepts no responsibility for them.