#49: A FIOD tradition
At the start of a new year people have the urge to look back at the past year and look out to the upcoming year. At the Dutch Tax Intelligence and Investigative Service (FIOD) this urge for reflection is almost becoming a tradition. In Lawlunch #37 we wrote about the first published annual report looking back on the accomplishments of the last year and their goals for 2019. 12 months later the FIOD published a new annual report with the title ‘Financial investigation, an increasingly important tool in the fight against crime’. What has the FIOD accomplished and what can we expect?
In 2019 the FIOD has completed 800 investigations of which 305 were on request of foreign countries. This is a lot less then in 2018 in which 900 investigations were completed.
On the one hand the FIOD writes that it is gaining more and more insight in understanding how financial fraud works. On the other hand creating this insight in understanding how fraud works remains an important goal for this year. One of the initiatives that has been started is an intense cooperation with banks. The FIOD is of the opinion that such cooperation with private parties, including banks, helps in the fight against financial crime.
Moreover, the FIOD lists some conducted investigation in the year 2019. The FIOD conducted an investigation into money laundering and large-scale drug trafficking in a Joint Investigation Team (JIT) with Germany. It was an important cooperation between police, customs and defense provided assistance.
Another example in which the FIOD conducted a joint investigation, but this time with the Dutch police, is the investigation into four car companies which are suspected of cross-border VAT fraud and the facilitation of money laundering in the export of second-hand lease cars. This is a form of Trade Based Money Laundering (TBML) in which goods (in this case cars) are used for the laundering of criminal money. TBML has apparently an important target for the FIOD in 2019 as the FIOD mentions also other investigations into the export of potatoes and onions. The TBML approach will be the first project in which the government and banks collaborate in detecting money laundering schemes. This collaboration started in January 2020. It is thus expected that more TBML cases will be investigated this year.
Another important target for the FIOD in 2019 was corruption and cyberfraud. Some examples from 2019 are named in the report. The FIOD conducted an investigation into Dutch companies who facilitated the payments of bribes into the Brasilian company Odebrecht SA. Allegedly a 100 million euro’s have been paid through Dutch companies. Another accomplishment in the eyes of the FIOD is the fact that the FIOD has put down the Bestmixer.io on 22 May 2019, one of the largest online mixers for crypto currency. According to the FIOD this was a huge success in the fight against money laundering. Again the FIOD stipulated the importance of their international cooperation with the Digital Intrusion Team (DIGIT) of the police, Europol, Luxembourg, France and Lithuania.
For 2020 the fight against money laundering will remain a main target. Their goal is to bring down money laundering in the Netherlands with 5 percent per year. How the FIOD is going to measure this is unclear. What is clear is that the FIOD will intensify their relations with private parties such as banks, but also internationally. As an example the FIOD names their J5 partners from Australia, Canada, the UK and the US. Furthermore the FIOD hopes to intensify their relations with financial centra such as the Arabic Emirates, Dubai, Singapore and Hong Kong.
We just hope that during this fight against money laundering no fishing expeditions will occur and eye remains for the rights of the defendants. Because sometimes this battle against money laundering results in tunnel vision and the investigation is merely focused on money laundering indicators without conducting any investigation to the business reality of a case.
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