Financial surveillance and the role of the Financial Intelligence Unit (FIU) in the Netherlands
| DOI | https://doi.org/10.1108/JMLC-09-2022-0134 |
| Published date | 06 December 2022 |
| Date | 06 December 2022 |
| Pages | 63-84 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Pieter Lagerwaard |
Financial surveillance and the role
of the Financial Intelligence Unit
(FIU) in the Netherlands
Pieter Lagerwaard
Department of Political Science, University of Amsterdam,
Amsterdam, The Netherlands
Abstract
Purpose –In 2019, FIU-the Netherlands celebrated its 25th anniversary. This study takesthe occasion to
reflect on the role of the FIU in financial surveillanceand to describe its core practices of collecting,analysing
and disseminatingfinancial intelligence.
Design/methodology/approach –Because FIU practices are often secret and its transaction data
classifiedas state secrets, the FIU’s daily operational activities remain obscure.Drawing on interviews, public
reports and an online training course, this study encircles secrecy and offers a fine-grained analysis of the
FIU's core activities.
Findings –The article findsthat the FIU plays a pivotal role in financial surveillancebecause it can operate
at various intersections.An FIU operates at the intersection of finance and security, in between the publicand
private sector and at the nationaland international domain. This pivotal role makes the FIU indispensablein
the surveillanceof payment systems and spending behavior.
Social implications –The article posesthat the desirability and effectiveness of financialsurveillance has
to date not received sufficientconsideration, while it affects (the privacy of) anyonewith a bank account. The
article asks:is it ethically justifiable that transaction informationis declared suspect, investigated, and shared
nationally and internationally,without the individual or entity concerned officially being notifiedand legally
named a suspect?
Originality/value –This case-study is not only relevant for the study of finance/security,AML/CFT and
financial surveillance,but also to policy makers and the broader public who merit an understanding of how
their financialbehaviour is being surveilled.
Keywords Financial Intelligence Unit, Encircling secrecy, Financial surveillance,
Privacy and proportionality
Paper type Research paper
© Pieter Lagerwaard. Published by Emerald Publishing Limited. This article is published under the
Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and
create derivative works of this article (for both commercial and non-commercial purposes), subject to
full attribution to the original publication and authors. The full terms of this licence may be seen at
http://creativecommons.org/licences/by/4.0/legalcode
The research for this paper has received funding from the European Research Council
(ERC) under the European Union’s Horizon 2020 research and innovation program (research
project “FOLLOW: Following the Money from Transaction to Trial”, Grant No. ERC-2015-CoG
682317). I would like to thank the whole FOLLOW team for the inspiring years of working
together.
Financial
Intelligence
Unit
63
Journalof Money Laundering
Control
Vol.26 No. 7, 2023
pp. 63-84
EmeraldPublishing Limited
1368-5201
DOI 10.1108/JMLC-09-2022-0134
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1368-5201.htm
Introduction: Financial Intelligence Unit-the Netherlands
There’s a story behind every criminally-gained euro. A story that a banknote or bank transfer
doesn’t reveal but for some reason does end up at the FIU-the Netherlands. (Akse, 2019,p.6)
To mark its 25th anniversary, the Financial Intelligence Unit of the Dutch police (henceforth,
FIU-the Netherlands) published a book on the FIU’s origins and core tasks (Akse, 2019)[1]. The
book provides specific examples of the FIU’s value to matters of security, for example, when a
womanwantedtowithdrawe100,000 in cash, to have –such was the suspicion –her ex-
boyfriend murdered. Accordingly, this money was not paid out. Another well-known example
is the FIU’s contribution to the investigation into the murder of politician Pim Fortuyn, by
Volkert van der Graaf. Based on the FIU’sfinancial data, the police were able to trace his
whereabouts and conduct a search on the day of the murder. According to the jubilee book,
“intelligence on reported transactions increasingly stakes an own rightful place in investigation
and prosecution [...]. Whether it concerns the murder of Fortuyn, payment for a container of
fruit with concealed parcels of cocaine or a healthcare fraud, [...] reported transactions played a
crucial or supportive role in all these kinds of investigations”(Akse, 2019.p.8).
During its now more than twenty-five years of existence, the Dutch FIU has grown to
become the pivot of financial surveillance in the Netherlands. Coupled with the increasing
digitisation of payment services, as societies have transitioned from the use of coins and
notes to digital transactions, a growing volume of financial transaction data have become
available, from banks, but alsofrom shops and payment service providers such as Western
Union. These data provide a wealth of intelligence on spending behaviour of citizens and
thus possibly provide an insight into criminal activities. Commercial companies such as
banks that have access to transaction data are therefore often seen as “gatekeepers”of the
financial system. According to the “Money Laundering and Terrorist Financing
(Prevention) Act”in the Netherlands[2], these gatekeepers must monitor their customers for
unusual, potentially criminalactivities. Banks in the Netherlands are now estimated to have
more than 12,000 employees whose primary task is to conduct customerscreening, monitor
funds transfers and transaction behaviour of Dutch citizens and to report unusual
transactions to the FIU (Kamphuis, 2021). The FIU is the leading authority that collects all
reports on unusual transactions. It examinesthese further and disseminates the intelligence
to the relevant investigationand prosecution authorities.
Given the pivotal rol e played by the FIU i n financial surveillance, it is remarkable how
little is known about the daily operations of this relatively new organisation. There is a
growing literature that focuses on the increasing use of financial data for security purposes
(Amicelle, 2017b), the role of banks and technologyin combating terrorist financing (Bosma,
2019) and the lawsuits arising from these security efforts (Anwar, 2020). However, little is
known about the exact role that the FIU plays in the wider financial surveil lance system.
There are notable exceptions of studies that investigate how banks and FIUs collaborate
(Amicelle, 2017a), how FIUs collaborate at a Europeanlevel and the legislative framework in
which this happens (respectively Lagerwaard, 2020;Mouzakiti, 2020) and how FIUs
exchange intelligence at an international level (Amicelle and Chaudieu, 2018), but,as far as I
know, there is no detailed study of the daily practices of a single FIU. In addition, literature
on surveillancepays little attention to thisform of financial surveillance.The FIU is neither a
conventional “Orwellian”public security service because it uses private payment data
(Orwell, 1949), nor is it a large private company like Google or Facebook that use their
databases to monitor behaviour for commercial purposes, which Zuboff recently called
“SurveillanceCapitalism”(2019).
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