Recognising indicators, modus operandi and red flags
Malicious actors and criminals are inventive and creative in applying and developing adapted methods to, for example, conceal assets obtained from illegal activities or to continue their illegal activities. These methods are constantly evolving and respond to, for instance, new products and services and technological developments.
It is important that institutions recognise possible indicators and methods in order to take control measures in a timely manner. Several indicators are described below. These indicators serve as signals and are not decisive in isolation. The ultimate risk assessment always depends on the nature, context and activities of the customer. It is precisely the combination of these characteristics and elements that is essential to determine whether there is an increased risk.
Mortgage fraud: the AFM defines mortgage fraud as any form of deception, such as falsifying documents, with the aim of making a mortgage credit provider believe that these documents are accurate.
Investment fraud: consumers are misled with false or misleading investment proposals (Beware of dubious (investment) proposals – pyramid fraud).
Boiler room fraud: individuals are pressured into investing in worthless or non-existent shares, often via foreign call centres. View the warnings.
Examples of unusual transactions under the Wwft and brochure on obligations for mediation in life insurance.
In addition to these examples of indicators and red flags published by the AFM, other Dutch anti-money laundering and counter-terrorist financing supervisors and knowledge and expertise centres have also developed examples. These may be useful for your policies, processes and procedures. A non-exhaustive list of examples includes:
Anti-Money Laundering Centre of the FIOD – money laundering indicators
Bureau Financieel Toezicht - examples related to the subjective indicator for reporting unusual transactions
Bureau Financieel Toezicht – notes on onusual transactions for legal advisors and examples for notary
Bureau Financieel Toezicht - examples of onusual transactions
Bureau Financieel Toezicht – notes on unusual transactions
Bureau Financieel Toezicht – note on crowdfunding
Bureau Financieel Toezicht – note on cryptocurrencies and a note on cryptocurrencies for accountants, tax advisors.
Bureau Financieel Toezicht – note on healthcare fraud.
FIU-Netherlands – third-party payments: a concealment method for money laundering, terrorist financing and sanctions evasion
National Risk Assessment on Money Laundering for the Netherlands 2023
National Risk Assessment on Terrorist Financing for the Netherlands 2023
National Risk Assessment on Corruption
In addition, risk indicators for money laundering and terrorist financing are also described in various reports by international organisations. Some examples: EBA Guidelines from the European Banking Authority and in a in een report from 2022 by the European Commission.