Estimating Money Laundering Risks: An Application to Business Sectors in the Netherlands

Joras Ferwerda*, Edward R. Kleemans

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review

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Abstract

Current money laundering policies often rely on the same prescribed instruments for many business sectors. For ‘risk based’ policies, however, it is important to know in which business sectors money laundering risks are relatively higher. This paper builds upon work conducted as part of Identifying and Assessing the Risk of Money Laundering in Europe (IARM) project and focuses on money laundering risk assessment in the Netherlands. In this paper, we discuss theoretically and empirically how these risks can be estimated and we present results based on data regarding business sectors in the Netherlands. The used risk factors include data on organised crime investments, beneficial owners, and confidential information from the Dutch Tax Office on anomalies in tax declarations by companies. Our results indicate that casinos, hotels, and the art and entertainment sector have the highest money laundering risks in the Netherlands.

Original languageEnglish
Pages (from-to)45–62
Number of pages18
JournalEuropean Journal on Criminal Policy and Research
Volume25
Issue number1
Early online date26 Jun 2018
DOIs
Publication statusPublished - 1 Mar 2019

Keywords

  • Money laundering
  • Organized crime
  • Principal component analysis
  • Risk assessment

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