Why Money Laundering Risk Is Not Limited to “High-Risk” Countries

  

Money laundering is often framed as a problem originating in politically unstable or weakly regulated jurisdictions. High-risk country lists tend to focus on corruption, poor governance, or limited enforcement capacity. While those factors certainly matter, this framing misses a critical reality as some of the most sophisticated laundering schemes operate through stable, trusted, and highly regulated economies. The Netherlands and Belgium offer a clear illustration of why AML risk is fundamentally about systems, scale, and complexity, not geography alone.

Both countries rank highly on governance, transparency, and rule-of-law indicators. Yet they have been repeatedly linked to major money laundering cases. This is not a contradiction, it is a consequence of their economic success. The Netherlands has long been a global financial and commercial hub. Since the Dutch Golden Age, Amsterdam has facilitated cross-border trade, complex financial arrangements, and intermediary-based transactions. These features remain central to modern commerce, but they also allow illicit funds to be layered and disguised within legitimate activity. Criminals do not need weak institutions when strong systems can move money efficiently and credibly.

Belgium’s experience reinforces this point. As a European crossroads, Belgium developed as a logistical and commercial intermediary. Antwerp’s diamond sector exemplifies how legitimate industries can carry inherent AML risk. Diamonds are high-value, portable, and difficult to price objectively. Over the years, Belgian authorities have prosecuted multiple diamond traders for laundering proceeds of crime by cycling funds through inflated or circular diamond trades. These cases did not arise from regulatory collapse, but from criminals exploiting trust-based commercial norms.

Scale and infrastructure play an equally important role. Rotterdam and Antwerp are Europe’s largest ports, processing millions of containers annually. The volume of trade makes full inspection impossible, creating ideal conditions for trade-based money laundering. In several investigations linked to cocaine trafficking, criminal networks used import–export companies to manipulate invoices and justify large cross-border transfers. The drugs entered Europe through world-class ports, and the profits were laundered through equally world-class commercial systems.

The financial sector has also demonstrated why advanced jurisdictions face acute AML exposure. In 2018, Dutch bank ING agreed to a €775 million settlement after prosecutors found it had systematically failed to prevent money laundering over several years. Criminal customers were able to move illicit funds through ING accounts with little scrutiny, despite the bank operating in one of Europe’s most mature regulatory environments. This was not an isolated case. In 2021, ABN AMRO reached a €480 million settlement with Dutch authorities for similar AML failings, admitting it had not adequately monitored client transactions for years.

Belgium has faced comparable issues. Belgian authorities have investigated banks and financial intermediaries linked to laundering proceeds from tax fraud, organized crime, and corruption. The Belgian branch of Danske Bank was implicated in the wider Danske Bank scandal, Europe’s largest money laundering case, which involved over €200 billion in suspicious transactions flowing through the group’s Estonian operations. While the underlying activity occurred abroad, Belgian and Dutch entities formed part of the broader financial ecosystem that allowed funds to move across Europe.

High-value sectors beyond banking further undermine the idea that AML risk is limited to certain countries. Real estate markets in Amsterdam, Brussels, and Antwerp have featured prominently in laundering investigations. Criminals purchased properties through corporate vehicles, often using layered ownership structures to obscure the true source of funds. In multiple Dutch cases, courts have ordered confiscation of properties bought with drug proceeds that had been laundered through legitimate-looking businesses. These schemes relied on market sophistication and legal certainty, not regulatory weakness.

Organised crime trends reinforce the same lesson. From the 1990s onward, the Netherlands and Belgium became central transit points for cocaine entering Europe. The profits were not sent to offshore secrecy havens; they were reinvested locally. Transport companies, restaurants, car dealerships, and logistics firms were used as laundering vehicles precisely because operating in stable economies provided legitimacy. Dutch prosecutors have secured numerous convictions against criminal networks that used such businesses to clean millions of euros in drug proceeds.

The regulatory response has often been misinterpreted. As Belgium and the Netherlands strengthened AML regimes in line with EU directives, enforcement actions increased sharply. Banks were fined, professionals prosecuted, and assets confiscated. This visibility led to a perception of heightened risk, when in fact it reflected improved detection. Jurisdictions with effective oversight tend to appear riskier because misconduct is uncovered rather than concealed.

The broader lesson is clear. Money laundering does not gravitate toward “high-risk” countries alone. It gravitates toward opportunity. Sophisticated financial systems, deep capital markets, trusted legal frameworks, and massive trade volumes create fertile ground for laundering if controls are not continuously adapted. Belgium and the Netherlands demonstrate that AML risk is as much a feature of advanced economies as it is of fragile ones.

For AML professionals, this means risk assessments must go beyond country classifications. Effective compliance focuses on sectors, products, transaction behavior, and structural vulnerabilities. The real question is not whether a jurisdiction is labeled high risk, but whether its systems allow illicit funds to blend seamlessly into legitimate economic activity. In today’s global economy, that risk exists wherever business is done at scale, even in the most trusted places.