Effects of Amsterdam’s financial administrative barriers to subversive crime

• In Event: Parallel Economy

Abstract

In recent years, the City of Amsterdam has intensified its approach on subversive crime. In addition to persecution by justice and law enforcement agencies, the administrative approach forms an important pillar in the fight against organized crime in the Netherlands. The Public Administration Probity Screening Act (‘Bibob’) allows public authorities to request a background check to assess the criminal risks regarding permits and other governmental decisions. Amsterdam is the first municipality in the Netherlands to conduct its own financial investigation into irregularities in the operations of businesses that apply for a permit to operate or for a real estate transaction. Due to changes in national legislation in 2020, local government was given the authority to appoint areas, buildings or industries subject to these permit requirements. The mayor of Amsterdam has since appointed both specific areas and specific industries where all entrepreneurs must apply for a permit. By analysing submitted financial documents, financial experts test irregularities in the administration and business operations that constitute signals of possible criminal money flows. When high risks are identified, the permit is refused and the business will be forced to close down. So far several cases have been contested and held up in court. With this method, Amsterdam applies the twenty year old Bibob-instrument in an updated manner, creating new barriers to prevent criminal money infecting legal structures. External evaluation (DSP, 2024) concluded that the instrument has been effective and has lead to better insight into the business operations of entrepreneurs. The number of companies that involve (a risk of) subversive activities has decreased, which has improved public order and safety. The assessment has namely led to an above-average number of refusals. In addition, it is plausible that the licensing requirement has a deterrent effect on rogue entrepreneurs.

Authors

• Carla Gonzalez, Municipality of Amsterdam

• Yared Stifanos, Municipality of Amsterdam