Netherlands financial institutions have problems with freezing Russian assets

Banks and other financial institutions in the Netherlands have performed significantly below expectations when it comes to freezing assets as required by the sanctions lists released following the Russian invasion of Ukraine. Roughly one third of Dutch financial firms are unable to track down and freeze the assets - investigation conducted by De Nederlandsche Bank (DNB), the central bank of the Netherlands.

Amateurish mistakes and a lack of accountability has been the driver behind many of the problems, Nieuwsuur reported. This was after the DNB examined 31 institutions which are required to implement the sanctions. A total of 1,473 people are listed on the sanctions lists, as well as 207 organizations from small businesses on up to the Wagner Group and Russia’s central bank.

One of the problems is that they do not always search for every spelling of a name on the sanctions list. In English, the last name of the Russian president is spelled “Putin,” however in Dutch, the spelling is “Poetin,”.

"These are really kindergarten mistakes. In the sanction regulations, the name of the sanctioned person is often spelled in five ways, so in English, Dutch, Russian, Ukrainian and then possibly an extra spelling because this has been handled poorly before," said Heleen over de Linden, an attorney currently working towards a PhD in economic sanctions.

If the situation does not improve, the DNB could rebuke those financial institutions which have failed to carry out their tasks.

Just 6 million euros in assets were frozen in the first month after sanctions were announced, figures which were rapidly put to shame by other European nations. After parliamentarians voiced their disapproval, financial institutions and the Dutch government managed to freeze another 634 million euros in assets before the summer of 2022. Nearly a year later, that total has barely increased from 640 million to 644.5 million euros.

Representatives of the Ministry of Finance and the Ministry of Foreign Affairs said that the sanctions totals have stalled because enforcement has already been taken against the names currently on sanctions lists. When new names are added, they often have less significant amounts of assets compared to previous enforcement.

The Dutch Banking Association (NVB) did acknowledge that the “speed and complexity of the tasks which banks must perform” certainly presents challenges when enforcing sanctions. The banks have to do better, the organization said, but the Cabinet could help by creating one single point-of-contact for any questions pertaining to sanctions.

Source: NL Times