Dutch bank stops banking for marihuana outlets
This headline will attract the attention for sure. What is going on in The Netherlands? Wouldn’t it be news if a bank did accept money from drug sales? How come it is news that a bank stops doing that; they should have done that years ago, right ?
Let’s start at the beginning. In The Netherlands, Europe, the law distinguishes soft drugs (hash, marihuana) from hard drugs (xtc, cocaine, heroine). Both are technically illegal to possess. But: as far as soft drugs are concerned, you will not be prosecuted for possession of a small amount of soft drugs. That means that the police will not arrest you for it, and does not focus on this type of crime. How do people get the soft drugs ? They can grow it themselves or buy it in what Dutch call “coffeeshops”; soft drugs outlets. These “coffeeshops” are allowed (again: technically it is illegal but prosecution guidelines have been adapted) to have an inventory of 500 grams of soft drugs. There are strict rules against advertizing, sale to persons under 18 years old etc. Interestingly enough, for these “coffeeshops” it is also technically illegal to buy their soft drugs from suppliers. Usually the coffeeshops buy from people who grow marihuana at home. This supply is, according to several sources, dominated by (guess what?) criminals. The amount of money involved in the business is at this moment probably a bigger concern than the drugs itself; controlling the supply side will make you a rich man or woman. And the race to be the big kahuna leads to violence, related crime and of course money laundering. Crime related to the actual use of soft drugs does not bother too many Dutch.
By the way; “coffeeshops” pay taxes but are not obliged to keep detailed records of the persons of which they buy the soft drugs, for obvious reasons.
And since the “coffeeshop” business is accepted in The Netherlands, these businesses have bank accounts which they use to deposit their proceeds, which include the profits of drugs sales. In an international context that is a very interesting situation. No matter what; these banks are technically accepting proceeds of crime. And they do it knowingly and with intent. Full blown money launderers? The prosecution guidelines do cover the “coffeeshop” business but do not explicitly cover related “money laudering”. Although no Dutch public prosecutor will prosecute banks in this scenario, international regulators will likely have a different view on this issue.
The impact of international regulations on the banking industry will have wider consequences on the Dutch practice of not prosecuting the “coffeeshop” business. So a Dutch bank decided to get rid of all “coffeeshops” and exit them as clients. What will other Dutch banks do? Accept these clients and become a magnet for them? Will “coffeeshop” entrepreneurs try start their own “bank of hash & marihuana”? According to some research, The Netherlands has approximately 730 “coffeeshops”. In a couple of months we will see where they will take their revenue for banking (or should we still say: laundering?).
http://www.telegraaf.nl/binnenland/2785834/__Postbank_werkt_coffeeshop_eruit__.html?p=2,1
