The Dilemma of Netherlands: Soft Drug Policy vs. Narco-State

Blog / Netherlands' Dilemma: Soft Drugs vs. Narco-State

Law enforcement is not considered to be the major technique for combating drug misuse under the Netherlands' national drug abuse policy, except for more severe drug trafficking levels. The Dutch government pursues an approach that recognizes that the usage of illicit substances is an unavoidable part of life in today's culture and embraces this reality. The official responses are geared toward mitigating the damage done to individuals and the community. The amended Opium Act of 1976 serves as the foundation for the nation's drug policy. This act was passed in 1976 with the intention of dividing the markets for hard narcotics and soft drugs like cannabis. These substances, along with others like cocaine, LSD, morphine, and heroin, are illegal in the Netherlands, just as they are in every other nation.

The retail sale of cannabis is permitted at several establishments referred to as "coffee shops." In point of fact, the latter are businesses in which cannabis is sold in accordance with very stringent restrictions, but neither alcoholic beverages nor their use takes place there. It does this by concentrating the attention of law enforcement on the upper levels of the supply chain. Also, there is a limited amount that can be sold to a person. However, it is against the law to sell or create drugs, possess a particular number of drugs that is more than the limit established by the government, or possess a number of drugs that is greater than the limit imposed by the government. 

On the other hand, the use of hard drugs is largely seen as a public health issue. Easy-to-access government welfare services, methadone therapy, alternative drug treatment institutions, and sharps disposal are all policy components addressing hard-drug usage. The Dutch Public Prosecution Service does not arrest members of the public for having or using small amounts of soft drugs. Nonetheless, as previously stated, they prosecute all other types of soft or hard possession of cocaine, sale, or manufacturing. 

Leveraging AML Procedures To Combat Illicit Trafficking In Narcotic Drugs

Moving on to a weighty issue, in the Netherlands, like in other nations, narcotics are a source of trouble and crime. In response, the government is placing stricter regulations on coffee shops, demolishing cannabis-growing businesses, and reducing the manufacturing and distribution of dangerous narcotics. Moreover, people who are addicted to narcotics have access to treatment services. These regulations are indirectly contributing to AML compliance since many people can take advantage of the legalization and make it a business.

Moreover, since 1976, it has been a fundamental concept of Dutch drug laws to separate the 'soft' and 'hard' drug trade. According to the Opium Act Directive, the Dutch drugs policy seeks to discourage and minimize drug use, particularly insofar as it causes harm to health and society, and to prevent and reduce the harm connected with drug use, drug manufacturing, and the drugs trade which leads to money laundering since many businesses are trying to legalize their activity. The 1995 white paper titled "Drug Policy: Continuity and Change" outlines exhaustively the fundamentals of the Dutch policy on illegal substances. It takes a balanced approach by distinguishing between "soft" and "hard" medicines. It identifies four primary goals: 

  • To prevent drug usage and to cure and restore those who use drugs. 
  • To decrease damage to users. 
  • To reduce the public disturbance brought on by drug users. 
  • To fight drug manufacture and distribution.

A succession of policy letters has been used to develop the Dutch cannabis legislation. The "Letter describing the new Dutch policy" (2009) put a greater focus on avoidance and usage decrease and revised the "coffee shop" approach. According to the expediency principle, the state attorney has the authority to not prosecute a criminal act if it is seen to be in the public's best interest. This strategy serves as the foundation for the "coffee shop" policy, which permits users to purchase cannabis at coffee shops, protecting them from coming into touch with harder narcotics. Since 1996, the sale of small quantities has been permitted, provided that coffee shops abide by the following characteristics: no ads, no sale of illegal substances, no public menace in and around the coffee shop, no admission or selling to underage people, no selling of huge volumes per payment (maximum 5 g), and a maximum in-store stock for sale of 500 g. In 2013, a further condition was added: coffee shop admission and sales are restricted to Dutch citizens, but local variations in the application of this requirement are permitted.

Who is responsible for administering the Dutch Drug Policy? 

Multiple ministries are responsible for drug policy to develop a unified approach. The Ministry of Health, Wellbeing, and Athletics is accountable for treatment, prevention, and general coordination. The Ministry of Justice is responsible for law enforcement, whereas the Ministry of the Interior and Kingdom Affairs handles local government and security concerns. At the nation's territory, customs officials and the Royal Netherlands Military Constabulary support the agencies.

Is the Netherlands a Narco-state?

Figure a. Share of respondents who used cannabis in the Netherlands from 1997 to 2020, by day of use

Figure b. Risk index score of money laundering and terrorist financing in Belgium, Luxembourg and the Netherlands (Benelux) from 2016 to 2021

As Figure a. shows, the highest percentage over the years is the one of those who have never tried cannabis (weed) in the Netherlands between the years of 1997 to 2020; and it’s clearly not decreasing anytime soon, which makes us realize that there isn’t a direct correlation between cannabis accessibility and its usage. This does not neglect the fact that certain people use it either in open, allowed spaces or even in bulk which is a way for money laundering. 

Moreover, Five Dutch banks (ABN AMRO, ING, Rabobank, Triodos Bank, and de Volksbank) have chosen to form Management Reporting Netherlands (TMNL) to combat money laundering and terrorist funding. The TMNL project will supplement the individual transaction monitoring operations of the institutions. TMNL will concentrate on finding anomalous transaction traffic patterns that financial institutions cannot recognize. Today, the shareholders' agreement was reached.

As for figure b, there is a decrease in the risk index score of money laundering and financial crimes after 2016 which can be explained by different factors such as including AML compliances and implementing regulations in the country regarding drug possession and use. 

Uncovering the Compliance Framework Against Money Laundering and Terrorist Financing in the Netherlands

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