A group of major Dutch banks have set up a system to help them detect the layering stage of money laundering.

Five major banks in the Netherlands have now jointly established and funded a transaction data sharing system, Transaction Monitoring Netherlands (TMNL). The participating banks encrypt their transaction data and send it to TMNL, so that all their transaction data is pooled and TMNL can monitor the transactions as a whole. Data is exchanged only where necessary and legally permissible, in order to forestall privacy complaints.

Laundering of the proceeds of crime is typically done in three steps, beginning with the placement of the money in one account and ending with it being integrated into a legitimate account ready for legal use. In between these steps, the money is usually moved through several other accounts in different banks. Each bank can monitor transactions only in accounts that it administers, but cannot see what happens in other banks and so cannot spot a suspicious series of linked transactions. This layering process makes the origin of the money difficult to trace...