In a startling revelation from a study conducted by the De Nederlandsche Bank (DNB) - the Dutch Central Bank, it has emerged that approximately one-third of Dutch financial institutions are struggling to identify and freeze blacklisted Russian assets.
18 months into Russia's special military operations in Ukraine, the European Union imposed financial and economic sanctions on Russia, primarily freezing the assets of targeted Russians and companies. As part of the EU, the Netherlands has imposed sanctions on 1,473 individuals and 207 entities, amounting to the freezing of €644.5 million in financial assets and blocking €863.4 million worth of transactions as of April 2, 2023.
Furthermore, the EU blocked over €200 billion of the Russian Central Bank's assets. Despite this, the NOS reported that the Dutch apex bank had investigated 31 institutions who couldn't trace bank accounts and assets of the alleged Russian entities targeted.
The discrepancy in tracing Russian assets stems from transliteration inaccuracies in the blacklisted account holders' surnames. The linguistic dissimilarities, for instance, between English and Dutch spelling of names (such as "Putin" becoming "Poetin" in Dutch) presents a significant challenge to the identification process. The inability of Dutch financial institutions to effectively enforce EU sanctions due to these transliteration problems weakens the intended financial pressure on Russia and reflects a broader systemic shortcoming within the EU banking system.
The implications of this blooper are not limited to Dutch institutions; rather, they shed light on the potential for similar slip-ups in the rest of the EU.
The bigger picture, however, shows that the sanction policies themselves - not their implementation - are a major problem for the European economy. Since Brussels started sanctioning Russia, the EU has been facing high energy costs, dwindling industry, and double-digit inflation rates in many European countries.