Dutch banks fear to fund sex and drug businesses

HSLotsof at aol.com HSLotsof at aol.com
Sun Jul 21 20:25:07 EDT 2002

>From another list.

Dutch banks fear to fund sex and drug businesses

By Melanie Cheary

AMSTERDAM, July 18 (Reuters) - In the Netherlands prostitutes pay tax and 
brothels are legal. Marijuana can be sold and you can smoke it in a trendy 
coffee shop.

Sex and drug industries, banned and punished around the world, make millions 
every year as tourists rush to savour the pleasures. Brothels and cannabis 
coffee shops are an integral part of the Dutch small business sector.

Like every entrepreneur, prostitutes and soft drug retailers need financing. 
The country's big banks could reap healthy proceeds from these industries 
that have a combined annual turnover of one billion euros ($1.01 billion).

But banks are still afraid of risking their reputations by associating with 
businesses whose legal status is either still too new or too dubious, coffee 
shop owners say.

Shaking his head in frustration, the proprietor of a popular coffee shop on 
one of Amsterdam's busy canals says: "No way. Not possible," when asked if 
his bank would give him a loan.

Asking to remain anonymous, he says business is flourishing and his shop is 
certainly packed. An elderly man sits in the corner, flicking through a 
newspaper, joint in hand. A crowd at a table erupt into laughter. The room is 
heavy with the fragrant smoke from cannabis.

Regulars and dreadlocked backpackers alike enjoy his menu from Mother's 
Finest Marijuana that gives you a "silly, laughing feeling" to Sky High Hash 
that is likely to put you to sleep.


About 900 licensed coffee shops are regulated in the Netherlands and each 
generates on average an annual turnover of about 400,000 euros. Those near 
the borders with Germany and Belgium rake in as much in just a month.

But the status of the sector is complicated.

Cannabis is illegal but is tolerated and decriminalised. Coffee shops can 
sell cannabis and you can buy it, smoke it or take it away without fear of 
arrest or prosecution.

But there are certain limits. Coffee shops are not allowed to advertise, no 
transaction is allowed to be more than five grammes and the drug cannot be 
sold to minors.

It is punishable to produce cannabis in large quantities or supply coffee 
shops, creating a double-standard.

These fuzzy areas are why banks say they don't do business with cannabis 
shops. On the other hand, banks are forced by law to offer the same financial 
services to prostitutes and brothel owners as to any other small business 

"Anyone can apply for a business account and we check whether they're legal 
or illegal. Prostitution is legal and at ABN AMRO prostitutes can get an 
account. Where coffee shops are concerned, we're entering an area where 
nothing is black or white," said ABN AMRO spokesman Geert Pielage.

"By law, coffee shops are tolerated but they are formally illegal. We just 
don't deal with coffee shops," he added.

Coffee shop owners doubt banks' reasons and say they are simply too afraid of 
offending overseas clients in countries like the United States, which has 
tough laws on soft drugs.

"Most of the banks don't want anything to do with coffee shops. You get 
absolutely no credit. You can be one euro in the red and they're knocking at 
your door," said Nol van Schaik, founder and owner of numerous coffee shops.

"Banks like ING and ABN AMRO have such big business in the United States and 
they don't want to risk what people will think if they know they're doing 
business with coffee shops," he said.


Nowhere is the sex industry more legal than in the Netherlands, where the 
world's oldest profession has been protected by law for almost 200 years.

In 1988 it was officially defined as a legal profession and prostitutes 
joined the service sector union. They have paid income tax since 1996. But 
brothels held the same status as coffee shops until they were legalised last 

Until recently prostitutes struggled to open business bank accounts which 
they wanted in order to show that their income was not personal and that 
expenses -- like condoms and sex toys -- could be tax-free and tax-deductible.

But last year the Rode Draad (Red Thread), which represents the 30,000 Dutch 
prostitutes, challenged banks who wouldn't give commercial accounts, on the 
grounds of discrimination.

The group laid a charge against ING with the Office of Fair Treatment. ING, 
which said at the time it didn't want its name tied to sex because it might 
offend other clients in the 65 countries it operates, capitulated before the 

The Rode Draad says that now prostitutes are entitled to all the commercial 
services on offer to any other entrepreneur but prostitutes in Amsterdam's 
thriving Red Light district say the reality is far from fair.

"The women tell me that what banks are told they must do and what they do is 
completely different. They say the banks are happy to take their money but 
they won't give them money for the things they must buy," said a former 

($1-.9906 Euro)

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