Netherlands lacks oversight of country's €70 billion gold reserve, watchdog says

The Netherlands has no clear arrangements for how its gold reserves could be used in times of crisis. The Netherlands Court of Audit has said that the Dutch central bank (DNB) has not reached any agreements with the Finance Minister about the role the reserves should play in emergency situations.

The Netherlands' gold reserves have grown sevenfold in value since 2010 and are now worth more than 70 billion euros. The country holds 612 tonnes of gold, which DNB considers a financial safety net in times of crisis or war. Other assets, including cash and shares, could lose their value during such emergencies.

The Netherlands' gold reserves could also provide an "anchor of confidence" during a crisis without being sold, according to the Court of Audit.

Another option would be for DNB to sell some or all of the gold during an emergency and pass the proceeds on to the government. However, no arrangements have been made between the central bank and Finance Minister Eelco Heinen about whether or how such a sale would take place.

The Court of Audit also questioned the Finance Minister's limited oversight of the country's gold reserves. Although Heinen can request information in his capacity as a shareholder in DNB, he rarely exercises that right.

"The minister believes this is in keeping with his role as a shareholder and DNB's independent position," the Court of Audit wrote. However, it suggested that the minister could request more information. The Ministry of Finance itself considers the management of the gold reserves one of the state's "vital interests".

The Court of Audit also noted that Heinen is unaware of the procedures used to verify that the Netherlands' gold reserves remain safely stored. DNB partly relies on confirmation from foreign central banks to ensure the gold is still where it is supposed to be.

While the investigation was underway, DNB relocated some of the country's gold reserves from the U.S. and Canada to London. The Court of Audit delayed publishing its findings following a request from the Ministry of Finance.

Before the relocation, the Netherlands held approximately 191.7 tonnes of gold in New York and 120.6 tonnes in Ottawa, representing 31.3 and 19.7 percent of its total reserves, respectively. The two locations now each hold approximately 113.3 tonnes, or 18.5 percent of the country's 612.4-tonne gold reserve. Meanwhile, the share stored in London increased from 18.1 to 32.1 percent, making it the largest foreign storage location for Dutch gold. The remaining 30.8 percent is held at the DNB Cash Centre in Zeist.

The relocation involved both selling and physically transporting gold. DNB sold almost 59 tonnes of gold in New York and purchased an equivalent amount in London. More than 27 tonnes were also physically transported from the United States and Canada to Zeist, before a similar quantity was moved from the Netherlands to London. This allowed DNB to avoid melting down gold bars that did not meet international trading standards.