Modernising the Dutch Sanctions Framework: A Critical Analysis of the Proposed International Sanctions Act

The Netherlands is preparing the most significant overhaul of its sanctions legislation in almost 50 years. The International Sanctions Act (Wet internationale sanctiemaatregelen) is planned to replace the Dutch Sanctions Act 1977 (Sanctiewet 1977), introduce administrative enforcement alongside the existing criminal regime, and extend supervision to professions that have so far sat outside it. This article sets out the background to the reform, summarises the main features of the bill in its most recent form, and examines three areas in which the proposal remains underdeveloped.

Context behind the International Sanctions Act

The Dutch sanctions framework is centred primarily on the Sanctiewet 1977, which constitutes the principal domestic legal basis for giving effect to international sanctions obligations in the Netherlands. The act is essentially framework legislation: rather than laying down complete sanctions regimes itself, it determines how EU and other international sanctions measures are to operate within the Dutch legal order. In practice, this occurs through two principal forms of subordinate legislation.

• Where sanctions derive from binding EU or international obligations that leave little or no room for national policy choices, the substantive measures do not require transposition into Dutch law; this is notably the case for EU regulations, which are directly applicable. Ministerial regulations (termed sanctieregelingen in the act) are nevertheless adopted to facilitate their domestic supervision and enforcement.
• By contrast, where sanctions are based on non-binding international recommendations, or otherwise require national implementing choices, they may be given effect by Order in Council (algemene maatregel van bestuur, termed sanctiebesluiten in the act).

Enforcement under the current framework is essentially criminal in character: breaches of the Sanctiewet are prosecuted as economic offences under the Economic Offences Act (Wet op de economische delicten).

Although the Sanctiewet remains the cornerstone of Dutch sanctions law, it was adopted in a markedly different geopolitical and institutional context. The act was originally introduced against the backdrop of the United Nations sanctions imposed on Southern Rhodesia in 1968 and therefore predates the development of the European Union’s Common Foreign and Security Policy. However, despite profound changes in the international legal and institutional environment, and a substantial increase in the breadth, complexity and practical significance of sanctions obligations, the Sanctiewet has been amended only sparingly.

The limitations of that framework became particularly apparent following the rapid expansion of EU sanctions against Russia in 2022. The breadth and pace of change in EU sanctions legislation placed sustained pressure on Dutch monitoring, co-ordination and enforcement capacities. Against that background, a National Co-ordinator for Sanctions Compliance and Enforcement was appointed in April 2022, with a mandate to identify both immediate and longer-term improvements to the existing system. That process gave rise to a broader legislative reform project aimed at modernising the Sanctiewet, which ultimately resulted in a proposal to replace it with a new International Sanctions Act (Wet internationale sanctiemaatregelen).

The first draft bill was published for public consultation in the summer of 2024. At the time of writing, the most recent amended draft is dated 17 June 2026 (Kamerstukken II 2025/2026, 36 898, nr.7 (NvW)), and plenary debate to consider the latest amendments proposed by the Minister of Foreign Affairs has been scheduled for September 2026. Although it remains difficult to predict the precise date of enactment, the current expectation is that the International Sanctions Act will enter into force in late 2026 or early 2027. The principal elements of the proposal are outlined in the following section.

Summary of the bill proposal

The proposed International Sanctions Act introduces a number of significant innovations into Dutch sanctions law. Its principal purpose is not to alter the substantive legal bases on which sanctions are adopted, but to modernise the institutional and procedural framework through which sanctions are implemented, supervised and enforced in the Netherlands. In that sense, the bill seeks to render the Dutch sanctions regime more effective, flexible and future-proof. The main features of the bill, as it stands in the June 2026 version of the proposal, are summarised below.

Administrative enforcement

A central innovation of the bill is the introduction of administrative enforcement alongside the existing criminal law model. Under the Sanctiewet 1977, sanctions breaches are, in principle, addressed through criminal law: they qualify as economic offences under the Wet op de economische delicten and, where committed intentionally, may be prosecuted by the Public Prosecution Service. Certain forms of administrative supervision do exist under the current framework, notably in the financial sector, but they remain confined to a relatively narrow category of cases.

The proposed act would broaden the role of administrative enforcement by permitting certain breaches to be addressed through administrative law – in particular, violations of administrative obligations, such as reporting duties, and less serious substantive infringements. It also designates certain administrative authorities as enforcement bodies and creates a legal basis for the designation of additional authorities where necessary.

The bill proceeds from the premise that criminal law should remain a measure of last resort. Where an administrative response is more proportionate, the act would make a range of enforcement instruments available, including binding directions (aanwijzingsbeschikkingen), orders subject to a penalty payment (last onder dwangsom), administrative fines and, in particularly serious cases, the replacement of an undertaking’s board or management by a state-appointed administrator. The resulting dual-track model is best suited to cases in which the objective is to restore compliance rather than to punish, and reflects the growing scale and complexity of contemporary sanctions regimes.

Special enforcement powers: replacing management in cases of serious non-compliance

The bill further introduces an exceptional intervention power for cases of serious non-compliance with economic sanctions or a risk of circumvention. Where an undertaking is implicated in continuous or egregious sanctions violations, the Minister of Economic Affairs and Climate, acting in consultation with the other ministers concerned, may appoint one or more persons to replace the undertaking’s board or management. This power is not confined to cases in which an infringement has already occurred: it may also be exercised where there is a risk of serious sanctions evasion, or where the undertaking contributes to the evasion of sanctions by associated entities. The measure is therefore both corrective and preventative in character. It goes beyond ordinary supervisory and enforcement mechanisms by enabling a state-appointed administrator to assume effective control of the undertaking. The costs of the intervention may be charged to the undertaking concerned, so that they are not borne by the taxpayer.

Continuity and winding-up of undertakings

Another significant feature of the bill is the creation of a framework to manage the longer-term effects of asset freezes. The proposal addresses two situations:

• the first is to assist undertakings that may become economically isolated as a result of sanctions; and
• the second, explained in the following section, is for the management of assets subject to prolonged freezes.

In relation to undertakings, the bill empowers the competent minister to appoint a silent administrator (a distinct and less intrusive figure from the administrator who replaces management, as described above) where necessary to limit the influence of a sanctioned owner or shareholder, while ensuring compliance with sanctions. The power is reserved for cases in which the impact of sanctions on the undertaking would have serious social, economic or employment consequences in the Netherlands. The appointment may serve either to preserve the undertaking’s continuity or to facilitate its orderly winding-up. In practical terms, the administrator may seek to establish a functional separation between the undertaking and the sanctioned person, or to advise on the restructuring of the business, including the replacement of suppliers or customers.

Management of frozen registered property

The bill establishes a comparable mechanism for the management of long-term frozen registered property, including real estate, vessels and aircraft. Prolonged freezing under the applicable sanctions regulations may itself create legal, financial or safety risks. The proposal therefore allows the State to assume management where necessary – for example, to ensure the maintenance of ships and aircraft or the continued operation of leased property. The associated costs, together with a management fee, may be recovered from the owner once the freeze is lifted.

Sanctions-related entries in public registers

The bill provides a broader legal basis for making sanctions-related entries in various Dutch registers, with a view to improving transparency for citizens, businesses, notaries and supervisory authorities. At present, such registration powers exist only in a limited form, notably in connection with the Russia and Belarus sanctions regimes. The proposed act seeks to extend this mechanism to all sanctions regimes and to a wider range of registries, including the Commercial Register, the UBO registers, the land register, and the registers for ships and aircraft. Its purpose is to make visible the direct or indirect links between registered entities or assets and designated natural or legal persons.

Central reporting point

The bill also establishes a central reporting point for sanctions compliance, which would become the default channel for obligations arising under EU, UN and national sanctions regimes. This responds to a number of practical shortcomings in the current system, including fragmented reporting channels, uncertainty among reporting parties, and limited capacity for verification and pattern analysis. The reform is particularly significant in light of the increasingly detailed reporting obligations imposed under EU asset freeze regimes.

The central reporting point would receive, register, verify and analyse reports, and would share relevant information with ministries, the European Commission, supervisory authorities and enforcement bodies. It would also perform an advisory function for persons subject to reporting obligations. A key exception is the Central Import and Export Service (CDIU), which would remain the reporting point for import and export-related notifications and authorisation requests concerning sanctioned goods.

Supervision of business operations: lawyers and notaries

Lastly, the bill expands operational supervision to lawyers and notaries. Both professions would become subject to supervision of their administrative organisation and internal controls for sanctions compliance, even before the relevant EU anti-money laundering reforms enter into force. Notaries, including trainee and assistant notaries, would be supervised by the Bureau Financieel Toezicht (BFT), while lawyers would fall under the local district’s designated Dean appointed by the General Council of the Dutch Bar. The proposal reflects the fact that both supervisory structures already exercise functions under anti-money laundering legislation and have identified shortcomings in sanctions compliance, but currently lack a specific legal basis to intervene under the Sanctiewet 1977.

The likely operational requirements will be familiar from the anti-money laundering context, including internal sanctions policies, client and UBO screening, mapping of ownership and control structures, and compliance with reporting obligations. However, the reporting obligations applicable to lawyers will be subject to exceptions designed to protect the core functions of the profession. In particular, they will not apply to lawyer-client communications in connection with pending or prospective judicial proceedings. In addition, the bill preserves strict confidentiality rules for both the BFT and the Dean, reflecting the sensitivity of supervisory information obtained in relation to these professions.

Observations on the limitations of the current proposal

The case for modernisation is not seriously contested, and the bill has been broadly welcomed. Three aspects of the proposal have nevertheless attracted sustained criticism during the consultation and parliamentary stages, and each remains unresolved in the June 2026 draft.

Unclear delineation between administrative and criminal enforcement

The introduction of a dual system comprising both criminal and administrative enforcement is one of the most consequential features of the proposed International Sanctions Act, and has attracted broad support in principle as a way of closing the enforcement gap left by a purely criminal model. Concerns persist, however, that the proposal says too little about how the two tracks will operate alongside one another in practice.

The central difficulty of the proposed model is that the bill does not state with sufficient clarity which infringements will normally be dealt with administratively, which will remain reserved for criminal enforcement, or by what criteria that allocation is to be made. This matters not only for institutional efficiency but also for legal certainty: a system in which it is unclear which authority will act, under which procedure and with which sanctioning logic risks producing fragmentation rather than flexibility.

The differing roles of the supervisory bodies designated by the bill illustrate the point. De Nederlandsche Bank (DNB) and the Authority for the Financial Markets (AFM), for instance, are expected to continue focusing primarily on systemic supervision, rather than the investigation of sanction breaches, suggesting that, in the financial sector, criminal enforcement may remain the principal route for sanctions enforcement. The creation of administrative powers does not, in any event, guarantee that they will be used. Enforcement powers were already conferred on the Dutch Customs Authority under the Sanctiewet 1977, yet they are reported to have been used only sparingly.

A related concern is the risk of overlap: the same underlying conduct may trigger parallel or successive proceedings on both tracks. Parliamentary debate has accordingly focused on the principle of ne bis in idem, highlighting that the lack of clear delimitation between these two enforcement systems leaves unresolved how these different tracks should relate to one another and which instrument should take priority in cases of overlap.

Additional questions have been raised about the deterrent quality and practical effectiveness of the administrative track itself, especially in relation to the use of administrative fines. Based on the latest version of the proposal, the maximum administrative fine for sanctions violations will be the amount set for the fifth category in Article 23(4) of the Dutch Criminal Code (Wetboek van Strafrecht), which corresponds to EUR110,000 at the time of writing. That ceiling may be adequate for smaller operators, but it is difficult to see why a turnover-based model was not adopted for large undertakings. Directive (EU) 2024/1226 requires penalties for legal persons to be effective, proportionate and dissuasive, and fixes the minimum level of the maximum fine by reference to worldwide turnover (Article 7(1) and (2)); Dutch criminal law itself already contemplates turnover-based fines for legal persons (Article 23(7) of the Criminal Code). Against that background, a fixed ceiling of this order is unlikely to be dissuasive for a large corporate group.

Taken together, these criticisms do not necessarily undermine the case for administrative enforcement as such, which is arguably necessary in a sanctions landscape that requires speed, adaptability and the restoration of compliance. In its present form, however, the bill has not translated that policy choice into a workable enforcement architecture. As drafted, the system risks combining the disadvantages of both models: procedural complexity, institutional overlap, and uncertainty for the regulated parties. If the dual-track model is to deliver more effective and efficient enforcement, these points will need to be resolved before the act is adopted.

Intervention powers without a clear escalation ladder

If the debate on enforcement architecture concerns the distribution of powers between authorities, the bill’s special intervention mechanism raises a different question: how far the State may, or should, intervene in the internal governance of a private undertaking in order to secure compliance with economic sanctions. As noted above, where an undertaking is involved in a serious sanctions violation, where there is a risk of circumvention, or where the undertaking facilitates circumvention by others, the act would empower the Minister of Economic Affairs and Climate to appoint an administrator to replace its board or directors. This goes well beyond ordinary supervision or the other forms of administrative enforcement in the bill: it allows the State to assume direct control of the governance and operation of a private company.

The measure is not unprecedented, but the principal criticism of it is the absence of any graduated enforcement framework. Comparable tools in other regulatory sectors usually treat these measures as a last resort, deployed only when all other options have failed. The International Sanctions Act, by contrast, does not articulate an escalation ladder, the conditions under which the power becomes available, or why lesser measures would not suffice in a given case. The result is a real risk that the power will be exercised disproportionately.

A second, practical objection concerns the commercial consequences for the undertaking itself. The appointment of an external administrator may disturb financing arrangements, trigger contractual change-of-control clauses, unsettle suppliers and counterparties, and damage market confidence. In complex group structures and cross-border ownership chains, those effects may spill over well beyond the intended target. If the objective is to secure compliance while preserving the value of the business, the power will need to be accompanied by safeguards that prevent it from damaging what it is intended to protect.

One final and central issue with this special intervention power is the proposal’s limited guidance on the qualifications, independence and availability of administrators. An administrator appointed for this purpose would need not only governance experience but also a working command of sanctions law, compliance operations, corporate finance and stakeholder management. The bill provides no basis for their selection, and no indication that a pool of suitably qualified candidates exists, nor does it say much about how administrators would be supervised or remunerated. None of this defeats the case for the power, but it does suggest that the bill has yet to justify either its scope or its design.

The legal profession, confidentiality and legal protection

The third area of criticism concerns the extension of sanctions-related reporting and supervisory obligations to lawyers and notaries, and the consequences for the role of the legal adviser. The tension between reporting obligations and confidentiality is not peculiar to Dutch law; it arises under EU sanctions law as well. In relation to the reinforced reporting obligations introduced in Article 8 of Regulation (EU) 269/2014, the Commission has expressly recognised that, in principle, these duties do not extend to information received as part of legal representation in court proceedings, subject to the rights to effective remedy and defence.

The International Sanctions Act proposal attempts a similar distinction between reportable information and protected communications, but defines neither with sufficient precision. The difficulty is most acute in hybrid mandates, where a single firm advises on a transaction, provides compliance advice and acts in related proceedings. In those circumstances, it may be far from obvious which information remains protected and which must be reported. The current draft offers no criteria for drawing that line, which invites both inadvertent breaches of confidentiality and failures to report.

A second concern relates to the onwards transmission of information by the Dean. Under the proposal, lawyers would report to the local district’s designated Dean, who is in turn bound by confidentiality. That duty does not, however, guarantee that the information remains protected once it is passed on to the central reporting point or reflected in a public register. Without clearly delineated safeguards, the result may be an indirect erosion of privilege, and in practice a route by which the State obtains access to confidential legal communications.

A third concern is the effect on access to legal assistance. Faced with heavier reporting burdens and uncertain boundaries, some lawyers may become reluctant to accept instructions from sanctioned or sanctions-affected clients even where they are perfectly entitled to act. In principle, however, those clients remain entitled to legal advice and representation, including in matters far removed from sanctions evasion or asset concealment. A framework that indirectly discourages representation therefore risks undermining not only professional confidentiality, but also practical access to justice.

Taken together, these criticisms suggest that the bill has not yet found a stable equilibrium between the legitimate enforcement demands of sanctions law and the protections owed to legal privilege, confidentiality and effective legal representation. If lawyers and notaries are to be brought more fully within the sanctions supervision framework, the act will need to articulate safeguards tailored to these professions.

Conclusion

The case for replacing the Sanctiewet 1977 is a strong one. The current framework was designed for a different era of sanctions practice, and the institutional machinery it supports has visibly struggled with the volume and pace of EU measures adopted since 2022. The International Sanctions Act addresses that problem at the right level: institutions, procedures and enforcement instruments.

What the June 2026 draft has not yet done is convert those choices into a framework that businesses and their advisers can plan around. The boundary between administrative and criminal enforcement, the threshold for replacing a company’s management, and the treatment of privileged communications are all matters on which the bill leaves the essential question open. These are not drafting details; they determine how the regime will operate for the parties subject to it. With plenary debate scheduled for September 2026, there is still time to address them, and good reason to do so before the act enters into force.

Pending the adoption of the International Sanctions Act, practitioners are recommended to closely monitor further amendments to the bill, and to treat the interim period as an opportunity for compliance preparation in anticipation of its entry into force.