White-Collar Crime 2021

Last Updated October 21, 2021

Netherlands

Law and Practice

Authors



Lumen Lawyers is a progressive niche firm that specialises in corporate criminal law and internal investigations. Lumen Lawyers was established in October 2019. In 2021, it already has a strong market presence, reflected by an impressive track record of both domestic and international high-profile cases and media attention. The firm’s clients include financial institutions, corporates, executives and other individuals. Its team benefits from unique Dutch court and regulatory experience and legal experts who think outside the box, bringing invaluable insights to clients on Dutch enforcement agencies’ investigations and decision-making practices.

Minor Offences and Crimes

According to Dutch criminal law, criminal offences are divided into minor offences and crimes. The Dutch Criminal Code (DCC) and special statutes such as the Economic Offences Act (EOA) state whether a criminal offence constitutes a minor offence or a crime.

Constituent Elements

In general, the constituent elements for criminal liability for crimes are:

  • the prohibited act or omission (actus reus); and
  • the necessary state of mind (mens rea) – negligence or intent (at least conditional intent/dolus eventualis (ie, knowingly and willingly accepting the considerable chance that a certain consequence would materialise)).

Attempt and Preparation

An attempt to commit a crime is punishable where the offender manifests their intention by initiating the crime (Section 45, DCC). An attempt to commit a minor offence is not punishable. 

Preparation to commit a crime, which carries a statutory term of imprisonment of eight years or more, is also punishable (Section 46, DCC).

The general limitation period for minor offences is three years (Section 70, DCC).

For crimes, limitation periods are linked to the statutory punishments for the crimes (Section 70, DCC).

  • For crimes punishable with imprisonment for up to three years, the limitation period is six years.
  • For crimes punishable with imprisonment for more than three years, the limitation period is 12 years.
  • For crimes punishable with imprisonment for more than eight years, the limitation period is 20 years.
  • For crimes punishable with imprisonment for more than 12 years and several other serious crimes, the statute of limitations does not expire.

Start of Limitation Period

In general, the limitation period starts to run on the day following the day on which the offence was committed (Section 71, DCC). An act of prosecution interrupts the limitation period, after which a new limitation period starts. The right to prosecute crimes expires after the limitation period has expired twice.

The limitation period for continuing offences starts on the day after the criminal act ends.

The Dutch enforcement authorities and courts have jurisdiction over criminal offences committed on Dutch territory.

Criminal offences committed abroad by a Dutch national may also be prosecuted in the Netherlands, if the particular offence constitutes a criminal offence both in the Netherlands and in the country where the offence was committed.

Moreover, the Dutch enforcement authorities and courts have jurisdiction over acts committed abroad that victimise a Dutch national or violate national interests.

Dutch criminal law does not have specific acts governing white-collar offences, such as foreign bribery, that establish extraterritorial jurisdiction.

Corporate Criminal Liability

Pursuant to Dutch criminal law, it is possible to hold legal entities liable for criminal offences.

Criminal liability can be attributed to a legal entity if the offence can be "reasonably" imputed to the legal entity (ie, when the (illegal) conduct took place within the "sphere" of the legal entity). Such conduct can be considered to have taken place within the sphere of the legal entity in one or more of the following circumstances:

  • the act was committed by someone who is employed by, or works for, the legal entity;
  • the act was part of the normal business activities of the legal entity;
  • the legal entity benefited from the act; and
  • the legal person had the power to decide whether or not the conduct took place and accepted this or similar behaviour.

These criteria apply to the question of attribution of the illegal conduct to the legal entity. If the legal entity is accused of a crime, which requires intent or negligence, this must also be proven in order for the legal entity to be criminally liable. 

In the context of a merger, acquisition or bankruptcy of a company, a successor entity may be held criminally liable for acts of the previous entity, if according to the "social reality" of the situation, the successor is in fact a continuation of that entity.

Individual Liability

If the criminal offence can be imputed to a legal entity, the person, or persons, within that entity who "directed" or "ordered" the prohibited conduct may be held criminally liable as well. In order for such an individual to be criminally liable, they must have knowingly accepted the considerable chance that the conduct would occur, while being authorised and reasonably obliged (to take measures) to prevent/end the illegal conduct, but failed to do so.

Although an individual can only be held criminally liable if the criminal liability of the legal entity has been established, the Dutch Public Prosecution Service (DPPS) has the discretion to prosecute only the individual, only the legal entity or both.

In practice, the DPPS often enters into an out-of-court settlement with a legal entity and, as part of that settlement, agrees to not prosecute any individuals. However, a trend can be observed in which individuals are increasingly excluded from settlement agreements and indicted more often (see 1.6 Recent Case Law and Latest Developments).

Compensation for Damages

Victims of criminal offences, including white-collar offences, may seek compensation for damages as a result of an offence by joining the criminal proceedings at the court in question as an aggrieved party.

If the court considers the claim of the aggrieved party to impose a disproportionate burden on the criminal proceedings, it will render the claim inadmissible, after which the aggrieved party may still file the claim in a civil procedure.

Class Actions

There are no precedents for claims for mass damages joined to criminal proceedings. Class actions would – most likely – impose a considerable (and disproportionate) burden on the criminal proceedings.

Instruction on Large Out-of-Court Settlements

Large out-of-court settlements have been the subject of considerable debate in the Netherlands, especially after (i) the settlement between ING Bank and the DPPS with regard to (failure to prevent) money laundering, where ING Bank paid EUR775 million to the DPPS (2018), and (ii) the settlement with ABN AMRO Bank where ABN AMRO Bank paid EUR480 million to the DPPS (2021) with regard to (failure to prevent) money laundering. The DPPS has wide discretion to enter into such large out-of-court settlements, which discretion has been the subject of criticism from wider Dutch society.

The Instruction on Large Out-of-Court Settlements (Instruction) comprises guidelines from the Council of Attorneys General to the DPPS in relation to such settlements and was adjusted in September 2020. According to the Instruction, an out-of-court settlement is considered "large" if it has a fine component of EUR200,000 or has a total transaction value of EUR1 million or more. An independent review committee will assess the transaction and advise the Council of Attorneys General, before the Council can approve the transaction. The independent review committee includes (in alternating form) a former attorney, a former judge, a professor of Dutch criminal law and a former prosecutor. Although it seems that the committee has not always fully agreed with the motivation of the DPPS regarding every proposed large out-of-court settlement, the committee has unconditionally approved all settlements it advised on. Previously, the Minister of Justice needed to be consulted before a large settlement could be offered, which is no longer the case.

A legislative proposal for a judicial test in relation to large out-of-court-settlements is currently forthcoming. This proposal – if adopted – will replace the Instruction. According to the proposal, permission from the Court of Appeal will be required for transactions "within the sphere of the legal entity" with a fine component of EUR200,000 or more or with a total transaction value of EUR1 million or more. The Court of Appeal will assess (i) whether the legal requirements for offering a transaction are met; and (ii) whether the public prosecutor, taking into account all relevant interests, could have reasonably come to the (provisional) transaction offer.

Enhanced Focus on (High-Ranking) Individuals

A trend of pursuing potentially culpable individuals (often high-ranking) in white-collar investigations can be observed. In line with this trend, individuals, including executives, are increasingly excluded from settlement agreements and more often indicted. This trend is reflected in the following cases.

In December 2020, The Hague Court of Appeal ruled that the DPPS must prosecute Ralph Hamers, former CEO of ING Bank, over his role in the alleged money laundering offences that the bank settled in 2018 (see above). The DPPS had previously decided that there was insufficient evidence for a successful prosecution of individuals in relation to the case. The Court of Appeal considers it important that the standard is confirmed in public criminal proceedings and that bank directors cannot go unpunished if prohibited conduct actually took place during their leadership. 

Since April 2021, the DPPS has considered three former members of the Executive Committee of ABN AMRO Bank to be suspects in an investigation in relation to the alleged failure to prevent money laundering for which ABN AMRO Bank settled with the DPPS (see above).

Enhanced Focus on Facilitators

Moreover, Dutch investigating authorities are increasingly focusing on the "facilitators" of illegal conduct, such as accountants, external auditors and financial institutions.

Monopoly on Prosecution

The DPPS has a monopoly on the prosecution of crimes and it has discretion to decide whether or not to prosecute. The National Office for Serious Fraud, Environmental Crime and Asset Confiscation (Functioneel Parket) is a national division of the DPPS and is specialised in the investigation and prosecution of white-collar offences. The Fiscal Intelligence and Investigation Service (FIOD) is the authority which is often instructed by the National Office for Serious Fraud, Environmental Crime and Asset Confiscation to conduct investigations regarding (more complex) white-collar offences.

Other Enforcement Authorities

There are various authorities which are responsible for the administrative enforcement of white-collar offences, including:

  • the Tax Authorities;
  • the Dutch Central Bank (DNB);
  • the Dutch Authority for the Financial Markets (AFM);
  • the Dutch Authority for Consumers and Markets (ACM);
  • the Netherlands Food and Consumer Product Safety Authority (NVWA);
  • the Financial Supervision Office (BFT); and
  • the Inspection Service of the Ministry of Social Affairs and Employment (ISZW).

There are no specialised criminal courts for white-collar offences, which can be tried before any national court. Some national courts have chambers specialised in specific sub-areas of law (ie, specific categories of criminal offences).

The DPPS has the discretionary power to decide which persons or entities, and which cases, will be investigated. The DPPS has published guidelines in relation to the investigation and prosecution of several offences. 

Most white-collar investigations are started by the DPPS on the basis of:

  • self-reporting by corporations;
  • a criminal complaint
  • information from the media;
  • tips from third parties, such as banks or accountants; or
  • information from the Dutch tax authorities or other national authorities.

If the DPPS decides to not (further) investigate and/or prosecute, an interested party such as the victim, may file a complaint at the Court of Appeals to order the DPPS to (further) investigate and/or prosecute. 

The Dutch Code of Criminal Procedure (DCCP) provides the DPPS with a range of powers to gather evidence in cases of suspected or alleged white-collar offences.

Demand to Produce Documents

Section 96a of the DCCP allows the investigative authorities to order companies to produce documents in relation to the suspicion of a crime for which pre-trial detention is permitted. The investigative judge may also give such an order in relation to the suspected crimes for which pre-trial detention is not permitted (Section 105, DCCP). These orders may not be directed at suspects. Sections Iva and V of the DCCP also provide for several special investigative powers regarding data/documents that may be requested from companies.

Raids

Companies' premises may be searched ("raided") by a public prosecutor in relation to a suspected crime for which pre-trial detention is permitted (Section 96c, DCCP). An investigative judge may also search the premises of a company (or a residence) in the case of a suspected crime for which pre-trial detention is not permitted (Section 110, DCCP).

Powers Based on Economic Offences Act

If a suspicion is based on an offence listed in the EOA, the authorities may order companies to allow inspection of documents and data in the interest of the investigation if this is "reasonably necessary" to fulfil their duties (Section 18, EOA). It is also permitted to address such orders to suspects.

Questioning

The investigative authorities may request a company, its director and/or other employee to submit to an interview in relation to a suspected criminal offence. If that company, director and/or employee is a suspect, there is no obligation to answer any questions since a suspect has the right not to self-incriminate and the right to remain silent. Suspects must be cautioned by the authorities (ie, informed of their right to not answer any questions). Suspects also have the right to consult an attorney prior to the interview and the right to be assisted by an attorney during the interview.

If the request for an interview is directed to a company, director or employee, who or which is a witness, only an investigative judge may compel them to submit to such questioning.

If a company is requested to submit to an interview, the company will need to authorise a person who can be questioned as a representative of that company.

The use of corporate investigations by professionals, such as lawyers and (forensic) accountants who are instructed by the company, is a standing practice in the Netherlands. Most major settlements with the DPPS are based on such investigations. Dutch (criminal) law does not provide for a specific statutory framework in relation to internal investigations (ie, there is no statute describing when or how to conduct an internal investigation). However, if a company suspects misconduct, conducting an internal investigation is often inevitable in order to take adequate action; corporate governance rules can oblige a company to investigate signs of misconduct. If (the higher management of) a company ignores signs of misconduct, this may lead to civil or criminal liability of the company and the management, especially if incidents reoccur. Conducting an internal investigation and informing the enforcement authorities of (the results of) the investigation may be viewed as co-operation with the authorities, which may influence those authorities' decisions over whether and how to (further) investigate/prosecute.

The practice of internal investigations conducted by professionals has been subject to debate in Dutch society. In a letter to the parliament of 8 April 2020, the Minister of Justice elaborated on the requirements that determine the value of such internal investigations. The Minster stated that the internal investigation must be sufficiently in depth, complete and correct. To meet these requirements the results of the investigation must be presented in a transparent and verifiable manner. The results of an investigation will be checked and verified by the FIOD. The Minister emphasised that lawyers who may conduct such an investigation are bound by their professional rules. The Minister also stated that the DPPS aims to employ independent investigations conducted by professionals more frequently in the future, as part of the criminal investigations of the DPPS. If the internal investigations meet the above-mentioned requirements, and the FIOD/DPPS are able to verify the results of the investigations, the Minister stated that there will be sufficient insight into any (potential) undesirable effects of this practice.

In May 2021, the General Council of the Dutch Bar Association (GC) clarified Rule of Conduct 2 about "partiality" in relation to the role of attorneys when conducting internal investigations. The GC stated that internal fact-finding is part of the professional practice of attorneys, since it relates to determining the legal position of the client. The GC emphasises that, while conducting an internal investigation, an attorney must not allow any misunderstanding in relation to their capacity as partial representative of the client and must safeguard their independence. The GC highlights a number of risks of which an attorney who is conducting an internal investigation must be aware of to ensure that no core values and disciplinary rules are violated. 

In addition, when conducting an internal investigation, rules in relation to labour law and privacy and data protection law must be followed by the investigators.

EU Context

As an EU member state, the Netherlands is part of an EU-framework to facilitate co-operation between EU member states in criminal matters. The European Investigation Order (EIO) makes it possible for the DPPS to have requests for gathering and transferring evidence (ie, seizures, asset freezing, interviewing witnesses, etc) executed without additional formalities in other member states (Sections 5.1.1–5.8.17, DCCP). A Dutch public prosecutor can also participate in a Joint Investigation Team with other prosecutors from the EU (Sections 5.2.1–5.2.5, DCCP).

On the basis of a European Arrest Warrant (EAW), an individual may be surrendered to another EU members state. Surrender by means of execution of an EAW issued by a national judicial authority is possible if certain requirements are met, including that the person whose return is sought is accused of an offence for which the maximum sentence is at least one year of imprisonment or if they have been sentenced to a term of at least four months of imprisonment (Section 2, Surrender of Persons Act). 

Non-EU Context

Mutual legal assistance, including extradition of nationals between the Netherlands and non-EU countries, is governed by the international conventions and bilateral agreements the Netherlands is party to. The extradition treaties, in conjunction with the Extradition Act, set out the conditions under which these extraditions may be executed.

The DPPS has a monopoly on prosecuting criminal offences in the Netherlands and has the discretionary power to decide whether or not to prosecute. As mentioned in 2.1 Enforcement Authorities, the National Office for Serious Fraud, Environmental Crime and Asset Confiscation of the DPPS is responsible for the prosecution of (more complex) white-collar offences.

The DPPS has drafted guidelines in relation to the investigation and prosecution of several offences.

If the DPPS decides to not (further) investigate and/or prosecute a potential criminal offence or person(s), an interested party such as the victim, may file a request at the Court of Appeals to order the DPPS to (further) investigate and/or prosecute. 

As mentioned in 2.1 Enforcement Authorities, the DPPS may decide whether or not to prosecute crimes. If the public prosecutor decides to not bring the case to trial, they may decide to issue a (conditional) dismissal of the case, enter into an out-of-court settlement with the defendant or issue a penalty order.

Out-of-Court Settlements

The public prosecutor and a defendant may agree upon an out-of-court settlement, which usually includes that the defendant pays a fine, disgorgement and/or damages and/or meets (other) requirements of the prosecution in order to prevent an indictment, for example taking (enhanced) compliance measures.

As mentioned in 1.6 Recent Case Law and Latest Developments, the Instruction on Large Out-of-Court Settlements provides guidelines for the DPPS in relation to out-of-court settlements with a fine-component of over EUR200,000 and out-of-court settlements with a total transaction value of EUR1 million and more. Since September 2020, large out-of-court settlements must be assessed by an independent review committee, which advises the Council of Attorneys General regarding the transactions. Large out-of-court settlements will be accompanied by a press release, in which the DPPS publicly accounts for the settlement. The press release and the settlement agreement include:

  • the transaction amount;
  • an account of the facts, which are acknowledged by the defendant, but which do not constitute an acknowledgment of guilt; and
  • (other) considerations that led to the settlement.

If the legislative proposal regarding the judicial test (see 1.6 Recent Case Law and Latest Developments) will be adopted, the assessment of large out-of-court settlements by the independent review committee will be replaced by a judicial test.

Punishment Orders

The DPPS can issue a punishment order, which does not require the acceptance of the offender. The offender can object to the order and file an appeal to the court. Punishment orders are generally issued in relation to the more common criminal offences and not often in relation to white-collar offences.

Dutch criminal law does not provide for plea bargaining. 

However, in practice, it is possible to enter into negotiations with the DPSS, for example to try to achieve an out-of-court settlement (see 2.7 Deferred Prosecution) or in order to reduce the charges in exchange for co-operation or a confession. For example, in a recent case (2019), the DPPS and the defendants entered into an agreement based on which the DPPS would "merely" charge the defendants with culpable money laundering instead of habitual money laundering and participation in a criminal organisation, which limits the maximum sentence that could be imposed by the court, in exchange for "full disclosure" from the defendants. The DPPS demanded a partially conditional prison sentence of two years. The court strongly disapproved of the agreement, since habitual money laundering could have been proven and the demands of the DPPS were far too low taking into account the severity of the offences and the consequences of the acts of the defendants for society. 

Scamming

According to Section 326 of the DCC it is prohibited, with the intention of benefitting oneself or another unlawfully, to induce a person to:

  • hand over any property;
  • render a service;
  • make available data;
  • incur a debt (according to case law: to enter into an agreement); or
  • relinquish a claim.

Section 326 restricts the liability for acts under this section to those that can be qualified as having used a false name or a false capacity, usage of devious tricks or a tissue of lies. Scamming requires criminal intent, conditional intent (dolus eventualis) being sufficient, and is punishable with imprisonment for up to four years or a fine of up to EUR87,000 (category 5).

With regard to legal entities, a fine up to the next highest fine category may be imposed. Moreover, if the highest category of fines is not considered a suitable sanction, a fine up to 10% of the annual revenue of the legal entity may be imposed. This applies to all criminal offences described in this article.

Forgery

Sections 225-234 of the DCC govern a range of crimes constituting or relating to forgery. According to Section 225 of the DCC it is prohibited to draft false documents, falsify documents or to have used false/falsified documents, while having the intention to use that document as if it were genuine and unfalsified (with regard to this element conditional intent does not suffice). Maximum sentence: imprisonment up to six years or a fine of EUR87,000 (category 5).

Embezzlement

According to Section 321 of the DCC it is prohibited to intentionally and unlawfully misappropriate any property which belongs to another person and which is in possession of the offender other than as a result of a crime.

Maximum sentence: imprisonment of up to three years or a fine of EUR87,000 (category 5). A prison sentence of four years may be imposed if the offender possesses the property by means of their employment or profession (Section 322, DCC).

Under Dutch criminal law, the following types of bribery are distinguished:

  • active (Section 177, DCC) and passive bribery (Section 363, DCC) of public officials, including judges (Sections 178 and 364, DCC);
  • bribery of foreign officials (Section 178a, DCC); and
  • active and passive private commercial bribery (Section 328ter, DCC)

Bribing a public official with the aim of inducing them to perform a prohibited or unlawful act, or of inducing them to perform a permitted or lawful act, are punishable offences. The decisive factor in determining whether a recipient will be punishable is whether they knew or should reasonably have suspected that they were being offered a gift or promise of service in order to induce them to act or refrain from acting in a given manner, regardless of whether or not they acted in breach of their duty.

Bribes

A bribe is defined as a gift or promise of service, describing the advantage that is offered by the briber. This can involve both material and immaterial advantages. As the law does not provide definitions of culpable and non-culpable gifts, small representational gifts may fall within the scope of the provisions on bribery.

Public Official

Under Dutch law there is no overall definition of a public official. Section 84 of the DCC states that public officials include members of the general representative bodies, judges and those who belong to the armed services. However, it follows from case law that the scope of the definition of a public official is wider. The Supreme Court has defined a public official as "a person who, under the supervision and responsibility of the government, has been appointed to a function which undeniably has a public dimension to carry out some of the powers of the Kingdom or its agencies".

Execution of their duties

To be held criminally liable for bribery, the relevant act or omission must relate to the execution of the duties of the public official. The same goes for past and future duties. It follows from case law that the official’s authority to perform or omit the act is irrelevant.

Foreign Officials

Pursuant to Section 178a of the DCC, foreign officials are treated equally to domestic officials and the same offences and penalties apply to foreign officials.

Private Commercial Bribery

Passive private commercial bribery is punishable if the employee or agent, who, in relation to an act or omission in breach of their duties, accepts or asks for a gift or promise of service. (Section 328ter sub 1, DCC)

Active private commercial bribery is punishable if the person making the gift or promise, or providing or offering a service, knows or can reasonably assume that the employee or agent, by receiving the gift or promise or service, acts in breach of their duty. (Section 328ter sub 2, DCC)

Maximum Sentences

Active or passive bribery of public officials: imprisonment for up to six years or a fine of EUR87,000 (category 5).

Active and passive bribery of judges: imprisonment for up to nine years or a fine of EUR87,000 (category 5).

Active and passive private commercial bribery: imprisonment for up to four years or a fine EUR87,000 (category 5).

Dutch law does not provide for any specific obligations to prevent bribery. There is no obligation to maintain a compliance programme aimed at the prevention of bribery.

However, whether a company has lived up to its duty of care, including having a compliance programme in place, will be taken into account when determining whether a company is criminally liable (see also 1.4 Corporate Liability and Personal Liability and 2.4 Internal Investigations). 

With regard to insider dealing and market manipulation, Regulation (EU) 596/2014 (MAR) has direct effect in the Netherlands.

Insider Dealing

According to Sections 8 and 14 of the MAR it is prohibited to engage or attempt to engage in insider dealing, to recommend another person to engage in insider dealing or to induce another person to engage in insider dealing, or to unlawfully disclose inside information. 

Market Manipulation

According to Section 15 of the MAR it is prohibited to engage in or attempt to engage in market manipulation. Market manipulation is defined as entering into a transaction that gives false or misleading signals as to the supply of, demand for or price of a financial instrument, or secures the price of one or several financial instrument at an abnormal of artificial level (Section 12, MAR). It is also prohibited to manipulate the calculation of a benchmark by transmitting false or misleading information of inputs.

Penalties

If these provisions are violated, the MAR obliges EU member states to ensure that the competent authorities have the power to impose several sanctions. Administrative penalties for individuals vary with maximum fines of between EUR500,000 and EUR5 million. Criminal penalties include a prison term of up to six years. For legal entities, administrative penalties vary between maximum fines of EUR2.5 million–15 million, or 15% of the worldwide annual turnover.

Price Manipulation

According to Section 334 of the DCC, it is prohibited to drive up or down the price of commodities, stocks or other securities by disseminating false information with the intention of unlawfully benefitting oneself or another. The maximum sentence for such price manipulation is imprisonment for two years or a fine of EUR87,000 (category 5). 

Sections 68, 69 and 69a of the Dutch General Tax Code (DGTC) set out the minor offences and crimes related to tax fraud.

Minor Offences – Sections 68, 70 and 71 of the DGTC

The minor offences described in Section 68 of the DGTC relate to non-compliance with the obligations included in Chapter VIII, paragraph 2 of the DGTC, such as providing information to the Tax Authorities, allowing the inspection of books and documents as well as record-keeping. It is an offence to keep records that do not meet the requirements of tax law. Proof of intent is not necessary.

Maximum sentences for violations of Section 68 of the DGT vary from imprisonment for up to six months or fines of EUR4,350–8,700 (categories 2–3).

Sections 70 and 71 of the DGTC prohibit violations of lower/delegated tax legislation.

Crimes – Section 69/69a of the DGTC

Section 69 and 69a of the DGTC include tax crimes. Section 69 (1) penalises intentionally omitting to file a tax return, filing a tax return too late or intentionally committing the acts mentioned in Section 68 (1 sub a, b, d, e, f or g) of the DGTC, provided those acts may lead to the underpayment of taxes. The maximum sentence is imprisonment up to four years, a fine of EUR21,750 (category 4) or the amount of under-levied tax if that amount exceeds the maximum fine.

Section 69 (2) of the DGTC penalises filing an incorrect or incomplete tax return and the acts mentioned in Section 68 (1)(c) of the DGTC, intentionally, provided that the acts may lead to the underpayment of taxes. The maximum sentence is imprisonment for up to six years, a fine of EUR87,000 (category 5) or the amount of under-levied tax if that amount exceeds the maximum fine. If the acts relate to a certain taxable income, a maximum fine of three times the amount of the under-levied tax may be imposed.

If the acts of Section 69(1) and 69(2) of the DGT are committed in the context of a person’s profession, they may be dismissed from that profession as an additional sentence (Section 69(6), DGTC).

Section 69(3) of the DGTC contains an exception to the right to prosecute the acts as described in Sections 69(1) and 69(2) of the DGTC if a person files a correct and full tax return or provides correct and full information, before they know, or could have reasonably suspected, that the authorities have, or will gain, knowledge regarding the (potential) violation. The exception does not apply to the acts related to certain taxable income.

If an act constitutes both a crime pursuant to Sections 69(1) or 69(2) of the DGTC and forgery pursuant to Section 225(2) of the DCC (see 3.1 Criminal Company Law and Corporate Fraud), the prosecution on the basis of forgery is excluded.

Pursuant to Section 69(4) of the DGTC, if the act falls both under Sections 69(1)/69(2) of the DGT and Section 225(2) of the DCC, the prosecution based on Section 225(2) of the DCC is excluded.

Section 69a (1) of the DGTC penalises not paying due taxes (on time). The maximum sentence is imprisonment for up to six years, a fine of EUR87,000 (category 5) or the amount of underpaid tax if that amount exceeds the maximum fine.

Section 3:15i of the Dutch Civil Code sets out the general duty of keeping books and accounting records for anyone who carries on a business or exercises a profession in the Netherlands. 

A legal entity must publish its annual accounts and other relevant documents (Section 2:394, Dutch Civil Code). Intentionally publishing false/falsified annual accounts, as if they were genuine and unfalsified, while knowing or having reasonable cause to suspect that these documents are destined for such use, constitutes forgery (Section 225(2), DCC; see also 3.1 Criminal Company Law and Corporate Fraud). The maximum sentence for such conduct is imprisonment for up to six years and a fine of EUR87,000 (category 5).

In the Netherlands, competition law is mainly enforced administratively, by the Authority for Consumers and Markets (ACM).

The Dutch Competition Act prohibits, amongst other things, agreements between undertakings, decisions by associations of undertakings and concerted practices with the aim or effect of significantly preventing, restricting or distorting competition in the Dutch market.

In the case of a violation of the Dutch Competition Act, the ACM is entitled to impose a fine or an order for incremental penalty payments. The administrative fine may amount to up to EUR900,000. If the annual revenue of the company in question exceeds that amount, the ACM may impose a fine up to 10% of the annual revenue of the company. In the case of prolonged cartels, the fines may reach up to 40% of the annual revenue of a company.

Section 328bis of the DCC of the criminalises unfair competition in the case of a person who – with the intention of establishing, preserving or increasing their or another person's market position – perpetrates any form of deception in order to mislead the general public or a specific person, if such activity leads to any disadvantage to their competitors or those of the other person. The maximum sentence is imprisonment for up to one year or a fine of EUR87,000 (category 5).

The Netherlands does not have specific consumer protection criminal law.

Cybercrime

Section 138ab(1) of the DCC prohibits the intentional and unlawful entry of (a part of a) computerised device or system. The unlawful entry can be gained by:

  • breaching a security measure;
  • a technical intervention;
  • means of false signals or a false key; or
  • assuming a false identity.

The maximum sentence is imprisonment for up to two years or a fine of EUR21,750 (category 4).

If the offender subsequently copies data gained by means of the computerised device or system they unlawfully accessed, and copies, intercepts or records such data for their own use or that of another, this is considered an aggravating circumstance. In that case, a prison sentence up to four years of a fine up to EUR21,750 (category 4) may be imposed (Section 138ab(2), DCC).

A person who intentionally and unlawfully hinders the access or use of a computerised device or system by offering or sending data may be punished with a prison sentence of up to two years or a fine of EUR21,750 (category 4) (Section 138b, DCC).

It is prohibited to intentionally (Section 161sexies, DCC) and negligently (Section 161septies, DCC) destroy, damage or render unusable any computerised device or system infrastructure facility or any telecommunication infrastructure facility, causing the defective functioning of that facility or frustrating a safety measure of that facility. Maximum sentences vary from imprisonment for up to six months (negligent form) to 15 years (aggravated intentional form) and fines of EUR21,750–87,000 (categories 4–5).

It is prohibited to intentionally and unlawfully (Section 350a, DCC) or negligently (Section 350b, DCC) alter, erase, render unusable or disable data stored, processed or transferred by means of a computerised device or system or telecommunication, or to add data thereto. Maximum sentences vary from imprisonment for up to one month (negligent form) to four years (aggravated intentional form) and fines of EUR4,350–87,000 (categories 2–5).

Company Secrets

Section 273(1) of the DCC prohibits the intentional disclosure of specific information, which a person was obliged to keep secret, related to a commercial, industrial or service enterprise where they have been employed.

Section 273(2) of the DCC prohibits the intentional disclosure or, in pursuit of profit, use of non-publicly available data that has been obtained by means of a crime from a computerised device or system of an enterprise, and that is related to that enterprise, where any disadvantage may follow from the disclosure.

The maximum sentence for such conduct is imprisonment for up to six months or a fine of EUR21,750 (category 4).

A person cannot be held criminally liable for violation of Section 273 of the DCC if they could have believed, in good faith, that disclosure was in the public interest.

A person may only be prosecuted for violation of Section 273 of the DCC on the complaint of the management board of the company in question.

The EU Sanctions Regulations, including the UN sanctions that were implemented by the EU, have direct effect in the Netherlands.

The Sanctions Act 1977 and corresponding Sanctions Regulations provide the legal basis for the implementation and enforcement of EU (and UN) sanctions. The Netherlands also operates a National Terrorism Sanctions List of designated parties whose assets will/can be frozen.

Violations of international sanctions constitute economic offences punishable under the EOA. The maximum sentences vary from imprisonment for up to one year (negligent form) to six years (intentional form) and fines of EUR87,000 (individuals) and up to 10% of the annual turnover (legal entities). 

It is punishable to obtain, possess or transfer, in pursuit of profit, a property, while knowing that that property was derived from a crime (Section 416, DCC). The maximum sentence is imprisonment for up to four years or a fine of EUR87,000 (category 5).

It is also punishable if a person obtains, possesses or transfers, in pursuit of profit, a property, while they had reasonable cause to suspect that that property derived from a crime (Section 417bis, DCC). The maximum sentence is imprisonment for up to one year or a fine of EUR87,000 (category 5).

Only crimes, not minor offences, can constitute predicate offences for concealment.

(Co-)perpetration

A person shall be held criminally liable for a criminal offence as a perpetrator if they:

  • commit the offence, either personally or jointly, or cause another person to commit the offence; and
  • by means of gifts, promises, abuse of authority, use of force, threats, or deception intentionally solicit the commission of the criminal offence (Section 47, DCC).

Aiding and Abetting

A person who intentionally aids and abets the commission of a crime or provides opportunity, means or information for the commission of a crime may be held liable as an accomplice (Section 48, DCC). In cases of complicity, the maximum of the penalties prescribed for the crime in question shall be reduced by one third.

Participation in a Criminal Organisation

Participation in an organisation that has the aim of committing crimes, is punishable by a term of imprisonment for up to six years or a fine of EUR87,000 (category 5). It suffices to be involved in the organisation; an actual contribution to the commission of the offences is not required (Section 140, DCC).

Forms of Money Laundering

Dutch criminal law distinguishes several types of money laundering.

Intentional money laundering

Pursuant to Section 420bis of the DCC, intentional money laundering is a crime, requiring that at the time of the offence the suspect was aware of the fact that the object they possessed, disguised or concealed had been acquired by means of a crime. Only conditional intent must be proven. The knowledge of the suspect may be inferred from objective circumstances. The maximum sentence is imprisonment for up to six years or a fine of EUR87,000 (category 5).

Habitual money laundering

Section 420ter of the DCC prohibits habitual money laundering. This requires proof of intentional money laundering committed repeatedly. The maximum sentence is imprisonment for up to eight years or a fine of EUR870,000 (category 6).

Negligent money laundering

Pursuant to Section 420quater of the DCC, negligent money laundering is a crime as well. It must be proven that the suspect could have had reasonable suspicions of the object concerned having been acquired by means of a crime. The maximum sentence is imprisonment for up to four years or a fine of EUR87,000 (category 5).

Self-laundering

As of January 2017, provisions regarding self-laundering were enacted under Section 420bis.1 of the DCC (intentional form) and Section 420quater.1 of the DCC (negligent form). To be held liable, the prosecution must prove that the suspect obtained or possessed an object resulting from their own crime. Actions to conceal the criminal nature of the object are not required. The maximum sentence for such conduct is imprisonment for up to six months (intentional form) or four months (negligent form) or a fine of EUR21,750 (category 4).

Predicate Offences

Crimes (but not minor offences) where an object was acquired could constitute a predicate offence for money laundering.

Prevention of Money Laundering

The Money Laundering and Terrorist Financing (Prevention) Act (MLTFA) provides obligations to prevent money laundering. The MLTFA includes provisions regarding:

  • taking measures to identify and assess risks of money laundering;
  • conducting customer due diligence;
  • reporting unusual transactions; and
  • providing training to employees.

The persons/entities subject to the MLTFA include banks, other financial institutions, accountants, notaries, lawyers, tax advisors, trust offices, etc.

Administrative penalties can be imposed as a result of failure to comply with the MLTFA and the maximum fines vary from EUR10,000 to EUR4 million, and, for certain financial institutions, up to EUR5 million or 20% of annual turnover. In cases of recidivism within five years, the fine could be doubled. 

Criminal penalties for violations of the MLTFA can be imposed as well. The maximum sentences vary from imprisonment for six months to four years and fines ranging from EUR21,750–87,000 (categories 4–5) for individuals. For legal entities, the maximum fines vary from EUR87,000 to 10% of annual turnover.

Which enforcement authority is competent depends on the type of entity to which the MLTFA applies and includes the Dutch Central Bank, the Authority for the Financial Markets and the Financial Supervision Office. The Financial Intelligence Unit is the authority to which institutions must report unusual transactions.

For legal entities that are facing prosecution, or are being prosecuted, for a white-collar offence, a common defence is that the acts or omissions of individuals cannot be attributed to the legal entity and that the entity did not have the required mental state (mens rea). In principle, a company could escape criminal liability if it has established effective internal controls, ethical guidelines and compliance rules, and if it has done everything in its power to prevent the act.

The existence of adequate supervision and control measures is often important to determine whether the offence was part of the normal business activities of the legal entity and whether the corporation “accepted” the commission of the offence (see also 1.4 Corporate Liability and Personal Liability). However, in many cases, measures taken by companies have been found to be inadequate to escape criminal liability entirely and it is more likely that these measures will be taken into account as mitigating factors in relation to the sentence (demand).

The Netherlands does not have any de minimis exceptions for white-collar offences, nor any exempted industries/sectors. 

Dutch criminal law does not provide specific rules allowing authorities to provide leniency to self-reporting offenders. Nevertheless, the enforcement authorities and courts may take self-reporting, co-operation with the authorities, adequate measures to prevent wrongdoing and disciplinary sanctions into account (as mitigating factors) in their decisions over whether and how to prosecute and penalise the (potential) offenders (see also 4.1 Defences).

In April 2021, the DPPS reached a settlement with five subsidiaries of SHV Holdings N.V. (SHV subsidiaries), where the SHV subsidiaries paid over EUR41 million to the DPPS with regard to, amongst other things, bribery of foreign public officials and commercial bribery. This was the first such settlement since the DPPS became more transparent about the benefits of self-reporting and co-operation with the authorities – all SHV subsidiaries received a 25% discount on the fine for co-operating in the investigation and three SHV subsidiaries received a further 25% discount on the fine because of the self-reporting. 

In 2016, the House for Whistle-Blowers Act came into force in the Netherlands. The House for Whistle-Blowers Act establishes an independent administrative body (the House) and requires companies with a minimum of 50 employees to adopt a procedure with certain safeguards for dealing with whistle-blowers. Before voicing their suspicion of misconduct within the company, whistle-blowers can contact the House for advice on how to handle their concerns.

In June 2021, a legislative proposal was submitted to amend the House for Whistle-Blowers Act in order to implement EU Directive 2019/1937. According to the proposal, the protection provided by the Act will be extended to a broader circle of natural persons. Moreover, several authorities will be designated in relation to establishing external reporting channels so that whistle-blowers no longer necessarily have to use their organisation’s  internal channels first. Furthermore, in order to protect whistle-blowers against retaliation such as dismissal or suspension, support measures will be included in the Act.

Pursuant to Article 6(2) of the European Convention on Human Rights, the presumption of innocence is applicable in the Netherlands; a defendant is considered innocent until proven guilty.

In the Netherlands, the court may find that the defendant committed the offence as charged in the indictment only when the court, through the hearing, has become convinced thereof from legal means of evidence (Section 338(1), DCCP). Dutch courts are not obliged to declare the charges proven if a minimum standard of evidence is met; the courts must be convinced that the defendant committed the offence based on the legal evidence. It is the public prosecutor who must present conclusive evidence to convince the court that the defendant committed the offence with which they are charged.

If the evidence against the accused "calls for an explanation", which the accused ought to be able to give, and the accused does not provide an explanation, the court may infer the guilt of the accused thereof (Murray v UK, ECHR). Under these circumstances, the accused may de facto be responsible for providing proof of their innocence. 

If a defendant puts forward an affirmative defence, the defence must be explicitly mentioned, substantiated and sufficiently plausible in order for the court to be obliged to respond to it in its judgment. 

If the public prosecutor considers the defendant guilty of the offence and punishable, they will put forward a proposal for an appropriate sentence (demand) during the court hearing.

After its deliberation, the court will, in the same judgment, rule on the question of whether it has been proven that the defendant committed the criminal offence, if they are punishable and, if so, what sentence will be imposed. When imposing a sentence for a criminal offence, a judge is limited by the maximum statutory sentences. Within those limits a judge has the discretion to impose the sentence which they deem suitable, taking into account the severity of the facts, personal circumstances of the defendant, recidivism and the duration of the criminal investigation/proceedings.

The Netherlands has so-called LOVS-guidelines, which provide the courts with a non-binding, orientation guide for sentencing. The fraud section includes crimes such as bribery, forgery, embezzlement and money laundering, and contains orientation points for sentencing based on the financial disadvantage suffered as a consequence of the crimes. The guidelines also list several mitigating and aggravating factors that can be taken into account in the sentencing process, such as:

  • the duration of the criminal offence;
  • the proceeds of the crime;
  • whether the defendant ended the criminal act themselves; and
  • co-operation with the authorities.
Lumen Lawyers

Apollolaan 151
1077 AR Amsterdam
Netherlands

+31 85 017 07 00

+31 85 017 07 99

info@lumenlawyers.com www.lumenlawyers.com
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Lumen Lawyers is a progressive niche firm that specialises in corporate criminal law and internal investigations. Lumen Lawyers was established in October 2019. In 2021, it already has a strong market presence, reflected by an impressive track record of both domestic and international high-profile cases and media attention. The firm’s clients include financial institutions, corporates, executives and other individuals. Its team benefits from unique Dutch court and regulatory experience and legal experts who think outside the box, bringing invaluable insights to clients on Dutch enforcement agencies’ investigations and decision-making practices.

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