On 5 April 2016 the Senate approved two of the three legislative proposals aiming to combat bankruptcy fraud by :
- introducing director disqualification under civil law (‘Wet civielrechtelijk bestuursverbod’, Kamerstukken II 2013/14, 34 011 )
- revising the criminalization of bankruptcy fraud (‘Wet herziening strafbaarstelling faillissementsfraude’, Kamerstukken II 2013/14, 33 994
These proposals are part of the legislative programme entitled ‘Reassessment of bankruptcy law’ (‘Herijking faillissementsrecht’) and are expected to enter into force on 1 July 2016.
With the introduction of the bill on director disqualification under civil law, it becomes possible to disqualify directors for up to five years for committing bankruptcy fraud or misconduct before the commencement of the bankruptcy. Disqualified directors are not allowed to act in their capacity as a director during the disqualification period and are also not allowed to join another organization as a director or supervisory director. With this measure the government aims to combat bankruptcy fraud and irregularities surrounding bankruptcy and prevent fraudulent directors from continuing their activities. A director disqualification is imposed by the civil court at the request of either the Public Ministry or the trustee under the bankruptcy of a legal entity of which the person in question was the director.
The second bill on the revision of the criminalization of bankruptcy fraud seeks to introduce more criminal law options to tackle bankruptcy fraud. To further increase the effectiveness of the fight against bankruptcy, existing criminal bankruptcy provisions will be modernized and legal instruments expanded so that, for example, breaching the obligation to keep records or authorizing excessive spending prior to bankruptcy resulting in a disadvantage for creditors will become criminal offences.
The third bill intended to combat bankruptcy fraud is currently pending in the House and aims to strengthen the position of the trustee in bankruptcy (‘Wet versterking positie curator’, Kamerstukken II 2014/15, 34 253) by a variety of measures including the expansion of information and cooperation obligations. As a result of this bill, a trustee in bankruptcy will have more options to detect and tackle irregularities surrounding bankruptcy.
The ‘Reassessment of bankruptcy law’ programme includes a total of seven legislative proposals, which are intended to strengthen the reorganizing ability of companies and modernize bankruptcy law and combat bankruptcy fraud at the same time.