The fight against corruption is increasingly gaining momentum in the Netherlands, particularly in light of the decision of the Netherlands Central Bank (DNB) to make corruption a cross-sectoral regulatory theme for 2013. The DNB is to carry out an investigation into the nature, scope and causes of corruption and to try to find an effective check on the risk of corruption for banks, insurers and pension funds. Furthermore, the DNB will examine the UK regulatory experience under the UK Bribery Act. It is already generally known from the UK act, as well as the US Foreign Corrupt Practices Act, that a broad jurisdiction can be based on both pieces of legislation.
Further, in December 2012 an Organisation for Economic Cooperation and Development (OECD) evaluation report on the implementation and execution by the Netherlands of the OECD corruption treaty was published. The report concluded that the corruption of public officials abroad is insufficiently investigated and prosecuted. This conclusion fits in with the public opinion that Dutch jurisdiction is insufficient.
This update examines the jurisdiction of the Netherlands over international corruption.
Articles 177, 177a, 328ter, 362 and 363 of the Dutch Penal Code are the key anti-corruption provisions. A common example of corruption is a case in which a person in a public position (eg, a foreign public official) is paid to do something that he or she can do because of his or her function (eg, signing a contract). However, corruption also extends beyond this example. For example, the intended action performed by the bribed person does not necessarily have to be carried out. Nor is an actual payment necessary; a service or a promise can suffice. Further, a public position is not required – corruption can also take place privately, although the OECD treaty deals with the bribery of foreign public officials only.
These cases of corruption can easily be placed within an international, cross-border context. For example, the employee of a Dutch company could privately pay a foreign mayor to issue a public licence. In order to decide whether criminal prosecution in the Netherlands is an option in cross-border cases, the Dutch jurisdiction provisions must be consulted.
The relevant jurisdiction provisions within the context of corruption are Articles 2, 4, 5 and 6 of the Penal Code.
In general, Dutch jurisdiction requires at least double criminality with regard to acts of bribery outside the Netherlands. This means that the act of bribery must also be punishable in the other country. In this regard, it is decisive whether criminalisation in the other country protects a similar interest. For example, the local penal code need not contain a specific regulation with regard to the criminal liability of legal entities. Double criminality is required at the time that the crime is committed. The double criminality requirement is no major obstacle for the Dutch Public Prosecutor's Office: virtually all countries are members of treaties requiring the criminalisation of public and private bribery, so a relevant form of corruption is usually criminalised in most other countries.
Dutch nationality of public official
Depending on the crime, Dutch jurisdiction further requires, with regard to acts of bribery committed outside the Dutch territory, that the perpetrator be a Dutch citizen or legal entity (Article 5(1)(2) of the Penal Code), or that the crime have been committed against a Dutch public official (who need not have Dutch nationality) or a Dutch citizen who is a public official in a foreign state (Article 4(9) of the code). When a public official is bribed in a foreign country by a Dutch public official or a person in the public service of an international governmental organisation established in the Netherlands (eg, an international tribunal), the Netherlands also has jurisdiction (Article 4(10) of the code).
For this reason, it is conceivable that in the Netherlands, a Dutch employee of a US oil company who takes a bribe in his office in Africa and conceals this fact from his employer (Article 5(1)(2) in conjunction with Article 328ter of the Penal Code) can be prosecuted in the Netherlands. It is also possible that the prosecution of a foreign company could succeed when a foreign employee of that company bribes a public official of a Dutch embassy in Asia (Article 4(9) in conjunction with Article 177 of the code).
A number of exceptions do not require double criminality in order to fall within Dutch criminal jurisdiction. Double criminality is not required with regard to bribery by a Dutch citizen or legal entity to the extent that the bribery is directed towards the International Criminal Court (Article 5(1)(1) of the code), or in the two situations mentioned in Article 6 of the code – namely where:
- a Dutch public official (with or without Dutch nationality) commits a serious offence involving abuse of public office outside the Netherlands; or
- a person employed by an international governmental organisation accepts a bribe outside the Netherlands.
Broad legal territory of the Netherlands
The Dutch criminal statutes - including the bribery provisions – are applicable to any person, whether Dutch or foreign, that commits a criminal offence in the Netherlands (Article 2 of the code). Pursuant to the flag principle, the Dutch territory also includes Dutch aircraft and ships (Article 3 of the code).
The practical scope of this principle of territoriality depends on the answer to the question of whether an act has taken place within the Netherlands. An act takes place in the Netherlands when:
- the required elements of the criminal acts concerned take place in the Netherlands (the doctrine of the physical action);
- while committing the crime, an 'instrument' is used (eg, an email) that has effect in the Netherlands. For example, a letter to a person in the Netherlands sent by email from abroad, containing a promise, has effect in the Netherlands and thus could be reasoned to be committed in the Dutch territory in accordance with the doctrine of the instrument; or
- the constitutive consequence of the crime arrived in the Netherlands. The Netherlands then has jurisdiction when the action of the bribed person, as intended by the offender, is felt in the Netherlands. The question is whether it can be argued that this is also the case when a contract is signed as a result of bribery; this would extend Dutch jurisdiction.
The doctrine of the physical action is particularly appropriate for crimes in which the offence description has been fulfilled through a single element, as is the case with bribery provisions. The doctrine of the instrument is useful when an instrument is used to carry out the act. Depending on the specific act, the judge can seek to apply one of these doctrines.
With regard to cross-border crimes in which acts take place partly in the Netherlands and partly in another country, the Supreme Court has held as follows:
"5.5 Pursuant to article 2 Netherlands Penal Code, the Netherlands criminal statutes apply to any person committing a criminal act in the Netherlands. When besides places in, also places outside the Netherlands can be considered as places where a criminal act has been committed, prosecution of that criminal act in the Netherlands is, on the basis of the aforementioned statutory provision, possible, also with regard to acts that are part of that criminal act that have been committed outside the Netherlands."(1)
When a gift is made abroad but the intended action or inaction of the bribed person takes place in the Netherlands, there is Dutch jurisdiction (this also applies to the person offering the bribe). When a Belgian public official is given an expensive painting in Belgium by two German businesspeople to conclude a contract with the Germans on behalf of a Belgian government institution, and the contract is signed in the Netherlands (the action of the Belgian public official), the Netherlands has jurisdiction.
When a promise is made on a phone call from abroad, with the person being bribed answering the call in the Netherlands and the intended action or inaction taking place abroad, jurisdiction also exists with regard to both the person who bribes and the person who is bribed. This is based on the fact that the effect takes place in the Netherlands. This also applies when a communication takes place by email. If a French public official is on holiday in the Netherlands and exchanges emails with an Italian businessman about a gift and the exchanged favour on his mobile phone, they could both be prosecuted in the Netherlands for active or passive bribery, even when the final 'deal' is closed in a third country at a later stage. In such case, the instrument – the email exchange – would have its effect in the Netherlands. Questions arise regarding, for instance, the moment of reading or taking note of an email. It is conceivable that the French public official, staying in the Netherlands for a short time and opening the Italian businessman's email only once back in France, would not fall within Dutch jurisdiction. If the foreign official in this example had read his email in the Netherlands, it is conceivable that the Netherlands would have jurisdiction in respect of both the Italian businessman and the French official.
An increasingly common question is the extent to which, in the case of active bribery – where making the promise of a gift is sufficient and the actual giving of the gift is not required for a conviction in the Netherlands – it could be argued that when the actual (not constitutive) gift is the only connection with the Netherlands (eg, the Netherlands is the destination of a promised trip), the Netherlands has jurisdiction in light of the Supreme Court's findings as cited above. In such case, the person actively giving the bribes would not commit a criminal act in the Netherlands, so no place where the act was committed could be determined as required by the Supreme Court. At the same time, case law exists with regard to the person who passively bribes, in which the places visited during the given trip are indicated as locus delicti (the law of the place where the offence was committed).(2) In that case it is assumed that the public official accepted the bribe during the entire trip. This means that a foreign public official who accepts in his or her home country a trip to the Netherlands is continually receiving the actual bribe during the trip to the Netherlands.
Forms of participation in criminal act and legal entities
Because forms of participation in a crime are in themselves substantive crimes, forms of complicity in principle have their own locus delicti, irrespective of where the underlying predicate offence takes place. To ensure that complicity to an economic offence is punishable in cases where acts of complicity have been committed outside the Netherlands, Article 3 of the Economic Offences Act stipulates that committing an act of complicity abroad is punishable under Dutch law. Furthermore, the Dutch judicial system has accepted that the place where the predicate offence occurs can also be accepted as locus delicti for any form of participation. Forms of participation in criminal acts can also be linked to the place of participation. When participation in a criminal organisation abroad is aimed at securing the intentions of the organisation in the Netherlands, the Netherlands can be regarded as locus delicti of the acts of participation.
As regards legal entities, the place of the predicate offence is considered to be the primary locus delicti. The time and place associated with the natural person who acts on behalf of or under the auspices of a legal entity are imputed to that legal entity.
Article 4a of the Penal Code specifies several cases of secondary jurisdiction. By applying this provision, the Dutch criminal statutes (and thus the crimes of bribery) become applicable to everyone in the relevant case. This concerns situations where:
- the Netherlands has taken over the prosecution from another state in accordance with a treaty (Article 4a(1));
- an extradition or surrender request regarding a crime of terror has not been granted (Article 4a(2));
- the Netherlands has taken over the prosecution at the request of the public prosecutor of Bonaire, Saint Eustatius and Saba (Article 4a(3)); or
- the prosecution is taken over at the request of an international tribunal (Article 4a(4)).
In such cases, the other state, tribunal or Dutch public entity transfers its original jurisdiction to the Netherlands.
No other requirements apply to this transfer. For example, the public entities mentioned above can submit a request for the case to be taken over based merely on the fact that the suspect is living or residing in the Netherlands, but also because it is complex and extensive.
In comparison with the UK Bribery Act and the US Foreign Corrupt Practices Act, foreign natural persons and entities need not worry about Dutch jurisdiction when a foreign official is bribed by the foreign legal entity, unless there is a link with the Dutch territory. The Netherlands does not have a far-reaching arrangement resembling the 'failure to prevent bribery' provision of Article 7 of the UK Bribery Act. Nevertheless, the scope of the Dutch anti-corruption territory should not be underestimated.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.