On 23 June 2009, the “fourth tranche” of the General Administrative Law Act (Algemene wet bestuursrecht) was adopted by the Dutch Parliament. This new law entered into force on 1 July 2009 and allows for enforcement action against individual members of various levels of management. As a result administrative measures, in particular administrative fines, can be imposed on both legal and natural persons. Also, various criminal terms are being introduced such as “factual leadership” (feitelijk leidinggeven) and “joint perpetration” (medeplegen). The introduction of a legal basis for individual liability of board members and supervisory directors is a significant change in administrative law.
In addition, an amendment of the financial penalty regime (Boetewet) will be adopted on 7 July 2009. The new regime inter alia provides for the possibility to impose higher and more flexible administrative fines by the Dutch financial regulators. Currently, a maximum fine of EUR 900,000 can be imposed, which in practice is limited to EUR 480,000. Not only should such an increase in fines have a deterrent effect, it should also lead to more similarity in (the level of) fines compared to surrounding European countries.
A combination of fixed and flexible fines is now proposed, consisting of three categories of offences (light, medium and grave). The maximum fine per category will be: EUR 10,000 (light), EUR 1 million (medium) and EUR 4 million (grave), with an overall maximum of EUR 4 million. The initial fine can be doubled in case of repeat offences within five years and the total amount of the fine can be increased up to twice the amount of the illegal gains (wederrechtelijk verkregen voordeel), if the benefit obtained from the offence is more than EUR 2 million.1 In contrast to fines for light offences, fines for medium and grave offences are flexible. According to the “penalty guidelines” (Boeterichtsnoeren), Dutch financial regulators can reduce or increase fines by taking into account the gravity and duration of the offence and the culpability of the offender. Together with the possibility for full mitigation, these changes allow for more proportionality with respect to financial fines.
The combination of both bills will lead to substantial changes in the Dutch financial penalty regime. It was the intention that the amendment of the financial penalty regime would enter into force subsequent to or jointly with the “fourth tranche” of the General Administrative Law Act. The adoption of the amendment is currently scheduled for 7 July 2009 and is expected to enter into force shortly after.