Anti-Corruption 2018
1. Offences
1.1 Legal Framework for Offences
Bribery is a criminal offence in the Netherlands, whereas a definition of corruption is not legally enshrined. Even though the terms bribery and corruption do not necessarily have the same definition and scope, these terms are often used interchangeably. In general, the term corruption is considered to have a broader scope than bribery. Since the term bribery is legally enshrined in Dutch law, we will use this term in this contribution.
The main legislation relating to anti-bribery and anticorruption offences is included in the Dutch Penal Code (Wetboek van Strafrecht, hereinafter: DPC), more specifically Sections 177, 178, 363 and 364 DPC regarding the offence of (active and passive) bribery of public officials (hereinafter: public bribery) and Sections 136, 328ter and 328quater DPC regarding the offence of (active and passive) bribery of non-officials (hereinafter: commercial bribery). In addition, Section 162 DPC contains an obligation for public bodies and public officials to report public offences, including bribery.
Dutch legislation is unfamiliar with a separate code relating to anti-bribery and anti-corruption that covers both offences and positive obligations on the prevention of bribery and corruption. Provisions relating to the prevention of bribery and corruption are distributed amongst several legislative acts applying to specific types of individuals and institutions. These provisions do not directly criminalise bribery and corruption (because such provisions are exclusively laid down in the DPC), but moreover relate to sound and ethical business operations and include
transparency obligations in which context, inter alia, the prevention of bribery and corruption is of relevance.
Regarding the enforcement of anti-bribery and anticorruption legislation, the Dutch Public Prosecution Service (Openbaar Ministerie, hereinafter: PPS) has discretionary powers to determine whether a corruption offence (committed in the Netherlands or abroad) will be investigated and prosecuted. For the purpose of exercising these discretionary powers, the PPS issued two instructions pertaining to the enforcement of anti-bribery legislation: (i) the `Instructions for the investigation and prosecution of bribery of public officials in the Netherlands' (Aanwijzing opsporing en vervolging ambtelijke corruptie in Nederland; 2011A014); and (ii) the `Instructions for the investigation and prosecution of bribery abroad' (Aanwijzing opsporing en vervolging buitenlandse corruptive; 2012A020). The latter relates to the bribery of foreign officials (by companies or individuals) as addressed in the OECD Anti-Bribery Convention. Both instructions contain reference points which are considered by the PPS when determining the discretion to be used when investigating and prosecuting public bribery committed either in the Netherlands or abroad. These instructions are considered `law' as described in Section 79 of the Judiciary (Organisation) Act (Wet op de rechterlijke organisatie). As a result of that, the Supreme Court will reverse judgments that are in breach of these instructions.
The Netherlands is party to several European and international conventions including: (i) the EU anticorruption treaty (41997A0625(01) Official Journal C 195, 25/06/1997 P. 0002 - 0011) and the additional protocols; (ii) the Council framework decision 2003/568/JHA on
combating corruption in the private sector (32003F0568 Official Journal L 192 , 31/07/2003 P. 0054 - 0056); (iii) the OECD Anti-Bribery Convention dated 17 December 1997; (iv) the Criminal Law Convention on Corruption of the Council of Europe (ETS No. 173); and (vi) the United Nations Convention against corruption (No. 42146). Together these conventions oblige the Netherlands to criminalise both public and commercial bribery. The conventions also provide for a set of monitoring practices on the observance of the obligations under the conventions.
1.2Bribery
The DPC criminalises several forms of bribery. Sections 177 and 178 DPC criminalise active public bribery, Sections 363 and 364 DPC criminalise passive public bribery and Section 328ter DPC criminalises both active and passive commercial bribery.
Definition of a bribe
The DPC does not contain an exact definition of a bribe. Rather, its definition varies somewhat depending on whether the bribe relates to public or commercial bribery. In general, the favour to which a bribe relates can be any gift, offer or promise, regardless of its value, financial or otherwise, as long as it is of value to the recipient (hereinafter: favour). Case law shows that even the issuance of a loan could qualify as a bribe.
Public bribery
Active public bribery includes: (i) favouring a public official with a view to inducing him or her to act or to refrain from acting in the performance of his or her office (Section 177(1(1)) DPC); or (ii) favouring a public official as a result or as a consequence of certain acts or omissions he or she has undertaken or has refrained from undertaking in the performance of his or her current or former office (Section 177(1(2)) DPC). The situation under (i) is also applicable to the person who has the prospect of becoming a public official and this appointment has actually taken place. The situation under (ii) is also applicable to former public officials.
A public official can be punished for committing passive bribery: (i) if he or she requests or accepts a favour in order to be induced to act or to refrain from acting in the performance of his or her office (Section 363(1(1) and (3)) DPC); or (ii) if he or she requests or accepts a favour `as a result or as a consequence' of previous acts or omissions
committed in their current or former office (Section 363(1(2) and (4)) DPC). When accepting a favour, Section 363 DPC requires that the public official does so `knowing or reasonably suspecting' that the favour is given with a view to inducing him or her. The situation under (ii) is also applicable to former public officials.
In addition, Sections 178 and 364 DPC criminalise the active and passive bribery of a judge with a view to influencing a judgment or to reach a conviction in a criminal case.
Definition of a `public official' and a `judge'
According to Section 84 DPC, the term `public official' includes members of general representative bodies. In addition, all members of the armed forces are deemed public officials and the terms `public official' and `judge' include arbitrators. The Dutch Supreme Court applies a very broad scope and has ruled in the past that a `public official' includes any person that is appointed to a public office in order to perform a part of the powers of the state or its agencies.
In relation to the relevant bribery offences, the term `public official' includes foreign public official and the term `judge' includes judges from a foreign state or international organisations.
Commercial bribery
The offences of commercial bribery are laid down in Section 328ter DPC and concern the bribing of and by persons other than public officials. It comprises both bribery in relation to future and past acts and omissions.
Passive commercial bribery includes accepting or requesting a favour in consideration of an act or omission committed or to be committed by an employee or agent in breach of his or her duties as an employee or agent (Section 328ter(1) DPC). Acting in breach of his or her duties as an employee or agent includes, but is not limited to, concealing the favour from the employer or principal in violation of the standards of good faith (Section 328ter(3) DPC).
Active commercial bribery includes offering or providing a favour to an employee or agent in consideration of an act or omission committed or to be committed in his or her capacity as such. The favour must be offered or provided under such conditions that the person that provides the
favour knows or may reasonably assume that the recipient acts in breach of his or her duties (Section 328ter(2) DPC).
Intent and motive requirements
Most of the bribery offences contain some (explicit) form of intent or motive requirements. With regard to active public bribery as mentioned in Section 177(1(1)) DPC, the favour must be offered or provided `with a view to' (oogmerk) inducing the public official to act or to refrain from acting in the performance of his office.
Active public bribery as laid down in Section 177(1(2)) DPC does not contain additional intent or motive requirements. It is sufficient if the favour has been offered or provided `as a result or as a consequence' of certain acts or omissions performed by the public official in the performance of his or her current or former office.
With regard to passive public bribery as set out in Section 363(1(1) and (2)) DPC, the public official accepting a favour is only punishable if he or she `knows or reasonably suspects' that the favour is given with a view to inducing them to act or refrain from acting or is offered or provided as a result or as a consequence of such acts or omissions. `Knowing' presupposes intentional behaviour (opzet), though conditional intent suffices. Conditional intent can be defined as knowingly and willingly accepting the considerable chance that a certain consequence will occur. `Reasonably suspecting' refers to negligence (schuld) according to parliamentary papers. Accordingly, a public official could even be punishable if he or she carelessly rather than maliciously accepts a favour.
Sections 363(1(3) and (4)) DPC, comprising the situations in which the public official requests a favour in order to be induced to act or refrain from acting or as a consequence of such act or omission, do not explicitly contain intent requirements. According to parliamentary papers, the intent is sufficiently expressed in the word `requesting'.
Hospitality/promotional expenditures
As mentioned, a bribe can, in general, be any gift, offer or promise, regardless of its (financial) value, as long as it is of value to the recipient. Therefore, providing or accepting hospitality and promotional expenses as such may under certain circumstances, qualify as bribery.
Failure to prevent bribery
The DPC does not contain a specific corporate offence that criminalises the failure to prevent bribery, as such. However, a company can, under certain circumstances, be held criminally liable for criminal offences, such as bribery, committed by individuals. Pursuant to Section 51 DPC, criminal offences can be committed by natural persons and legal entities. According to established case law, a legal entity can be held criminally liable if (criminal) acts or omissions can, in the specific circumstances of the case, be `reasonably attributed' to the legal entity (Supreme Court 21 October 2003, ECLI:NL:HR:2003:AF7938). Attribution can be reasonable if the offence occurred in the `sphere' (scope) of the legal entity. Such could be the case if one or more of the following circumstances apply: -- it concerns an act or an omission of an individual
who works for or on behalf of the legal entity, as an employee or in another capacity; -- the act or omission fits within the regular conduct of business operations of the legal entity; -- the legal entity benefited (financially or otherwise) from the act or omission; and/or -- the legal entity was in a position to prevent or influence the act or omission, and (generally) accepted it. A legal entity is considered to have accepted a criminal act or omission if it has not exercised due care in preventing such an act or omission.
These criteria are considered to be neither cumulative nor exclusive, but serve as tools to determine whether (criminal) acts or omissions can be reasonably attributed to a legal entity.
Commercial bribery offences (both active and passive) require that the favour is given `in consideration' of an act or omission performed or to be performed by the employee or agent in their capacity as employee or agent (Section 328ter DPC). Additionally, active commercial bribery requires that the person who provides the favour reasonably assumes that the recipient acts in breach of their duties as employee or agent (Section 328ter(2) DPC).
Having implemented an effective compliance programme might, under some circumstances, mitigate the criminal liability risk of the company. Firstly, it could prevent criminal offences from occurring. Secondly, if criminal offences are committed by for instance an employee of the company, an effective compliance programme can be used, for instance, in illustrating that the offence was not at all part of the normal business activities of the company and that the company has not (generally) accepted that
the offence was committed because it has exercised due care in preventing such behaviour. As such, having implemented a compliance programme may potentially prevent the criminal acts from being attributed to the company. However, little case law has developed in this respect. According to current jurisprudence, the relevant test remains whether or not the offence can be reasonably attributed to the legal entity in the specific circumstances of a case.
1.3 Accounting Provisions
The DPC does not contain specific criminal offences relating to accounting provisions. However, the Dutch Civil Code contains several accounting provisions, though few of them refer specifically to bribery. One of the few that does is Section 2:392a Dutch Civil Code. This provision obliges large companies, entities of public interest and certain companies with securities active in the logging of primeval forests or the mining industry to prepare and make public a report or a consolidated report of payments made to government authorities. This obligation stems from EU legislation on annual accounts. Failure to comply with Section 2:392a Dutch Civil Code is an offence under Economic Offences Act (Wet op de economische delicten).
1.4 Intermediaries
When a bribe is paid through an intermediary, the intermediary can be punished inter alia for participation or complicity. For further reading on criminal liability for participation and complicity see 1.6 Scope et seq.
Conversely, the person acting through the intermediary might be punished inter alia for participation or complicity. If that person is a legal entity, it could be directly criminally liable as an offender if the acts of the intermediary can reasonably be attributed to this legal entity (see 1.2 Bribery and 1.6 Scope et seq for further reading on corporate criminal liability). Under certain circumstances, other forms of criminal liability might also apply. For instance, if the intermediary is a legal entity, the person(s) who: (i) ordered the criminal offence to be committed (opdrachtgever,hereinafter: instructor); or (ii) actually directed the unlawful act (feitelijk leidinggever;hereinafter: actual director) may be prosecuted and convicted for that criminal offence (see 1.6 Scope et seq for further reading on the criminal liability of the instructor and actual director).
1.5 Corruption
Corruption has not been established as a separate criminal offence under Dutch law, but has been criminalized as bribery; see 1.2 Bribery for an extensive explanation of bribery under Dutch law.
1.6 Scope
Limitation period
According to Dutch law, the limitation period is linked primarily to the offence's maximum prison sentence. Subsequently, different periods of limitation apply to the different bribery offences.
A limitation period of 12 years applies to the general provisions on active and passive public and commercial bribery, as far as no sentence-increasing factor applies (Sections 177; 328ter and 363 DPC).
A limitation period of 20 years applies to: (i) active and passive public bribery of a judge if no other sentenceincreasing factor applies (Section 178 DPC and Section 364 DPC); and (ii) passive public bribery of high-ranking public officials (Section 363(3) DPC).
No limitation period applies to active and passive bribery of a judge aimed at reaching a conviction in a criminal case (Section 178(2), 364(3) and 364(4) DPC).
The limitation period for bribery offences starts to run on the day following the day on which the bribery offence was committed. Acts of prosecution interrupt the limitation period, also with regard to persons other than the person being prosecuted. After interruption, a new period of limitation starts to run. However, the right to institute criminal proceedings nonetheless is precluded if a period has elapsed that is equal to two times the limitation period applicable to the relevant bribery offence.
Geographical reach
According to Section 2 DPC, the DPC applies to any person that commits an offence in the Netherlands (the so-called `principle of territoriality'). Under certain circumstances, an offence can be deemed to have been committed both in the Netherlands and abroad (this might apply, for instance, if a public official accepts a bribe in the Netherlands that was sent to him or her from another country). If such is the case, jurisdiction exists also with regard to the parts of the offence that
took place abroad (eg, Supreme Court 2 February 2010, ECLI:NL:HR:2010:BK6328).
The offender is not required to have been physically present on Dutch territory (eg, Supreme Court 4 February 1958, NJ 1958, 294).
In addition, the DPC contains various grounds for extraterritorial jurisdiction based on several principles of international law. The most important of these principles relate to the nationality or employment of the offender (the so-called `active nationality principle') and to the nationality or employment of the offended (the so-called `passive nationality principle'). Categorised along these principles, in short, the following persons can also be prosecuted in the Netherlands:
Based on the nationality or employment of the offender: -- any Dutch national (natural person or legal entity)
who commits (public or commercial) bribery abroad, provided that such an act is also punishable in that foreign country (Section 7 DPC); -- any Dutch public official who commits passive public bribery abroad (Section 8 DPC); -- any person in the service of a Dutch-based international law organisation who commits passive public bribery public abroad (Section 6 DPC in conjunction with the Extraterritorial Jurisdiction Decree [Besluit internationale verplichtingen exterritoriale rechtsmacht]); -- any Dutch public official (including those working for other countries) or any person in the service of a Dutch-based international law organisation who violates Section 177 DPC abroad, provided that such an act is also punishable in that foreign country (Section 6 DPC in conjunction with the Extraterritorial Jurisdiction Decree); -- any Dutch national (natural person or legal entity) who violates Section 177 or 178 DPC abroad, provided that the bribery is intended against the administration of justice (rechtspleging) of the International Criminal Court (Internationaal Strafhof) (Section 7 (2(b)) DPC).
Based on the nationality or employment of the person requesting or accepting the favour: -- any person who bribes a Dutch judge abroad, provided
that such an act is also punishable in that foreign country (Section 5 DPC); -- any person who violates Section 177 DPC by bribing
a public official of Dutch nationality (including those working for other countries) abroad, provided that such an act is also punishable in that foreign country (Section 6 DPC in conjunction with the Extraterritorial Jurisdiction Decree); -- any person who violates Section 177 DPC by bribing a Dutch public official (including those of foreign nationality) abroad, provided that such an act is also punishable in that foreign country (Section 6 DPC in conjunction with the Extraterritorial Jurisdiction Decree).
Based on other grounds: -- any person who commits bribery on board a Dutch
vessel or aircraft (Section 3 DPC).
Liability
Dutch law provides for several tenets for criminal liability to hold responsible those who contribute to a bribery offence. In the following, we will focus on those tenets that are most relevant to bribery offences: criminal liability of legal entities, the liability of instructors and actual directors, participation and complicity.
Criminal liability of legal entities
As mentioned in 1.2 Bribery, legal entities can in principle commit every offence, including bribery offences. According to established case law, a legal entity can be held criminally liable if (criminal) acts or omissions can, in the specific circumstances of the case, be `reasonably attributed' to the legal entity (Supreme Court 21 October 2003, ECLI:NL:HR:2003:AF7938). Attribution can be reasonable if the offence occurred in the `sphere' (scope) of the legal entity.
Furthermore intent (dolus) or negligence (culpa) of the legal entity must be proven, depending on the specific offence(s) it is being charged with.
In Dutch literature it is argued that criminal offences committed by legal entities can also be attributed to other legal entities in the same way criminal offences of individuals can be attributed to legal entities. This means, for example, that a parent company, under certain circumstances, can be held criminally liable for a bribery offence committed by a subsidiary, if such attribution is reasonable. There is, however, limited (further) case law available in this respect.
Liability as instructor and actual director
According to Dutch law, if a legal entity has committed a criminal offence such as bribery, (i) the instructor or (ii) the actual director may also be prosecuted and convicted for that criminal offence.
Criminal liability of the instructor and the actual director is accessory to the criminal liability of the legal entity. Therefore, they can only be held criminally liable for bribery if a legal entity has committed bribery. It is, however, not required that the legal entity itself be actually prosecuted or convicted.
In particular, the tenet of actually directing the unlawful act is regularly used in case law. According to case law, an individual can (as a minimum standard) be considered an actual director if: (i) that individual fails to take measures to prevent the act (or similar acts) from occurring; while (ii) being `authorised' and `reasonably obliged' to do so; and (iii) if he or she accepts the considerable chance that the unlawful act will occur (Supreme Court 26 April 2016, ECLI:NL:HR:2016:733). By doing so, he or she is considered to have intentionally facilitated the unlawful act.
Acceptance of the considerable chance that the unlawful act will occur presumes that the actual director must have had, at least in general terms, some knowledge about the fact that criminal offences were committed under their authority. Such knowledge can be derived from circumstantial facts and findings, such as knowledge of facts closely related to the indicted criminal offence or based upon the implemented policy. When such knowledge is absent, criminal liability as an actual director cannot be established.
Forms of participation
To participate in a bribery offence, either as a co-perpetrator or as an accomplice, it is not necessary to meet all the criteria of the relevant bribery offences. For instance, if two people decide to bribe a public official, but only one person happens to have delivered the bribe, then the other person might also be criminally liable as a co-perpetrator or as an accomplice.
Co-perpetration (medeplegen) applies when two or more individuals and/or legal entities jointly commit an offence. It presumes a close and intentional collaboration and requires a significant or substantial contribution of the co-perpetrator. Complicity (medeplichtigheid) might apply when the person involved played a smaller part in the scheme (Supreme Court 2 December 2014, ECLI:NL:HR:2014:3474). It requires that an individual or legal entity facilitates or provides assistance before or during the commission of an offence, which is actually committed by another individual or legal entity.
The co-perpetration/complicity must have been committed intentionally to be punishable, although `conditional' intent suffices.
2. Defences & Exceptions
2.1 Defences
Regarding the bribery of public officials, Dutch law does not provide for any statutory defences. For instance, there is no legally enshrined distinction between favours that are culpable and favours that are not. There is also no statutory legal exception with respect to facilitation payments.
Actual directors and instructors are often officers holding managerial or senior positions within the company involved. However, they do not necessarily have to be directors under the articles of association or managing directors of that company, and vice versa the fact that an individual is, for example, a director under the articles of association does not make him or her criminally liable. Criminal liability is not linked to a formal position that an individual holds, but depends on the actual involvement of the individual in respect of the criminal offence committed by the legal entity.
It is up to the PPS to decide whether prosecution is expedient, also in the case of bribery. The instructions for the investigation and prosecution of public bribery in the Netherlands contain a non-exhaustive list of factors concerning the expediency of the prosecution of alleged acts of bribery. Such factors setting the standard of whether or not prosecution is expedient include the value of the favour, whether or not the act was contrary to the applicable code of conduct, the incidental nature of the actions and the effects of the bribery. Since the instructions have binding effect for the PPS, see 1.1 Legal framework for offences, these factors could also be used by the defence to challenge the public prosecutor's right to have initiated criminal proceedings. In addition, the list of factors
mentioned above can also be used as a defence against the sentence demanded by the prosecution.
Furthermore, the instructions for the investigation and prosecution of bribery abroad explicitly address facilitation payments. These instructions state that facilitation payments are, in principle, also punishable, but that the PPS considers it inopportune to have a stricter prosecution policy than that required under the Anti-Bribery Convention. Therefore, facilitation payments will, in principle, not be prosecuted. Please note that the decision of the public prosecutor about whether or not to prosecute will depend on the question of whether it truly concerns facilitation payments. Factors that are taken into account in this assessment are, for instance, whether it concerns an act or omission that the official involved had to perform as a matter of law (the payment must in no way have a distorting influence on the competition), whether the payment of the bribe was initiated by the foreign official and whether the bribe was recorded transparently in the company's books and records. Under certain circumstances it might be necessary to start a criminal investigation in order to assess properly whether the payments can be considered facilitation payments.
2.2 Exceptions
With regard to commercial bribery, Dutch law provides for one statutory ground for immunity from prosecution. Persons cannot be prosecuted for bribery of their spouses. This follows from Section 338 DPC in conjunction with Section 316 DPC.
2.3 De Minimis Exceptions
Dutch law does not provide for de minimis exceptions for bribery offences. The instructions for the investigation and prosecution of public bribery in the Netherlands explicitly stipulate that favours of little value are also culpable and can be reason for criminal proceedings depending on their nature and effect. The instructions for investigation and prosecution of bribery abroad also stipulate that the mere contracting of a local agent, a representative or consultant can lead to criminal liability under certain circumstances.
Case law shows that defendants present a variety of reasons why their acts would not qualify as active or passive bribery. In recent case law defendants have argued (partially successfully) that the favours were part of regular business transactions. Defendants have also argued (partially successfully) that favours were part of regular
interaction within a long-time friendship. Defendants that were prosecuted for passive bribery have argued (partially successfully) that they reasonably could not have presumed that the favours were presented to them in order to gain an unfair advantage or that they could not have presumed that favours were made with regard to their actions in the performance of their (former) role as a public official. Recently, the Supreme Court remanded a case to the Court of Appeal because the Court of Appeal omitted to take into account the possible absence of all guilt (afwezigheid van alle schuld) since the defendant claimed that he had not known that he was considered a public official in his position as a `pro tem' director of a company that promoted cultural activities in a city. This case is still pending.
2.4 Exempt Industries/Sectors
There are no sectors or industries exempt from bribery offences as laid down in the DPC. In principle, the bribery provisions are applicable in all sectors and industries.
2.5 Safe Harbour or Amnesty Program
Dutch law does not provide for safe havens or amnesty programmes based on self-reporting or adequate compliance procedures/remediation efforts. The DPC does not contain a specific provision/statutory defence that states that a company shall be exempted from criminal liability if it has implemented an effective compliance programme. Therefore, having such a programme in place will not automatically prevent criminal liability of the company.
However, as mentioned in 1.2 Bribery an effective compliance programme may potentially, under certain circumstances, mitigate the criminal liability risk of the company.
3.Penalties
3.1 Penalties on Conviction
The aforementioned bribery offences are punishable by the following maximum penalties.
Active bribery of a public official is subject to a maximum prison sentence of six years and/or a fine of the fifth category (currently EUR82,000). Active bribery of a judge is subject to a maximum prison sentence of nine years and/ or a fine of the fifth category. If a judge is bribed with the objective to achieve a conviction in a criminal case, a prison sentence of 12 years and/or a fine of the fifth category
can be imposed. If the bribery is committed within the framework of the exercise of a profession, the perpetrator can be removed from office. The DPC also provides for the possible deprivation of the rights to work as a public official, to serve in the armed forces, to work as an attorney-at-law or to be a court-appointed administrator after a conviction of active bribery.
Passive bribery of a public official is subject to a maximum prison sentence of six years and/or a fine of the fifth category. If the offence is committed by a minister, state secretary, King's commissioner, member of the Provincial Executive, alderman or a member of a representative body a maximum prison sentence of eight years and/or a fine of the fifth category can be imposed. If the offence is committed by a judge a maximum prison sentence of nine years and/or a fine of the fifth category can be imposed. If a judge is bribed knowing that the purpose of the bribe was to achieve a conviction in a criminal case, the judge is subject to a maximum prison sentence of 12 years and/ or a fine of the fifth category. In addition, a perpetrator of passive bribery can be deprived of the right to work as an attorney-at-law or to be a court-appointed administrator. A possible additional penalty for public officials following a serious offence involving abuse of office (ambtsmisdrijf) is that they can be deprived of the right to work as a public official or to serve in the armed forces. A judge can be removed from office as well, but only by the Supreme Court pursuant to the Judicial Officers (Legal Status) Act (Wet rechtspositie rechterlijke ambtenaren).
Commercial bribery, both active and passive, is subject to a maximum prison sentence of four years and/or a fine of the fifth category. If the bribery is committed within the framework of the exercise of a profession, the person can be removed from office. Deprivation of rights to work as a public official, to serve in the armed forces, to work as an attorney-at-law or to be a court-appointed administrator can also be imposed.
On a more general note: if a prison sentence and/or a fine can be imposed, the judge can impose community service instead. The judge can impose community service together with a suspended prison sentence or a maximum non-suspended prison sentence of six months. Prison sentences and fines can be combined without any restrictions. The maximum amount of community service that can be imposed is 240 hours.
Please note that if the defendant is a legal entity, Section 23 DPC provides for the possibility to impose a fine of the next higher category. When a fine of the sixth category (EUR820,000) can be imposed according to law and according to the judge that category does not provide for a sufficient punishment, a fine up to 10% of the annual turnover of the legal entity can be imposed.
In addition to the main sanctions (hoofdstraffen) of prison sentences, fines and community service, additional penalties (bijkomende straffen) can be imposed. These include confiscation orders, the publication of the court decisions and the abovementioned deprivation of rights to the extent provided for by law. Non-punitive measures (maatregelen) such as asset forfeiture may also be imposed.
3.2 Guidelines Applicable to the Assessment of Penalties
`The National Consultations of the Chairmen of the Criminal Law Sectors of the Courts of Appeal and the District Court' (Landelijk Overleg Vakinhoud Strafrecht, hereinafter: LOVS Guideline) contains a separate section for fraud offences in general. The LOVS Guideline stipulates that it also applies to bribery offences. Recent case law has confirmed once more that judges are not bound by the LOVS guideline and that the sentences mentioned merely serve as orientation points. In the LOVS Guideline the amount of pecuniary damages is used as a reference point for the sentences. However, in case law the amounts stipulated in the guideline are also used when considering the benefits to the perpetrator. The LOVS Guideline is divided into seven categories:
EUR 0 EUR 10,000 EUR 10,000 EUR 70,000 EUR 70,000 EUR 125,000
EUR 125,000 EUR 250,000 EUR 250,000 EUR 500,000
a prison sentence of 1 week up to 2 months and/or community service a prison sentence of 2 5 months and/or community service a prison sentence of 5 9 months or community service in combination with a suspended prison sentence a prison sentence of 9 12 months a prison sentence of 12 18 months
EUR 500,000 EUR 1,000,000 EUR 1,000,000 and more
a prison sentence of 18 24 months a prison sentence of 24 months maximum prison sentence
In addition to the abovementioned chart, the LOVS guideline contains a non-exhaustive list of factors that the judge is supposed to take into consideration when passing a sentence. These factors are, inter alia, the duration of the offences and the duration of the criminal investigation, whether the perpetrator is a natural person or a legal entity, whether the pecuniary damages have been compensated or not, whether the defendant has co-operated in the investigations and the financial capacity of the defendant.
4.Whistle-blowing
4.1 Protection Afforded to Whistle-blowers
In relation to whistle-blowing on work-related misconduct, a certain level of protection is offered to whistle-blowers. It follows from the House for Whistle-blowers Act (Wet huis voor klokkenluiders,hereinafter:Whistle-blowers Act) that an individual must be able to report misconduct and may not be treated prejudicially based on this report. This is applicable to individuals who suspect a case of misconduct within the organisation they work for or used to work for, or within an organisation they are acquainted with based on their duties. Prejudicial acts include dismissal, internal transfer, denying a request for internal transfer, denying a raise or denying a request for leave without cause.
However, such protection is only offered if: (i) the suspicion is based on reasonable grounds resulting from the knowledge that the employee has acquired in the conduct of his duties; and (ii) the public interest is endangered due to the violation of a regulation, constituting a danger to public health, the safety of persons, the environment or the functioning of public services due to improper conduct or negligence.
In order to effectuate protection offered to whistle-blowers, the Whistle-blowers Act obliges employers with at least 50 employees to draft a whistle-blower policy (this requires the prior approval of the works council) (hereinafter: Policy). The Policy must encompass at least: (i) the procedure for handling an internal report on a suspicion of misconduct; (ii) the definition of a suspicion of misconduct,
taking into account the legal definition thereof; (iii) the officer appointed for handling reports on the suspicion of misconduct: (iv) the duty of the employer to treat the report with confidentiality should the employee so request; and (v) the possibility for employees to consult a confidential adviser about the suspicion of misconduct. The employer is obliged to provide the employees or the individuals working for the employer with a written or electronic copy of the procedure as described above.
Also, a House for Whistle-blowers (hereinafter: House) was set up in the Netherlands as a result of the implementation of the Whistle-blowers Act. The House has both an advisory function and an investigative function regarding suspicions of misconduct. These functions are allocated to separate departments within the House. An employee suspecting a case of misconduct will be able to seek advice on how to handle and report this suspicion. The request for advice is not subject to any specific formalities. The information provided in a request for advice will not be shared with the investigative department of the House unless the whistle-blower agrees to it.
Under certain conditions an employee suspecting misconduct may also ask for an investigation to be conducted by the investigative department of the House. The investigative department shall start the investigation within six weeks of receiving the request for an investigation. However, such an investigation will not be conducted if: (i) the request to conduct an investigation does not comply with the administrative requirements under the applicable law; (ii) the request is manifestly unfounded; (ii) the public interest involved with an investigation or the gravity of the misconduct are manifestly insufficient; (iii) another administrative body is employed with an investigation into the misconduct and the body is able to conduct the investigation appropriately or has already done so; (iv) the employee has not first reported his or her suspicion of misconduct to their supervisor, confidential adviser or other person appointed according to the policy of the employer, unless such reporting may not be reasonably asked of the employee; (v) the report was handled sufficiently by the employer; (vi) the House is already conducting an investigation of the reported misconduct unless a new fact or circumstance may call for an investigation and may lead to another assessment of the case; and (viii) a court already provided an irrevocable judgment on the suspected misconduct.
The employer is obliged to co-operate with all actions necessary for the investigation. Based on the investigation, the House will make recommendations to the employer if necessary. Such recommendations by themselves will not, however, establish any civil liability or suspicion of a criminal offence. The investigative department shall draft an investigation report which includes its findings and its opinion insofar as these findings can be made public in accordance with Article 10 of the Government Information (Public Access) Act (Wet openbaarheid van bestuur). The investigative department will send a draft of the report to the employer and to the applicant. The employer and the applicant may submit written comments during a period of four weeks, starting from the day following that on which the draft of the report has been sent. The department will publish the investigation report on its own initiative.
4.2 Incentives for Whistle-blowers
Although under Dutch law the abovementioned protection is offered to whistle-blowers, no legally enshrined incentives for whistle-blowers exist to report bribery or corruption. However, a whistle-blower, or any other person, who is also a suspect in the criminal investigation he wishes to report on, can request an agreement with the PPS. The PPS will decide whether to agree on an arrangement with that whistle-blower in accordance with the `Instructions for promises to witnesses in criminal cases' (Aanwijzing toezeggingen aan getuigen in strafzaken) (2006A004g) issued by the PPS. The whistle-blower will then qualify as a crown witness and in exchange for their testimony the PPS can request the court reduce the penalty of a crown witness in case they are found guilty. The court hearing the request will take into account the fact that the testimony of the crown witness contributes to the criminal investigation. According to the Dutch Code of Criminal Procedure (Wetboek van Strafvordering, hereinafter: DCCP), the court can reduce the unconditional prison sentence, community punishment or fine by half or convert half of the unconditional prison sentence, community punishment or fine into to a conditional sentence.
4.3 Location of Provisions
The relevant provisions regarding whistle-blowing are located in the Whistle-blowers Act. The regulation of crown witnesses is set out in the DPC. Further details are laid down in the `Direction promises to witnesses in criminal cases' (Aanwijzing toezeggingen aan getuigen in strafzaken) (2006A004g) issued by the PPS.
5.Enforcement
5.1 Enforcement Body
Enforcement of the aforementioned provisions on corruption, both domestic and foreign, is reserved to the PPS on the basis of the Judiciary (Organisation) Act. The PPS is responsible for investigating and prosecuting criminal offences and the enforcement of fines and/or prison sentences imposed by a criminal court. The PPS is authorised to investigate and prosecute criminal offences over which Dutch authorities have jurisdiction on the basis of the sections mentioned in paragraph 1.6 Scope.
In fulfilling its task, the PPS works closely together with the Dutch police, other intelligence and investigative agencies such as the National Police Internal Investigations Department (Rijksrecherche), as well as sector-specific supervising authorities. With regard to gathering documentation and information, the PPS depends heavily on the police and the agencies, which have in case of suspicion of an offence and under certain circumstances general and/or special investigative authority pursuant to the DCCP. This authority includes the use of coercive measures, such as seizure of goods, arrest of persons, search of premises, examination of witnesses and/or wiretapping of telephones. Depending on the severity of measures to be taken, prior permission of an investigative judge (rechtercommissaris) may be required.
On behalf of the PPS, a public prosecutor (officier van justitie) is in charge of the investigation and prosecution on a case-by-case basis. A national public prosecutor for combating corruption (landelijke corruptieofficier) is appointed within the PPS. The public prosecutor involved has wide discretion on whether or not to prosecute a suspected criminal offence. In general, the public prosecutor has several enforcement options. First, the public prosecutor may decide not to prosecute the offence (seponeren), for example if not enough or no conclusive evidence is available, if prosecution of the offence is considered inopportune or if the act constitutes no criminal offence. Another option for the public prosecutor to finish the case is to issue a punishment order (strafbeschikking). If the punished person or entity does not agree to such a punishment order, they or it may raise an objection, after which the case will be brought to court.
With respect to offences punishable by prison sentences of less than six years (such as bribery of public officials and
commercial bribery), the public prosecutor may make the suspected person or entity a proposal for an out-of-court settlement (transactie) pursuant to Section 74 DPC. In general, out-of-court settlements do not require an admission of wrongdoing, but this may be required under the terms of the settlement. If the terms of the out-of-court settlement are not met, the public prosecutor may bring the case to court. If the terms are met, the PPS will lose its right to prosecute the person involved.
The public prosecutor will, in any case, bring to court offences in relation to which a punishment order or out-of-court settlement is not considered to be adequate. At court the PPS is represented by the public prosecutor involved, who will demand a certain punishment supported by reasons.
Enforcement bribery
In relation to bribery offences, the PPS is bound by the abovementioned Instructions for the investigation and prosecution of public bribery and Instructions for the investigation and prosecution of bribery abroad.
The Netherlands has been under fire for its weak anti-corruption enforcement in the past. Both Transparency International and the OECD Working Group on Bribery have reported negatively in their reports of 2014 and 2012 respectively, on the implementation and enforcement of the OECD Anti-Bribery Convention. They have expressed concerns over the lack of investigating activity of the PPS and the limited resources made available for this purpose. In addition, the OECD Working Group on Bribery urged the Netherlands to complete prosecutions of bribery which result in convictions, instead of using out-of-court settlements.
Following on from the OECD Anti-Bribery Convention and the aforementioned reports, the PPS has made fighting corruption, more specifically bribery of foreign public officials by Dutch companies, one of its top priorities. As mentioned, a national public prosecutor for combating corruption has been appointed.
With respect to domestic bribery, the PPS's enforcement effort recently led to several convictions and settlements in bribery cases, such as the Klimop real estate fraud case (commercial bribery) and the Rotterdam Port bribery case (active and passive bribery of public officials). In December 2016 and February 2017 respectively the PPS reached
out-of-court settlements with Peugeot and Renault, both for EUR2 million relating to allegations of active bribery of a public official with regard to the fleet management of the Dutch Ministry of Defence. It should be noted in this respect that the Netherlands has dropped three places in ranking (to number eight) on the latest annual Corruption Perception Index of Transparency International with respect to bribery of public officials.
With respect to foreign bribery, the PPS recently reached high-value settlements with Dutch companies. In November 2014 the PPS and the Netherlands-based oil platform services company SBM Offshore N.V. reached an out-of-court settlement for USD240 million relating to allegations of active bribery of public officials in (amongst others) Brazil by SBM sales agents. The settlement amount consisted of a USD40 million fine and USD200 million in disgorgement. SBM had selfinitiated (and self-disclosed) its internal investigation into the offences. The PPS worked closely together with the United States Department of Justice (hereinafter: DOJ) on the investigation of the alleged offences. Initially, after the announcement of the settlement with the PPS, the DOJ indicated that it had closed its own investigations into the allegations. However, according to the SBM 2015 annual report, in January 2016 the DOJ informed SBM that it had reopened its investigation.
With reference to the settlement reached with SBM, in 2015 both Transparency International and the OECD Working Group on Bribery reported that the Netherlands had taken substantial steps to implement the recommendations made earlier and that it had demonstrated significant progress with regard to enforcement of bribery provisions. However, in their conclusions both organisations remarked that improvements still need to be made with respect to the accuracy of enforcement, availability of resources for investigative and prosecutorial capacities and implementation of the OECD Anti-Bribery Convention.
In 2016 the PPS announced that Vimpelcom Ltd, an international telecom provider with its headquarters in the Netherlands, and its Dutch subsidiary Silkway Holding B.V. accepted an out-of-court settlement for USD795 million relating to allegations of active bribery of public officials in Uzbekistan and keeping inaccurate books and records. The settlement was offered by the PPS, the DOJ and the United States Securities and Exchange Commission
(hereinafter: SEC). Half of this amount was to be paid to the PPS, and half to the DOJ and SEC. The Netherlands' resolutions in both cases show that the PPS is increasingly co-ordinating with prosecutors in other jurisdictions. Due, for example, to the extraterritorial effect of the United States Foreign Corrupt Practices Act (which, amongst others, criminalises bribery of foreign public officials), multi-jurisdictional investigations and prosecutions will occur more often. In that regard, protection of the ne bis in idem principle (or doublejeopardy principle), which on the basis of Dutch law (Section 68 DPC) has transnational effect, is a point of attention for the prosecutors in all jurisdictions.
Furthermore, some recent developments may be noted with respect to the enforcement of bribery. The Dutch government has increased the availability of resources. Consequently, as of 1 September 2016 an Anti-Corruption Centre of the Fiscal Intelligence and Investigation Service has been operational as well as a `dedicated team' of prosecution experts responsible for the criminal enforcement of bribery (under supervision of the national public prosecutor for combating corruption).
5.2 Guidance for Enforcement Bodies
The most significant guidance is contained in the following: -- The `Instructions for the investigation and prosecution
of bribery of public officials in the Netherlands'; -- the `Instructions for the investigation and prosecution
of bribery abroad'; and -- the National Consultations of the Chairmen of the
Criminal Law Sectors of the Courts of Appeal and the District Court'.
5.3 Jurisdiction for the Enforcement Body/ Bodies
See 1.6 Scope for the jurisdiction for the enforcement bodies.
5.4 General Powers and Limitations of the Enforcement Body/Bodies
There is no exhaustive enumeration of the measures of inquiry that may be ordered by the PPS or the investigating judge in case of bribery. In order to gather sufficient information in case of a suspicion of bribery, they may take all necessary general and/or special investigative measures as provided in the DCCP; see par. 5.1 Enforcement body. The limits of these measures are based on the specific circumstances provided for in the provisions
constituting the general and/or special investigative authority. Furthermore, general limitations may be found in human rights provisions.
5.5 Powers of the Enforcement Bodies to Require Documentation
With regard to persons, not being suspects, the enforcement bodies may, under circumstances, require documentation based on Section 126nd DCCP. In general, in case of a suspicion, the suspect has a right not to incriminate himself/herself, such that the enforcement bodies cannot require suspects to cooperate by providing documentation, or information in general, upon request. With regard to suspects, the enforcement bodies inter alia have the possibility (under specific circumstances) to seize documentation; see 5.1 Enforcement Body.
5.6 Process of Application for Documentation
The enforcement bodies may require documentation from persons not being suspects. The enforcement bodies need to make a formal request in writing, as well as a formal report.
5.7 Discretion for Mitigation
The most significant discretion for mitigation of enforcement powers by the enforcement bodies are the following: -- The PPS may decide not to prosecute an offence
(seponeren) in case it considers prosecuting inopportune; -- the PPS may issue a punishment order (strafbeschikking); -- the PPS may make the suspected person a proposal for an out-of-court settlement; -- in case the PPS takes the case to court, it has a discretion to request the court to install a specific punishment.
The PPS, in general, has a wide discretion regarding the use of its enforcement powers. In relation to bribery, the PPS is bound by the Instructions for the investigation and prosecution of public bribery and the Instructions for the investigation and prosecution of bribery abroad when deciding upon the use of its enforcement powers. For details on the use of these enforcements measures and the Instructions see 5.1 Enforcement body.
5.8 Jurisdictional Reach of the Body/ Bodies
See 1.6 Scope for the jurisdiction for the enforcement bodies.
6. Future Changes
6.1 Likely Changes to the Applicable Legislation or the Enforcement Body
In February 2017 the first part of a bill for the new DCCP was issued for public consultation. The aim of amending the DCCP is to tailor the law to the current
modern, digital society and to increase accessibility for practitioners and civilians. It is expected that a new DCCP will be implemented within a couple of years. No specific amendments on anti-corruption enforcement are included in this first part.
Contact
Susanne van Breukelen T +31 20 578 51 49 F +31 20 578 58 18 [email protected]
David Emmelkamp T +31 20 578 51 69 F +31 20 578 58 18 [email protected]
Bram Horenblas T +31 20 578 54 35 F +31 20 578 58 62 [email protected]
Nicky Touw T +31 20 578 51 55 F +31 20 578 58 18 [email protected]
