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Netherlands: Draft Legislation on Financial-Economic Crime

(July 17, 2013) It was reported on July 5, 2013, that the Ministry of Security and Justice has submitted to the lower house of the Dutch Parliament, the Tweede Kamer, draft legislation on financial and economic crime. The proposed law would tighten current provisions on such offenses found in the Penal Code and other laws. (Bill on Financial Economic Crime to Parliament, Ministry of Security and Justice website (July 5, 2013); 33 685 Wijziging van het Wetboek van Strafrecht, het Wetboek van Strafvorderingen de Wet op de economische delicten met het oog op het vergroten van demogelijkheden tot opsporing, vervolging, alsmede het voorkomen vanfinancieel-economische criminaliteit (verruiming mogelijkheden bestrijdingfinancieel-economische criminaliteit: Nr. 2 Voorstel van Wet [text of the proposed law], OVERHEID.NL (July 15, 2013).)

Formulation of the proposal has taken more than a year. (Yke Lennartz & Annette van Beers, Draft Bill on Financial-Economic Crime, Norton Rose Fulbright website (June 8, 2012).) Some highlights of the draft law are listed below.

Money laundering: Under the draft legislation, the maximum punishments for different acts of money laundering (witwassen) are increased. For the basic crime (het kale delict, the bare crime), the maximum penalty is increased to six years of imprisonment from the current four. The sentence will be up to eight years if the acts of money laundering are habitual or part of the exercise of a profession. (Bill on Financial Economic Crime to Parliament, supra.)

Corruption: In connection with crimes of corruption in the public sector, bribery of civil servants will entail, upon conviction, a term of imprisonment of up to six years. In the private sector, the penalty for bribery is also increased, from two years of prison to four. This provision is aimed, for example, at accountants, appraisers, and other providers of services who are bribed to overlook embezzlement or to give incorrect assessments of real estate value. (Id.)

Economic crimes: Those who commit economic crimes by systematically evading the relevant rules – e.g., responsible persons in waste-processing companies who ignore environmental regulations or those in fraudulent financial institutions – will be punishable by an increased term of imprisonment, with the maximum now set at four years. (Id.)

Economic crime by legal persons: In addition, because “the current fines often do not terribly impress rich companies,” henceforth the maximum penalty that may be imposed on legal persons found guilty of offenses will be linked to their financial capacity, so that the court can impose larger fines: up to ten percent of the company’s annual turnover. (Id.) At present the highest fines for criminal offenses under Dutch law are about €780,000 (about US$1 million). (Lennartz & van Beers, supra.)

Right of non-disclosure: The procedure is accelerated for assessing whether lawyers or notaries can rightfully claim their right of non-disclosure upon seizure of documents as part of a criminal investigation. There will be fewer delays in investigations of financial economic crime when, for example, correspondence with lawyers or notaries is found upon seizure of a fraudulent company’s accounts. (Bill on Financial Economic Crime to Parliament, supra.)

Misuse of public funds: The draft legislation also proposes to amend article 323a of the Penal Code, which criminalizes the misuse of grants awarded by the European Union. The proposal calls for broadening the scope of the article to include the misuse of all kinds of public funds. (Lennartz & van Beers, supra.)