Netherlands Phase 4 Report
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IMPLEMENTING THE OECD ANTI-BRIBERY CONVENTION PHASE 4 REPORT: Netherlands Implementing the OECD Anti-Bribery Convention Netherlands Phase 4 Report This Phase 4 Report on the Netherlands by the OECD Working Group on Bribery evaluates and makes recommendations on the Netherlands' implementation of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and the 2009 Recommendation of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions. It was adopted by the 44 members of the OECD Working Group on Bribery on 16 October 2020. The report is part of the OECD Working Group on Bribery’s fourth phase of monitoring, launched in 2016. Phase 4 looks at the evaluated country’s particular challenges and positive achievements. It also explores issues such as detection, enforcement, corporate liability, and international cooperation, as well as covering unresolved issues from prior reports. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. 3 Table of Contents EXECUTIVE SUMMARY ................................................................................................................... 5 INTRODUCTION ................................................................................................................................. 7 Previous Evaluations of Netherlands by the Working Group on Bribery ............................................ 7 Phase 4 Process and On-Site visit ........................................................................................................ 7 Netherlands Economy and Foreign Bribery Risks ............................................................................... 8 Foreign Bribery Cases in the Netherlands ......................................................................................... 10 A. DETECTION OF THE FOREIGN BRIBERY OFFENCE ................................................. 15 A.1. Detection through the Dutch Anti-Money Laundering Framework .................................. 15 A.2. Detection by the Tax Authority ......................................................................................... 20 A.3. Whistleblower Protection and Reporting .......................................................................... 21 A.4. Self-reporting/Voluntary disclosure by companies ........................................................... 27 A.5. Detection and Reporting by Accountants and Auditors .................................................... 28 A.6. Increasing detection through other potential sources ........................................................ 30 B. ENFORCEMENT OF THE FOREIGN BRIBERY OFFENCE .......................................... 34 B.1. The Foreign Bribery Offence ............................................................................................ 34 B.2. Investigative and Prosecutorial Framework ...................................................................... 40 B.3. Investigating Foreign Bribery ............................................................................................ 49 B.4. Concluding a Foreign Bribery Case .................................................................................. 57 B.5. Sanctioning a Foreign Bribery Case .................................................................................. 66 B.6. Mutual Legal Assistance and Extradition in Foreign Bribery Cases ................................. 74 C. LIABILITY OF LEGAL PERSONS ...................................................................................... 79 C.1. Scope of Corporate Liability for Foreign Bribery and Related Offences .......................... 79 C.2. Engagement with the Private Sector .................................................................................. 82 D. OTHER ISSUES ....................................................................................................................... 85 D.1. Money laundering .............................................................................................................. 85 D.2. Tax measures for combating bribery ................................................................................. 86 D.3. Export credit and public advantages .................................................................................. 87 D.4. Official Development Assistance ...................................................................................... 92 CONCLUSION: POSITIVE ACHIEVEMENTS, RECOMMENDATIONS, AND ISSUES FOR FOLLOW-UP ............................................................................................................................. 97 ANNEX 1: PHASE 3 RECOMMENDATIONS TO THE NETHERLANDS AND ASSESSMENT OF IMPLEMENTATION BY THE WORKING GROUP ON BRIBERY IN 2015 ..................................................................................................................................................... 102 ANNEX 2: LIST OF PARTICIPANTS IN THE ON-SITE VISIT ............................................... 105 THE NETHERLANDS: PHASE 4 REPORT 4 ANNEX 3: LEGISLATIVE EXTRACTS ....................................................................................... 106 ANNEX 4: DIRECTIVE ON LARGE TRANSACTIONS (OFFICIAL TRANSLATION) ....... 108 ANNEX 5: LIST OF ABBREVIATIONS, TERMS AND ACRONYMS ..................................... 114 THE NETHERLANDS: PHASE 4 REPORT 5 EXECUTIVE SUMMARY This Phase 4 report by the OECD Working Group on Bribery in International Business Transactions (Working Group or WGB) evaluates and makes recommendations on the Netherlands’ implementation and enforcement of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and related instruments. This report details the Netherlands’ particular achievements and challenges in this regard, including with respect to enforcement of its foreign bribery laws, as well as the progress the Netherlands has made since its Phase 3 evaluation in 2012. Since Phase 3, the Netherlands has taken significant steps to increase its enforcement of the foreign bribery offence. Twenty-six new foreign bribery investigations have been opened since Phase 3, when there were four ongoing investigations. The increase in the number of investigations is particularly noticeable since 2016, which coincides with the creation of a dedicated law enforcement framework to investigate and prosecute foreign bribery. However, the number of foreign bribery cases concluded with sanctions remains low. The Netherlands has sanctioned seven legal persons and two natural persons for foreign bribery since the Convention entered into force, all through non-trial resolutions and in relation to only five foreign bribery schemes. Enforcement of the foreign bribery offence against natural persons has proven particularly challenging and none of the Netherlands’ four high profile corporate foreign bribery cases involved liability for the natural persons involved. Processes for assessing legal privilege claims are proving a significant obstacle for investigating and prosecuting foreign bribery cases. The Working Group welcomes the recent revision of the Directive on Foreign Corruption, which should remove confusion over the prosecution policy with respect to small facilitation payments. The Netherlands’ framework for detecting foreign bribery has improved significantly since Phase 3. Both the Fiscal Intelligence and Investigation Service (FIOD) and the Dutch Public Prosecution Office (Openbaar Ministerie (OM)) have created dedicated anti-corruption teams which include specialised intelligence units and which work together to detect new cases. The financial intelligence unit’s (FIU) targeted awareness raising efforts and new anti-money laundering legislation led to three foreign bribery investigations being opened following a suspicious transaction report (STR) and significant numbers of reports from the auditing profession. A small number of cases have originated from self-reporting but the Netherlands lacks a comprehensive legal framework for self-reporting and non-trial resolutions, generating uncertainty and reluctance in the private sector. Ongoing parliamentary debate about regulating the use of internal investigations in criminal cases should be followed-up. The much-awaited whistleblower protection regime has faced severe criticism and has yet to bear fruits as a source of detection. It is also undergoing reforms to align it with the EU Whistleblower Protection Directive. Although the Netherlands has a strong framework for international cooperation, including spontaneous sharing of information and informal cooperation, the new Protocol on International Cooperation raises concerns about the role of the Minister of Justice and Security in approving outgoing MLA requests to non- EU member countries. Similar concerns arise in relation to interference by a Dutch ambassador in a foreign bribery investigation, risking considerations prohibited by Article 5 of the Convention and jeopardising the independence of case prosecutors. Retaliation against the whistleblower who reported the Ambassador’s misconduct is even greater cause for concern. The revision of the Directive on Large Transactions at the time of finalising this report removes the requirement for approval of the Minister of Justice and Security