30 June 2016

What is the procedure for a business license in the Netherlands?

Category: Bibob-procedure

The Dutch Bibob Act is a Dutch ‘prevention of crime’ act intended to prevent crime and money laundering. Revocation or refusal of a license in The Netherlands can therefore be triggered by an investigation based on the Bibob Act. The Bibob Act prevents license abuse, prevent the Dutch government bodies doing business with the wrong partners and prevent permits that may be misused. The Act provides for a mechanism for combat organized crime through an administrative procedure. Transactions or licenses that are subject to the integrity test are investment in real estate in The Netherlands, subject to licenses, hotel and café business, coffee shops, sex establishments, construction and other manufactural industrial sectors in The Netherlands. read also: integrity protocol Netherlands.

Business license screening under prevention of crime act

In the Bibob procedure administrative law and criminal law are intertwined. Criminal records and tax records can be used for the integrity investigation. Documents from a criminal investigation, even if no charges were made, may be taken into account. The investigation done by the Bibob bureau investigates therefore all existing information. On the basis of this information it is established whether a serious risk of abuse of a license or subsidy exists and should have legal consequences like refusal of a permit or revocation of a business license.

Refusal or revocation of license in the Netherlands

In case of refusal of a license in The Netherlands, this is not considered a criminal charge. The decision to refuse a license is an administrative decision and is subject to complaint an appeal procedure with the administrative court in The Netherlands. In the administrative procedure the focus is on the legality of the decision to revoke or refuse a license, as well as the proportionality and subsidiarity of the decision of the government. The general idea is that the Bibob Act should only be applied in case of the vision of serious criminal events, such as organized crime. Recently our case law is developing, which shows that government bodies use the Bibob Act to refuse or withdraw a license. The outcome of a Bibob procedure cannot be automatically copied by a Dutch licensing authority. The government should valuate and study the Bibob report. The licensing authority should give its own reasons in a decision for refusal of a license or withdrawal of a license.

Dutch procedure for withdrawl of license

A refusal or withdrawal of a license under the Bibob Act can be a violation of the presumption of innocence as stipulated in article 6 (2 ECHR). According to the administrative court in The Netherlands (Raad van State), the presumption of innocence can be violated in a Bibob procedure. Dutch lawyers have therefore focused on limited judicial control of basic rights following from article 6 ECHR as well as Dutch rules and principles of proper procedure.

Objection procedure refusal of license or permit

The decision of the licensing authority following the Bibob procedure may be subject to the administrative procedure with the Dutch court, if the applicant objects against the decision. A Dutch public lawyer can file the objection in a complaints procedure with the licensing authority. Lacking a reversed positive decision of the authority an appeal can be filed with the Dutch Administrative Court. The administrative court does not have full access to the material used for the Bibob report. For any questions on a Dutch business licenses of the integrity procedure please contact public law attorney.