Dutch Integrity (Bibob) Procedure for Business Licenses
Category: Administrative law, Bibob proceedings, Bibob-procedure
The Dutch “prevention of crime” framework, known as the Bibob Act, aims to assess the integrity of business partners working with the Dutch government and applicants for government licenses. Under the Bibob Act, Dutch authorities can deny or revoke a license or subsidy if there is a significant risk of future criminal activity. Activities subject to this integrity screening include gambling, remote gaming, cannabis sales, real estate transactions, martial arts events, and other areas requiring Dutch licensing, such as the hospitality sector.
Integrity Screening for Licenses, Permits, and Subsidies in the Netherlands
Due to the complexity and thoroughness of the integrity screening process, companies often require legal support to navigate the Bibob procedure. Our firm has guided numerous foreign companies and investors through this process, helping them collaborate effectively with the relevant Dutch government body. This structured approach is particularly crucial for larger enterprises facing Bibob scrutiny.
The Bibob Act is designed to prevent crime, money laundering, and the misuse of licenses, serving as a tool to combat organized crime through administrative measures.
The integrity screening can apply to real estate investments, construction permits, hotel and café licenses, cannabis coffee shops, Dutch gambling licenses, sex establishments, major events (e.g., martial arts galas), and various sectors in manufacturing and industry within the Netherlands.
The Bibob Integrity Screening Process
The Bibob screening procedure begins with a detailed questionnaire (“Bibob-formulier”) provided by the Dutch licensing authority. License applicants are required to answer numerous questions, with some questionnaires exceeding 50 pages. The requested information typically includes the company structure, shareholders, financial backers, affiliated entities and individuals, directors, financial records, and annual reports. Disclosing complete and accurate information is essential, as a Dutch legal advisor can assist with this often intensive process.
Accurate and comprehensive responses are critical; failing to provide the required information may lead to a failed assessment, and thus a rejected or withdrawn license. The investigating bureau also considers available records, such as tax information.
Business License Screening in the Netherlands under the Bibob Prevention of Crime Act
The Bibob procedure combines elements of administrative and criminal law. Both criminal and tax records can be used in the integrity assessment. Documentation from criminal investigations, even if no charges were brought, may be reviewed. The Bibob Bureau (Landelijk Bureau Bibob) examines all existing data to determine whether there is a substantial risk of license misuse or criminal exploitation. The Bibob Act provides grounds for actions like permit refusal or license revocation based on its findings.
Research and report by the Dutch Integrity Office (LBB)
The Bibob Bureau in the Netherlands has access to secured sources such as the police files and the Tax and Customs Administration. The office uses a standardised screening process. It uses information provided by the company itself en information from open and closed sources. Sources are called open when their information is freely available for everybody. The BIBOB Bureau, part of the Ministry of Justice, not only inspects the antecedents of the applicant, but also checks his or her immediate environment such as other persons in leading positions in the relevant organisation and business relationships. This may result in a recommendation about the degree of risk “ none, some or high“ which the administrative authority runs in unintentionally aiding criminals if the service is to be granted. The Bureau is also responsible for providing information about the effect and implementation of the Act.
License Refusal or Revocation in the Netherlands
License revocation or refusal in the Netherlands can result from a Bibob investigation, which may occur even after a license has been granted if new information surfaces. The decision to refuse or revoke a Dutch license is an administrative action rather than a criminal charge. However, such decisions can be appealed through the Dutch administrative court system. Often, a court injunction is necessary to pause the decision and prevent business closure while the appeal process unfolds.
Counselling a licence specialist in a licence procedrue
It is useful to engage the services of an specialized lawyer if you are not used to integrity testing or litigating. The Dutch Bibob Act has an nature and scope that can seriously affect business. This we can say from our own experience with a lot of cases we have handled. A lawyer specialised in administrative law knows this law well and can use it as a basis for objections and appeals. Administrative law lawyer Mark van Weeren of Blenheim specialises in permits and related procedures, like integrity screening. He wrote the book ‘De strijd om schaarse vergunningen’ (The battle for scarce permits). Blenheim can advise and draw up the necessary legal documents and lodge an objection and appeal against a decision on the permit or application.
We ‘re happy to share our experience with the Dutch Bibob Act with you.
Feel free to contact us.