Dutch probity (Bibob) procedure for Dutch business licences

The Dutch ‘prevention of crime’ act is called the Bibob Act. The act is supposed to test the integrity of business partners with the Dutch government as well as applicants for government permits. The Bibob Act provides a framework to enable Dutch authorities to refuse a license or revoke a license or subsidy in case of serious risk of any crimes in the future. Transactions or licenses that are subject in The Netherlands to the integrity test are, amongst others, licenses for gambling, remote gaming, cannabis, real estate, martial arts gala and other activities that are subject to Dutch licenses, such as catering business.

Netherlands probity screening for licenses, permits and subsidies

Because of the nature and scope of the integrity procedure in the Netherlands companies usually need legal assistance to get through the Bibob procedure. We’ve assisted many foreign companies and investors to survive this challenge, especially for larger companies it’s important to structure the process in co-operation with the government body that is running the procedure. So I’m happy to help anybody out

The Netherlands Bibob Act has to prevent crime and money laundering, abuse or misuse licenses. The Bibob Act provides for a mechanism to fight organized crime through an administrative procedure.

Transactions or licenses that are subject to the integrity test are investment in real estate in The Netherlands, building permits subject to licenses, hotel and café business, coffee shops for caanbis sael, Dutch gambling licenses, sex establishments, big events like martial arts gala’s, construction and other manufactural and industrial sectors in The Netherlands. 

The Bibob integrity screening procedure

The screening procedure in the Netherlands starts with a questionnaire form the Dutch Authority that handles the license (“bibobformuleir). The applicant for a license has to answer a lot of questions. Some of these questionnaires cover more then 50 pages. Requested information is e.g.: the company structure, the shareholders, the financing, other people and companies involved, directors, financial records, annual account etc. A lot of information should be disclosed. A Dutch lawyer can help you out with this, and this assistance is worthwhile is our experience.

It is very important that the questions are answered properly and all requested information is disclosed. Failing to do so, you may fail the test and a license may be refused or withdrawn. The investigation bureau also uses other information and records available, like information form tax records.

Dutch Business License Screening under Prevention of Crime Act

The Bibob procedure is a mixture administrative law and criminal law. Criminal records and tax records can be used for the integrity screening. Documents from a criminal investigation, even if no charges were made, may be taken into account. The investigating Bibob bureau (Landelijk Bureau Bibob) 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 ot the licence may be use for criminal purposes. The Act provides for legal consequences like refusal of a permit or revocation of a business license.  

Refusal or revocation of license in the Netherlands

Revocation or refusal of a license in The Netherlands can therefore be triggered by an investigation based on the Bibob Act. Such an investigation can also be done when a licence has already been granted, when a certain event of new information triggers an investigation. The decision to refuse a Dutch license is an administrative decision and not considered a criminal charge. The decision or refused or withdraw a permit is subject to complaint an appeal procedure with the administrative court in The Netherlands. Very often an injunction is necessary in order to suspend the decision,  to prevent a company from going out of business while the appeal is still pending in court.

Caselaw on Dutch integrity screening is developing quickly

Dutch case law has been developing, and shows that government bodies sometimes use the Bibob Act only in order to refuse or withdraw a license. Dutch lawyers have filed a growing amount of complaints against decisions on refusal and withdrawl of licenses. Especially the courts are inclined to test decision more severe on proportionality. Also alternatives to withdrawl or denial of a licence should be considered by authorities. If this is nog done properly the may squash the decision. The outcome of a Bibob procedure, an advice for the Bibob agency cannot be automatically copied by a Dutch licensing authority. The government should valuate and study the Bibob report. Very often that does not happen. The licensing authority should give its own explanation in a decision for refusal of a license or withdrawl of a license.  

Procedure withdrawl of Dutch license

A refusal or withdrawal of a license should be done according to the rules of the Bibob Act. However the criteria are vague and leave much space for government bodies the use their own interpretation of the integrity rules. A decision may therefor infringe the rights of the licenseholder. Refusal or withdrawal of a license under the Dutch integrity Act can be against the law or even be a violation of article 6 (2 ECHR), the presumption of innocence. The supreme administrative court in The Netherlands (Raad van State) has confirmed that the presumption of innocence can be violated in a Bibob procedure. Dutch lawyers have scrutinized the limited judicial control of basic rights following from Dutch rules and principles of proper procedure and article 6 ECHR.

Appeal procedure against refusal of permit in the Netherlands

The applicant for a Dutch license can file a complaint in case of a negative decision on the license. An administrative procedure with the Dutch court will entail if the applicant objections against the decision. A Dutch public lawyer can file the objection in a complaints procedure with the licensing authority. A hearing will take place. Lacking a reversal of the authority’s decision a Dutch lawyer can lodge an appeal with the Administrative Court. A negative decision of the Court is subject to appeal the Supreme Administrative Court (Raad van State). In all stages of the proceedings it is possible to ask the Court for an injunction to obtaim suspension of the decision. So you can request the Court to suspend the decision of withdrawl of the license for the duration of the procedure.

We ‘re happy to share our experience with the Dutch Bibob Act with you.
Feel free to contact us.