8 June 2016

Dutch fraud protocol for government contracts and licenses

Local government or local bodies in the Netherlands have the right to refuse grants, licenses, permits, subsidies or building contracts to organisations or businesses suspected of involvement in crime. This is subject to an administrative law procedure and of course we offer legal advisory an representation services to help you out on the Dutch integrity regulation. Therefor before a transaction with any government body a separate integrity check must be performed in the Netherlands. The specifics of these integrity assessments are being regulated by the “Administrative Integrity Assessments Act” (Dutch: “Wet Bevordering Integriteits Beoordelingen door het Openbaar Bestuur”, or: “Bibob”). The probity assessment may be performed by the local administration and/or municipality, nicknamed: small integrity assessment . The local administration may also opt to invoke a national assessment screening, which is performed by the national BIBOB institute, or Bibob Bureau. This investigation results in non-binding advice to the authority in which the licence applicants risk status is earmarked as low, medium or high.

Information used by Dutch Integrity Office

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.

Dutch integrity check and costs

Since the abovementioned Bibob integrity advice is non-binding, the administrative body that has opted for the national BIBOB assessment has a final say in the matter. Due to the extensive amount of research involved with a national assessment procedure, the concrete application procedure may take up to a year to reach its completion. The licence applicants are required to pay for all integrity assessments. Whether or not an administrative authority will opt for a small or large integrity assessment, traditionally, heavily depends on the region. For example, the region of Amsterdam is infamous for opting for a large integrity assessment. Depending on the scope of the investigation, costs for initiating this procedure may vary from five hundred (500) euros up to five thousand (5,000) euros. We give forward-looking advice on the regulatory and litigation risks for your business in the Netherlands. We can draw on the expertise of a network of our lawyers and advisors.

Government decision on integrity subject to judicial review

The government body that asked for the advice is free in the decision it takes. Since the integrity law can have serious consequences the decision should be made carefully and should be motivated extensively. The decision (refusing a contract or withdrawing a permit) is subject to an administrative complaints procedure. Our administrative law team specialized in business integrity can represent you in this procedure. It is not uncommon that decisions on integrity are overturned by the administrative court. If the advice is ‘no risk’ the government can grant the contract, but it could refuse the contract on other grounds. If the advice is ‘some risk’ the government can grant or refuse the contract, or grant the contract under additional conditions. Even if the advice is ‘high risk’ the government can grant the contract, or grant the contract under additional conditions, refusing the contract is possible too. For any questions on Dutch public law please contact.