3 June 2019

Scarce Licenses in the Netherlands – the Book

Category: Licenses

Some licences in the Netherlands are scarce, including Dutch exemptions, concessions and subsidies. This scarcity may result from Dutch government policies or from practical or technical constraints.

Permits for passenger boats on the Amsterdam canals are limited because of the limited space in the canals; locations for restaurants on the beach are limited because of the limited space available. Dutch coffeeshops selling cannabis are limited for policy reasons, which in the Netherlands differ from municipality to municipality. Special rules apply where there are limitations on the numbers of rights or permits that can be granted. Allocation procedures for these permits should be done according to these rules.

Scarce licenses, exemptions, concessions and subsidies

The book The Battle for Scarce Licenses (Kluwer, 2019) not only deals with the scarcity of licences in the Netherlands but also explains the general licence procedure which applies to the grant of all licences, permits, subsidies and exemptions in the Netherlands. The book mentions numerous examples of case law, media news and cases from the author’s law practice on issues relating to scarce permits in the Netherlands, some of which have made the headlines, like the disputed Dutch monopoly on lottery and sports betting.

Allocation of scarce licences in the Netherlands

The most important rule is the obligation of transparency under the laws governing the allocation of licences in the Netherlands. This rule applies where licences are granted to only one or a few providers. This obligation must be taken into account when allocating scarce licences, concessions, subsidies or exemptions. Activities that require a scarce licence in the Netherlands include petrol stations, use of frequencies for mobile communication, radio frequencies, public charging stations, taxi bikes, amusement arcades, coffee shops, beach catering pavilions, street/market vendor stands, etc. Disputes regarding scarce licences have given rise to a rich body of case law in the Netherlands. Competitors may file complaints or an appeal against a licence granted to a competitor. This happens quite often in case of supermarkets and DIY stores who try to protect their business against the entry of competitors in their area.

Transparency in Dutch licensing systems

Under the obligation of transparency that applies to the allocation of licences in the Netherlands, applicants must have equal chances to compete for a licence and all parties should be provided with timely and sufficiently detailed notice of the allocation procedure. The obligation of transparency in licensing systems was introduced with the Betfair judgment. This doctrine, which has been further developed in the case law of the Dutch administrative law courts, is based on the principle of equal treatment. It also flows from the European (case) law and specifically the EU Services Directive. The principles flowing from the Services Directive are similar to those that apply under procurement law. Article 12 of the Services Directive on scarce permits (authorisations) says it all: where the number of authorisations available for a given activity is limited because of the scarcity of available natural resources or technical capacity, Member States shall apply a selection procedure to potential candidates which provides full guarantees of impartiality and transparency, including, in particular, adequate publicity about the launch, conduct and completion of the procedure. The EU Services Directive has been implemented into Dutch national law through the Dutch Services Act.

Legal requirements for scarce licence procedures in the Netherlands

The legal requirements for scarce licence procedures in the Netherlands can be summarised as follows. Conditions and rules for the allocation procedure should be published beforehand in a proper and unequivocal manner; the procedure should be advertised sufficiently; the procedure should have clear deadline for application. Once the procedure has commenced, the authority is not allowed to change the procedure. During the procedure extra information cannot be forwarded to one applicant only. Failure to comply with these requirements may invalidate the allocation procedure. Under the current rules for scarce licences, where licences are limited in number, permits cannot be issued for an indefinite period of time. Furthermore, Dutch scarce rights and permits cannot be prolonged automatically, as this is inconsistent with EU case law and the Services Directive.

Compliance with Netherlands license regulation

Several procedures for the allocation of scarce permits in the Netherlands do not currently comply with the law (as of the date of publication; June 2019)). The authorities responsible for this should modify the allocation procedures to comply with relevant EU and Dutch law. In order to comply with the current law, it may be necessary for authorities to create transitional provisions. There is no concrete method for the allocation of licences, concessions or exemptions prescribed by law. Some of the allocation methods used are an auction, comparative assessment, drawing of lots or order of receipt, first come first served.

Legal protection of applicants for Dutch licenses

This book also deals with the legal protection of applicants involved allocation procedures for scarce licences, as well as the refusal of licences, withdrawal of licences and law enforcement against a permit holder. It may be expedient for an applicant to intervene during the procedure before the actual decision is publicised in case it’s rights are harmed or prejudiced. Because of the complex nature of some Dutch allocation procedures, the approach of Dutch authorities may be cause for legal action by the disappointed applicant. Third parties may also challenge the grant of a licence. Competitors, neighbours, neighbouring businesses or interest groups may file a challenge or an appeal in an administrative procedure. This can lead to delays in licence procedures where a decision is suspended because of a preliminary judgement of the Dutch Court.

Integrity screening for certain Dutch licenses

For certain Dutch licences, the procedure may involve an integrity screening. Government authorities or local bodies in the Netherlands have the right to refuse grants, licences, permits, subsidies or building contracts to organisations or businesses suspected of involvement in criminal activity. Before a permit is granted by any government body, a separate integrity check must be performed in the Netherlands. The specifics of these integrity assessments are regulated under the “Administrative Integrity Assessments Act” ( “Wet Bevordering Integriteits Beoordelingen door het Openbaar Bestuur”, or: “Bibob”). The Dutch probity assessment may be performed as a so-called small integrity assessment by the local administration and/or municipality. The local administration may also opt to invoke a national assessment screening, which is performed by the national Bibob institute, or Landelijk Bibob Bureau. This Bibob-investigation results in non-binding advice to the authority in which the licence applicant’s risk status is earmarked as low, medium or high.

About the author: Mark van Weeren

Mark van Weeren is a business lawyer in Amsterdam who helps companies with matters relating to permits, compliance and procedures. In this book he draws on his 30 years of experience as a lawyer dealing with Dutch permits, negotiation with Dutch authorities, administrative law, public law enforcement and litigation. He represents clients applying for Dutch permits as well as parties whose permits are being challenged by neighbours, competitors, authorities and other parties. He also acts on behalf of parties who have been subject to a penalty, withdrawl of permits or coercive action up by Dutch Authorities. Mark frequently publishes blogs on Dutch legal issues and has also written a book on ground lease in the Netherlands (‘50 Vragen over Erfpacht’, Kluwer, 2014).