Cathalijne van der Plas: Once a laggard, the Netherlands finally tackles overseas bribery
Monday, September 19, 2016 at 9:08AM
Cathalijne van der Plas in Ballast Nedam, KPMG, Netherlands, SBM Offshore NV, Shell, VimpelCom

First the good news. The Netherlands ranked fifth on the latest Corruption Perceptions Index, up from eighth last year, and now trailing only Denmark, Finland, Sweden, and New Zealand on the CPI.

On TI's latest Bribe Payers Index, the Netherlands ranked highest, meaning companies from the Netherlands were perceived as bribing abroad the least.

Now the not-so-good news. According to TI, enforcement by the Netherlands against overseas bribery is "limited." That compares to other countries such as Germany, Switzerland, the UK and the U.S., which have enforcement characterized by TI as "active." Austria, Australia, Canada, Finland, Italy, and Norway all have "moderate" enforcement, TI said.

Several well-known Dutch companies have been involved in bribery abroad. SBM Offshore and Ballast Nedam entered into out-of-court settlements in the Netherlands.

More recently, the Dutch Public Prosecution Service entered into a settlement with Russian telecom company VimpelCom, headquartered in the Netherlands. It was part of a joint settlement with the U.S. DOJ in which VimpelCom and its subsidiary paid $397.6 million to resolve DOJ and SEC enforcement actions for bribing a government official of Uzbekistan.

Authorites earlier this year raided the Hague offices of Royal Dutch Shell. The company is reportedly under investigation for corruption in Nigeria.

All those actions came after the OECD Working Group's December 2012 Phase 3 Report on the Netherlands (available here in pdf). It expressed concerns about efforts regarding the active investigation and prosecution of corruption by Dutch citizens or Dutch companies abroad.

But in its “Follow-up to the Phase 3 Report & Recommendations” released in May 2015 (available here in pdf), the OECD Working Group said the Netherlands had demonstrated significant progress -- fully implementing 11 of 22 recommendations and partially implementing six others.

From December 2012 to May 2015, the Netherlands opened seven new foreign bribery investigations, bringing the total number to 16 since the entry into force of the OECD Anti-Bribery Convention. Ten of these are ongoing investigations and four have been closed.

The remaining two investigations are the cases mentioned above of the Dutch companies SBM Offshore and Ballast Nedam. SBM Offshore agreed to a $40 million fine and a $200 million disgorgement for illegal payments in Equatorial Guinea, Angola, and Brazil.

Ballast Nedam agreed to pay €17.5 million ($19,7 million) to resolve the Dutch enforcement action.

As part of the Ballast Nedam case, KPMG Accountants NV agreed to pay a €3.5 million ($3.9 million) fine and €3.5 million in confiscation for accounting misconduct in connection with overseas bribery.

The OECD also flagged 24 other foreign bribery allegations that apparently weren't investigated.

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In the next post, I'll talk about recent amendments to the Dutch Criminal Code that are helping authorities prosecute overseas bribery. I'll also discuss Dutch civil remedies used to fight graft.

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Cathalijne van der Plas, pictured above, is an associate partner at Höcker Advocaten in the company law division. Cathalijne’s practice is international in nature, consisting in large part of civil fraud and asset recovery matters. She's a contributor of FraudNet, the network of the International Chamber of Commerce (ICC) which provides support to victims of commercial fraud (international or otherwise).

Article originally appeared on The FCPA Blog (http://www.fcpablog.com/).
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