Potential Changes to Settlement of High-Profile Corruption Cases in the Netherlands
01 April 2019
Although the Netherlands is generally considered low risk when it comes to bribery and corruption, the Dutch Public Prosecution Service (DPPS) has been involved in settling several of the most high-profile cases involving global corporations of the last years. By way of example, the DPPS settled a bribery investigation with SBM Offshore in 2014 for USD240m and participated in the settlements with Vimpelcom (USD795m, of which USD397.5m was for the DPPS) and Telia Company (USD965m, of which USD274m for the DPPS). This settlement practice has increasingly been criticised, and in November 2018, this criticism culminated in a proposal by the Dutch Parliament to order the government to introduce a judicial review mechanism for high-profile settlements.
The high-profile settlements mentioned above were reached using a so-called ‘transaction’, whereby the DPPS offers the suspect one or more conditions (such as the payment of a monetary amount) to prevent prosecution. In essence, this is a contract between the DPPS and the suspect and there is a relatively high degree of freedom in drafting the relevant contractual terms. However, for settlements exceeding EUR50,000, the DPPS must follow a specific procedure which requires approvals from the executive board of the DPPS and from the Minister of Justice and Security.
Criticism on settlements
Although settlements of high-profile criminal investigations have always resulted in criticism in the media, this criticism has increased markedly over the last years. This criticism has come from various groups, and has concentrated on (i) the perception of backroom politics and the lack of transparency on the conduct being settled due to the absence of any public hearing, (ii) the lack of development of relevant case law, (iii) the perceived class justice of the high-profile settlement practice and (iv) the risk that the DPPS will abuse its power in cases where the suspect has a significant interest in settling a case quickly. In response to some of these criticisms, the DPPS has changed its practice over the last years, notably increasing transparency through the publication of an (increasingly elaborate) statement of facts and, recently, the publication of the signed settlement agreement.
In 2018, the criticism on high-profile settlements not only increased in tone and intensity, but was also echoed in formal judicial documents. Most notably, the Dutch Council for the Judiciary (a representative body of courts in the Netherlands) voiced similar concerns publicly and through a formal advice to change the Dutch Code of Criminal Procedure by introducing judicial oversight of high-profile criminal settlements. In November 2018, this resulted in the Dutch Parliament ordering the government to introduce a judicial review mechanism for high-profile settlements. The Dutch Minister of Justice and Safety stated that he will, in consultation with the DPPS and the judiciary, draw up such a mechanism. It is at this time unclear how and when judicial oversight to high-profile criminal settlements will be introduced, with some suggesting to adopt a system similar to the UK’s DPA procedure.
Although much of the criticism on the current high-profile settlements assumes that companies entering into such settlement are ‘getting a sweet deal,’ that does not mean that the introduction of a judicial review mechanism is necessarily detrimental for the settling company. As noted above, some criticism focuses on the risk that the DPPS abuses its powerful position in settlement negotiations. Depending on the way that judicial oversight would be implemented, companies might be better protected against pressure to settle crimes that cannot be proven beyond reasonable doubt. In the meantime, the one thing that is clear, is that the procedure through which high-profile corruption cases will be resolved, is likely to change significantly in the coming period. This is particularly relevant for companies currently facing investigations as this creates even more uncertainty with respect to the expected consequences of such investigations.