Publication
International arbitration report
In this edition, we focused on the Shanghai International Economic and Trade Arbitration Commission’s (SHIAC) new arbitration rules, which take effect January 1, 2024.
Practical Insights into the New Dutch Policy on Self-Reporting and Cooperation in Criminal Investigations
Netherlands | Publication | diciembre 2024
The Dutch Public Prosecution Office (DPPO) has issued a policy detailing the conditions and potential benefits for legal entities that voluntarily self-report possible criminal offences and/or cooperate in criminal investigations. This guidance offers an opportunity for legal entities to mitigate fines and contribute proactively to the resolution of criminal matters:
- Fine Reduction: Legal entities may be eligible for a fine discount of up to 50%—25% for timely and voluntary self-reporting and an additional 25% for full cooperation during investigations.
- Scope of Cooperation: Cooperation may include conducting self-investigations, sharing relevant data and documentation, ensuring witnesses are available for questioning and avoiding actions that impede the investigation.
- Self-Investigation Standards: Self-investigations must be thorough, objective, and coordinated with the Prosecution to avoid interference with ongoing investigations.
- Exploratory Discussions: Legal entities can engage in preliminary discussions with the DPPO to assess the applicability of this policy before proceeding with self-reporting or cooperation.
This policy provides clarity on the potential benefits of self-reporting and cooperation, including significant fine reductions, but it also leaves wide discretion to the DPPO. Consequently, the decision to self-report and cooperate is far from straightforward. It remains a strategic choice that requires careful consideration of broader factors such as reputational risks, potential parallel exposures in other jurisdictions, implications for individuals, exposure to civil litigation and the potential for business disruption. Making these decisions is particularly challenging in an environment of uncertainty.
1. Background
On 22 November 2024, the DPPO released a new policy outlining the framework for self-reporting and cooperation by legal entities involved in potential criminal offences. This move aligns the Netherlands with practices followed by other jurisdictions, such as the United States1, the United Kingdom2, Germany3, Canada4, France5, Australia6 and addresses recommendations made by the OECD Anti-Bribery Working Group. Specifically, the OECD has urged the Netherlands to establish clear policies and guidelines on self-reporting, detailing the procedures for making such reports, the level of cooperation expected and how self-reporting will be considered in enforcement and sanctioning decisions, particularly in foreign bribery cases.7
Recently, in the Netherlands, the Minister of Justice and Security and the Minister of Legal Protection emphasized (in a public letter to the House of Representatives) the importance of self-reporting and cooperation, highlighting that these actions would greatly influence the tackling of complex criminal investigations in an efficient and effective manner.8 While the new policy reiterates this encouragement, it goes further by providing clearer guidance and detailing the conditions under which companies may qualify for tangible benefits, such as reduced fines. This policy marks a significant step toward increased clarity in the Dutch enforcement landscape, offering companies a framework to navigate these complex decisions.
2. Fine Reduction for Self-Reporting and Cooperation
The DPPO policy introduces a potential fine reduction of up to 50%, divided equally between self-reporting and cooperation.
- Self-reporting: Legal entities that voluntarily and promptly self-report potential criminal offences may qualify for a 25% reduction, provided the disclosure is complete, timely, and presented in a clear, structured manner. To meet this standard, organizations must include all relevant evidence and disclose all known offences within their sphere, including the individuals and assets involved.
- Cooperation: An additional 25% reduction may be granted for full cooperation during investigations. Cooperation includes proactively providing evidence, ensuring employee availability for interviews, and preventing interference with evidence or witnesses. Companies must adopt a transparent approach, including making data accessible in a structured and searchable format, and facilitating access to third-party-held documents where necessary.
In that respect, it is important to note the limitations of the policy, in particular:
- Only Organizations Are Eligible: Fine reductions are explicitly limited to legal entities and do not extend to individuals involved in the misconduct.
- No Entitlement to Reduction: Self-reporting and cooperating organizations are not automatically entitled to a fine reduction. The decision lies entirely with the DPPO’s discretion, which is exercised on a case-by-case basis.
- Fine Reduction Is Not Binary: The DPPO may grant a partial fine reduction below the maximum threshold of 50% (or its components of 25% for self-reporting and 25% for cooperation).
Practical Considerations for Deciding Whether to Self-Report or Cooperate
Making the decision to self-report or cooperate with the DPPO is complex and highly strategic. Organizations should carefully evaluate various considerations to make an informed choice. Below are some practical considerations of relevance:
|
Legal and Compliance Factors
|
|
Risk of Delayed Reporting
|
|
Strategic Benefits of Cooperation
|
|
Broader Risk Assessments
|
|
Balancing Costs and Opportunities
|
By systematically analyzing such considerations, companies can adopt a practical, informed, and tailored approach to deciding whether to self-report and cooperate, ensuring alignment with their strategic objectives and risk tolerance.
3. The Role of Self-Investigation in Cooperation with the DPPO
The DPPO values self-investigations as a critical part of cooperation, promoting transparency and accountability. While they do not directly guarantee fine reductions, effective self-investigations may result in discounts of up to 25%.
Key principles for effective self-investigation:
- Truth-Telling: Provide meaningful insights and uncover key facts.
- Respect Victims: Uphold victims’ rights and address compensation claims.
- Integrity: Ensure independence, expertise, compliance and evidence transparency.
- Proactive Engagement: Share investigation scope, updates and findings with the DPPO.
- No Impediments: Avoid withholding evidence or interfering with justice.
A well-executed self-investigation demonstrates accountability and strengthens cooperation with the DPPO.
|
Strategic Benefits of Self-Investigation A properly executed self-investigation offers multiple advantages beyond potential fine reductions:
|
|
Practical Insights for Effective Self-Investigations Based on extensive experience, the following best practices can help companies maximize the benefits of self-investigations:
|
By systematically analyzing such considerations, companies can adopt a practical, informed, and tailored approach to deciding whether to self-report and cooperate, ensuring alignment with their strategic objectives and risk tolerance.
4. Exploratory discussion
The DPPO guidelines introduce an innovative feature: legal entities can now engage in exploratory discussions with the DPPO before committing to self-reporting or cooperation in a criminal investigation. These discussions allow organizations to assess their case without making binding commitments.
Key Features:
- Pre-Reporting and Pre-Cooperation Consultations: These consultations help legal entities determine whether their case might fall under the guidelines and understand the potential benefits of self-reporting or cooperating with enforcement authorities.
- Anonymity and Confidentiality: Consultations can be conducted anonymously, enabling companies to preserve confidentiality while gaining insight into how their case may be viewed. Information shared during these discussions cannot be used against the company if the guidelines are deemed inapplicable.
By formalizing what were previously informal consultations, the DPPO demonstrates a practical and transparent approach. This mechanism offers organizations a protected and practical way to explore their options, promoting transparency and collaboration with enforcement authorities while reducing uncertainties associated with corporate misconduct investigations.
5. Legal Privilege
The DPPO respects companies' right to claim privilege during self-reporting and cooperation in criminal investigations. However, the policy emphasizes:
- Justified Use of Privilege: While the right to privilege is acknowledged, excessive or unjustified claims may be viewed as non-cooperative.
- Risk to Cooperation Assessment: If privilege claims result in the company providing information that is insufficiently verifiable or too limited to support self-reporting or cooperation, the DPPO may conclude that the company has not met the cooperation requirement.
Key Considerations:
- Claims over contemporaneous legal advice (e.g. advice at the time of the misconduct, which may demonstrate knowledge or intent) could be scrutinized more closely.
- Claims over post-detection advice (e.g. legal exposure assessments or self-reporting strategies) are less likely to affect the perception of cooperation.
Ultimately, while companies have the right to privilege, they bear the risk if this undermines the verifiability or sufficiency of the information provided to the DPPO.
|
Practical Tips
|
Concluding remarks and takeaways
The DPPO's self-reporting and cooperation guidelines provide a valuable framework for companies seeking to mitigate potential criminal liability. By self-reporting and cooperating fully, organizations may secure significant reductions in fines and demonstrate a proactive approach to compliance. However, the policy leaves room for interpretation, with terms like "timely reporting" and "in the opinion of the DPPO" creating some ambiguity. Future updates to the policy may provide greater clarity and consistency in its application.
Additionally, the policy does not explicitly address the role of a company’s compliance program or its implementation as a mitigating factor. Key considerations such as disciplinary actions, remediation efforts and improvements to prevent recurrence are notably absent. Companies should remain mindful that these elements, though unaddressed in the policy, are often crucial to demonstrating a genuine commitment to ethical corporate behavior.
This lack of comprehensive guidance on compliance-related factors highlights the need for a holistic approach. Companies should align self-reporting and cooperation with broader efforts to establish and enforce robust compliance measures, emphasizing not just rectification of past misconduct but also prevention of future issues.
|
Key Takeaways
|
By adopting a strategic and comprehensive approach, companies can position themselves not only to benefit from the DPPO’s framework but also to strengthen their compliance culture and long-term resilience.
Footnotes
1
The U.S. Department of Justice (DOJ) has implemented clear guidelines through its Corporate Enforcement Policy, which offers incentives for voluntary self-disclosure, full cooperation, and timely remediation in Foreign Corrupt Practices Act (FCPA) cases and all other corporate criminal matters handled by the DOJ Criminal Division. Companies that meet these criteria may receive significant reductions in penalties or even declinations of prosecution. See DOJ Policy 9-47.120 Criminal Division Corporate Enforcement and Voluntary Self-Disclosure, https://www.justice.gov/criminal/criminal-fraud/file/1562831/dl, Section 1, 2 (last accessed 17 December 2024).
2
The UK Serious Fraud Office (SFO) encourages self-reporting and cooperation as part of its approach to Deferred Prosecution Agreements (DPAs). The DPA Code of Practice outlines how self-reporting and cooperation can be considered in resolving cases involving corporate misconduct. See DPA Code of Practice, Crime and Courts Act 2013, https://www.cps.gov.uk/sites/default/files/documents/publications/dpa_cop.pdf, paragraph 2.8.2(i) (last accessed 17 December 2024).
3
German authorities have increasingly formalized practices encouraging self-reporting and cooperation. Reforms to the Administrative Offences Act allow for reductions in penalties when companies demonstrate significant cooperation and implement effective compliance measures. The highest German Federal Court (BGH) ruled that fines for legal entities have to be reduced if they have implemented an effective compliance management system, also applying retroactively to the administrative offence. See BGH 1 StR 265/16, paragraph 118.
4
Canada introduced its Remediation Agreement Regime (modeled after DPAs) under the Criminal Code in 2018, which explicitly encourages voluntary disclosures and cooperation to resolve corporate crime cases, including foreign bribery, see the Criminal Code of Canada, Subsection 715.31(d). Voluntary disclosure of persons involved in the wrongdoing is explicitly mentioned as a factor to be considered to determine public interest of the remediation agreement, see the Criminal Code of Canada, Subsection 715.32(2)(f).
5
The French Anti-Corruption Agency (AFA) and the National Financial Prosecutor's Office (PNF) promote self-reporting and cooperation through France’s Convention Judiciaire d’Intérêt Public (CJIP), a French equivalent of a DPA. Companies that cooperate and self-report can negotiate agreements to resolve bribery and corruption cases. See Guidelines on the Implementation of the Judicial Public Interest Convention, Guidelines on the implementation of the CJIP_PNF_January 16 2023 VD.pdf, Section 2.1.3 (last accessed 17 December 2024).
6
The Australian Federal Police (AFP) and Commonwealth Director of Public Prosecutions (CDPP) provide guidance encouraging self-reporting in cases involving corporate bribery under Australia’s Deferred Prosecution Agreement Scheme. See AFP and CDPP Best Practice Guidelines on Self-Reporting of Foreign Bribery and Related Offences by Corporations, 20170812AFP-CDPP-Best-Practice-Guideline-on-self-reporting-of-foreign-bribery.pdf, pages 2, 3 (last accessed 17 December 2024).
7
OECD, Directorate for Financial and Enterprise Affairs Working Group on Bribery in International Business Transactions, https://one.oecd.org/document/DAF/WGB(2023)55/FINAL/en/pdf, page 4, Text of Recommendation 3 (last accessed 17 December 2024).
8
Parliamentary Paper: Letter to Parliament with Policy Response to Report on Self-Investigation and Self-Reporting of Fraud and Corruption by Companies, https://open.overheid.nl/documenten/dpc-79e9f10b2a3a08bb9cea29837e57361459b0856e/pdf, page 2 (last accessed 17 December 2024).
Head of Investigations, Amsterdam
Email
sharon.oded@nortonrosefulbright.com
Recent publications
Publication
New decree amending the list that sets forth goods whose import and export are subject to regulation by the Ministry of Energy
On September 18, 2024, the "Decree amending the list that sets forth goods whose import and export are subject to regulation by the Ministry of Energy" (the "Decree") was published in the Federal Official Gazette.
Publication
New decree amending the list that sets forth goods whose import and export are subject to regulation by the Ministry of Energy
On September 18, 2024, the "Decree amending the list that sets forth goods whose import and export are subject to regulation by the Ministry of Energy" (the "Decree") was published in the Federal Official Gazette.
Subscribe and stay up to date with the latest legal news, information and events . . .