The Public Prosecution Service is transparent for the first time about concrete benefits of self-reporting and cooperation in criminal investigations

This settlement is the first in which the DPPS is more transparent about the concrete benefits of self-reporting and cooperating with the criminal investigation. In previous mega settlements, such as those with SBM Offshore, Vimpelcom, Telia Company AB en ING Bank, the DPPS made it known that (if there was any) self-reporting and cooperating with the criminal investigation was included in the amount of the fine, but there was a lack of concrete figures/percentages. The call for transparency in such settlements became ever greater (see also this earlier article (in Dutch) by Mitchell Paardekooper and me). In the recent settlement with the SHV subsidiaries, the DPPS (to some extent) complied with this.

The DPPS also meets the recommendations of the OECD Working Group on Bribery in International Business Transactions (the Working Group) in the Phase 4 evaluation report (5 November 2020) by providing this bit of transparency. In this report, the Working Group noted that the Netherlands has no legal framework or prosecution guidelines with regard to self-reporting. This makes it difficult for public prosecutors to determine how they should include self-reporting by companies in their decision to settle a case out of court, to prosecute it and whether (to what extent) they should consider self-reporting as a punitive circumstance. In addition, the Working Group noted that there seems to be a general reluctance among companies to register themselves, given the uncertainty about the consequences and the lack of an overarching legal framework.

Although concrete prosecution guidelines with regard to self-reporting are not yet available (at least they are not known to the public), the DPPS has stated in the above-mentioned settlement that self-reporting and cooperating in the criminal investigation can apparently result in a 25% discount (per criterion) on the fine. With regard to self-reporting, it is important that the DPPS was not aware of anything at the time of the report, public prosecutor Tessa van Roomen confirmed in an interview with NRC. She adds that if the SHV subsidiaries had come forward after the start of an investigation, they would not have received any discount. So it seems, all or nothing, or, 25% or nothing. This also appears to be in line with the US FCPA Corporate Enforcement Policy, according to which a company can receive a 50% discount if there is a voluntary self-report, full cooperation and timely and appropriate remedial action. If there is no voluntary self-report, but the other criteria are met, a company can still receive a maximum of 25% discount. Since the DPPS has given the SHV subsidiaries a 25% discount for cooperating - also to those who have not received a 25% discount for self-reporting - this discount seems to stand on its own. However, it remains uncertain what kind of discounts other companies can or will receive, as there is as yet no concrete policy - in writing and accessible to the public.

What is also striking about the settlement with the SHV subsidiaries is that the DPPS stated in the press release that it is of the opinion that there is sufficient evidence with regard to a number of natural persons to prosecute those persons. With this approach, the DPPS seems to take to heart the recent criticism of the Working Group that the DPPS mainly enforces against legal persons and that the number of cases against natural persons remains low.

The bit of transparency in the settlement with the SHV subsidiaries is a small step in the right direction. By October 2022, the Netherlands must report to the Working Group on the implementation of all recommendations included in the Phase 4 evaluation report. If the Netherlands wants to pass the test well, significant steps will have to be taken in the short term. My recommendation, in line with the OECD recommendations, remains that a clearly written policy should be published that explicitly states what kind of concrete benefits a company can obtain if it (i) reports itself in a timely manner after detecting irregularities, (ii) (if applicable) shares findings from an internal investigation with the authorities, (iii) cooperates fully with the criminal investigation, (iv) implements an effective compliance policy and / or (v) appoints an (external) monitor for a certain period of time.