Administrative fine under the Wft, Pw, Wtt, Wwft and Sw

What is an administrative fine?

An administrative fine is an unconditional obligation to pay a sum of money. It is a punitive sanction, imposed with the intention of punishing offenders. Administrative fines may be imposed only for established instances of non-compliance. The General Administrative Law Act (Algemene wet bestuursrecht – Awb) defines the term “non-compliance” as any conduct violating the provisions under or pursuant to any statutory requirement. This conduct may involve both acts and omissions.

Our power to impose an administrative fine for an established instance of non-compliance with any of the Acts listed or the ensuing rules or regulations is laid down in:

• Section 1:80 of the Wft
• Section 176 of the Pw
• Section 171 of the Wvb
• Section 48 of the Wtt
• Section 30 of the Wwft, and
• Section 10d of the Sw

Pursuant to the Awb, the power to impose an administrative fine lapses five years after the relevant instance of non-compliance.

On whom may an administrative fine be imposed?

A fine may be imposed on the party failing to comply with a statutory requirement (the offender). The Awb defines the term “offender” as the party committing an offence or co-perpetrator of the offence; an offender can be a natural person or a legal entity. We are authorised to impose fines not only on legal entities, but also on natural persons in their capacity as an institution’s de facto directors. For a fine to be imposed on a de facto director, it must be established that the legal entity has committed an offence.

We have prepared a Q&A on fining a de facto director. See this Q&A for more information on this topic.

Lastly, we may impose a fine on parties who are co-perpetrators to an offence. To ascertain whether the acts of a natural person or legal entity may be regarded as constituting the co-commission of an offence, the case law which has evolved on this topic within criminal law must be considered. An offence is co-committed if two or more natural persons or legal entities jointly violate the law, cooperating closely and deliberately and committing the offence collectively.

Amount of the administrative fine

An instance of non-compliance with financial supervision legislation falls into one of three categories, depending on the gravity of the non-compliance. The categories are laid down in:

• Section 1:81 of the Wft
• Section 179 of the Pw
• Section 174 of the Wvb
• Section 49 of the Wtt
• Section 31 of the Wwft, and
• Section 10e of the Sw

The financial supervision legislation referred to above and the Decree on Administrative Fines in the Financial Sector (Besluit bestuurlijke boetes financiële sector – Bbbfs) set out how the amount of an administrative fine must be calculated. Offences against the Pw, Wvb and Sw by pension funds¹ and occupational pension funds² are further elaborated in the Decree implementing the Pensions Act and the Mandatory Occupational Pension Scheme Act (Besluit uitvoering Pensioenwet en Wet verplichte beroepspensioenregeling – BuP).

Category 1 involves less serious, often common instances of non-compliance. This category carries a fixed fine of €10,000.

A flexible system is used for the graver instances of non-compliance included in categories 2 and 3, allowing the imposition of administrative fines proportionate to the gravity and duration of the non-compliance and the degree to which blame can be attributed to the non-compliant party.

• Category 2 covers offences including failure to meet expertise and integrity requirements.
• Category 3 covers the gravest offences, including performing activities subject to a licence requirement without a licence.

Each category has a base amount, minimum amount and maximum amount, which are set out in the table below:

The guidance set out in the Bbbfs and the BuP provides that the base amount for categories 2 and 3 may be adjusted upwards or downwards if the gravity or duration of the non-compliance or the degree of culpability of the non-compliant party justifies an increase or decrease. The maximum adjustment in both categories is 50%. Administrative fines in all categories are doubled upon in the case of recidivism,

i.e. if an instance of non-compliance occurs within a period of five years after an administrative fine was imposed on the non-compliant party for the same offence. The supervisory authority must allow for the non-compliant party's financial capacity in calculating the amount of an administrative fine. In the event of financial incapacity, the fine may be reduced by up to 100%.

We base the amount of a fine on the DNB General fine calculation policy (Algemeen boetetoemetingsbeleid DNB, available in Dutch only).

Procedure

If we intend to impose an administrative fine, we will notify the relevant natural person or legal entity of our intention in writing, explaining for what instance of non-compliance the fine may be imposed. A report detailing the established non-compliance is attached to the letter.

The party involved is given the opportunity to state its views orally, in writing, or both. Prior to an oral presentation of views, the party concerned is informed that they are not under a duty to answer any questions. Taking the party's statement of views, if any, into consideration, we decide whether or not to impose an administrative fine and what the amount of the fine will be.

An objection against a decision to impose an administrative fine may be lodged within six weeks of the date on which the decision is disclosed. Objections may be lodged online via or by regular mail. If an objection is lodged, we will review our decision.

If we dismiss an objection, an appeal may be brought before the Rotterdam District Court. Rulings of the Rotterdam District Court may be appealed before the Trade and Industry Appeals Tribunal (College van Beroep voor het bedrijfsleven – CBb).

As a rule, a decision to impose a fine will be suspended for the duration of the objection and appeal proceedings, i.e. fines need not be paid until the decision to impose a fine becomes irrevocable.

Disclosure

Disclosure under the Wft, Wwft, and Wtt

We are required by law to disclose decisions to impose an administrative fine due to non-compliance with the Wft, Wwft and/or Wtt once the relevant decision is irrevocable. We also disclose the outcome of any objection or appeal preceding the decision.

In addition, we are required to disclose decisions to impose a fine for specific grave instances of non-compliance as soon as practicable after notifying the party involved, i.e. before the fining decision becomes irrevocable. This is referred to as “early disclosure”. These serious offences are, in the case of the Wft:

• non-compliance with a statutory provision included in fine category 3, e.g. non-compliance with a prohibition or market access provision;
• non-compliance with a statutory provision included in fine category 2, if the provision in question has specifically been included in a general administrative order.

In the case of the Wwft and the Wtt, serious offences involve non-compliance with a provision falling under fine category 3.

Disclosure of the decision to impose a fine will be withheld if disclosure would jeopardise the stability of the financial system.

We may postpone the disclosure of the decision or disclose it in anonymised form if we establish beforehand that full disclosure is likely to have any of the following consequences:

• disclosure of the personal details of the natural person on whom the administrative fine is imposed would be disproportionate to their act of non-compliance;
• disclosure would cause disproportionate detriment to the parties involved;
• disclosure would undermine an ongoing criminal investigation, or an examination held by the supervisory authority; or
• disclosure would jeopardise the stability of the financial system.

Disclosure under the Pw and Wvb

We are required by law to disclose decisions to impose an administrative fine in connection with non-compliance with the Pw or the Wvb once the relevant decision is irrevocable. We also disclose the outcome of any objection or appeal preceding the decision.

Disclosure of the decision to impose a fine will be withheld if disclosure would jeopardise the stability of the financial system.

We will postpone a decision to impose a fine or disclose it in anonymised form if:

• disclosure of the identity of the legal person, or of the identity or personal data of a natural person, is considered disproportionate
• disclosure would jeopardise the stability of financial markets
• disclosure would undermine an ongoing criminal investigation, or an examination conducted by the supervisory authority

Decisions to impose an administrative fine are disclosed at least five business days after the date on which the disclosure decision was notified to the party involved. If, in the course of this waiting period, the court is requested to grant injunctive relief, the disclosure will be suspended until the court in preliminary relief proceedings has issued a ruling. Only in urgent cases may we disclose an administrative fine immediately without observing the five-day waiting period.

Concurrence of administrative fine and criminal law

For instances of non-compliance constituting an economic offence that is liable to punishment under the Economic Offences Act (Wet op de economische delicten – Wed), we may impose an administrative fine or the Public Prosecution Service may decide to prosecute. As no offence may be penalised more than once, we engage in tripartite consultations with the Fiscal Intelligence and Investigation Service (Fiscale Inlichtingen- en Opsporingsdienst – FIOD) and the Public Prosecution Service to decide whether an offence is to be penalised under administrative or criminal law. These consultations are based on the Covenant on the avoidance of unlawful concurrence of administrative and criminal-law sanctions (Convenant ter voorkoming van ongeoorloofde samenloop van bestuurlijke en strafrechtelijke sancties).

[1] pension funds as defined in Section 1 of the Pw.
[2] occupational pension funds as defined in Section 1 of the Wvb.
[3] For the performance of binding EU legal acts, this maximum may be set at up to €2,500,000.
[4] For the performance of binding EU legal acts, it may be stipulated by general order in council that specific offences carrying a category 2 fine are liable to a fine of up to 5% of the net turnover for the preceding financial year if that sum should exceed twice the applicable maximum amounts specified above.
[5] For the performance of binding EU legal acts, this maximum may be set at up to €10 million, €15 million or €20 million. In that event, the base amount is set at half the maximum amount for the offence in question.
[6] The maximum administrative fine for offences carrying a category 3 fine is equal to 10% of the net turnover for the preceding year. For the performance of binding EU legal acts, this percentage may be increased to 15% by general administrative order.
[7] For Wft purposes, the amount of the administrative fine is capped at three times the amount of the gain that the non-compliant institution obtained on account of its non-compliance. For Wtt purposes, the amount of the administrative fine is capped at twice the amount of the gain that the non-compliant institution obtained on account of its non-compliance.
[8] For Pw, Wtt, Wwft and Sw purposes, the amount of the administrative fine is capped at twice the amount of the gain that the non-compliant institution obtained on account of its non-compliance if this gain exceeds €2 million.
[9] If the fine is imposed on the basis of non-compliance with the Wwft, the maximum in certain cases (referred to in the Wwft) is no more than 20% of the net turnover in the previous year, if this is more than twice the applicable maximum amount.