Administrative fines and publication

When the AFM considers the imposition of an administrative fine, it follows a process involving various steps. In outline, this process is as follows:

Transfer of the case file

When a supervisory department establishes that an offence has been committed, and it takes the view that a fine is appropriate, it prepares an investigation report and passes the case to the fine officer of the AFM. If appropriate to the case in question, it may be that the supervisory department has first submitted a draft of its investigation report to the party under investigation. The fine officer is also sent the case file assembled by the supervisors (the ‘documents relating to the case’). The case is then taken over by the fine officer (see below under ‘Segregation of duties’).

Notice of intention to impose a fine

The fine officer sends a notice of intention to impose a fine to the offender (or the de facto manager), together with the investigation report prepared by the supervisors. The notice states the offence for which we may wish to impose a fine, how the amount of the fine will be determined and how we will publish the imposition of the fine, if it is imposed. The recipient of the notice will be sent the case file on request, and we will give them the opportunity to submit a statement of their opinion with respect to the notice.

Statement of opinion

The recipient of a notice of intention may respond to the proposed fine (and its publication) by submitting a statement of their opinion, either orally or in writing. They may, for example, discuss the evidence, put forward arguments against imposition of a (high) fine or its publication, or offer qualification of the conclusions reached in the investigation report. Submission of a statement of opinion is not mandatory, and in case of an oral submission, the fine officer will always caution the person in question.

We apply certain time limits for the submission of a statement of opinion. See below under the heading ‘Time limits for submission of a statement of opinion’.

Option for simplified settlement

We may offer a party the option of a simplified settlement of a case involving a fine. For further details, see the heading ‘Simplified settlement’.

Recommendation to the Executive Board

The fine officer will submit a recommendation to the AFM Executive Board as to whether an administrative fine should be imposed, the amount of the fine and whether (and how) the fine should be published. In their recommendation, the fine officer will include the investigation report, the underlying case file and the statement of opinion from the party concerned.

Decision and dispatch

The AFM Executive Board can decide whether a fine will be imposed or not. If its decision is to impose a fine, the Board will also decide on the amount of the fine and its publication. In either case, the fine officer signs the decision and informs the party concerned.

Follow-up

In many cases, we are obliged to publish a decision to impose a fine. For more information, see the heading ‘Publication of administrative fine decisions’. Interested parties may employ various legal remedies to object to the fine and/or publication of the decision to impose it. See also under the heading ‘Legal protection’.

When imposing administrative fines, the AFM applies a segregation of duties, which, in brief, means that the persons involved in the preparation of an investigation report are not involved in the fine imposition process. This applies to both the process for the primary decision (the decision whether to impose an administrative fine or not) and any decision regarding an objection. In the primary phase, the employees concerned with the fine imposition process are those who are specifically assigned this task. These are the fine officer, one or more deputy fine officers and assistant fine officers (collectively, the Administrative Fines Team). This segregation of duties does not mean that the Administrative Fines Team will have no contact with the supervisors who carried out the investigation. Contact is permitted, as this may benefit the quality of the decision. The Administrative Fines Team is the party with authority at all times.

The decision-making process essentially involves the following steps:
• The Administrative Fines Team receives an investigation report from the supervision division concerned, which states that one or more legal entities or natural persons have committed one or more finable offences or have provided de facto management with respect to the offence(s) concerned. The report will request the Administrative Fines Team to advise the AFM Executive Board regarding the imposition of a fine.
• The following assumes a single fine imposed on a single legal entity or natural person, who is referred to as ‘the concerned party’.
• The Administrative Fines Team sends the concerned party a notice of intention to impose an administrative fine, offering the concerned party the opportunity to submit a statement of opinion (either orally or in writing). The concerned party may also request the underlying case file from the AFM.
• The Administrative Fines Team organises the meeting for the statement of opinion (if applicable).
• After receiving the statement of opinion, the Administrative Fines Team assesses the case on the basis of the investigation report, the underlying case file and the statement of opinion. This assessment leads to a recommendation to the AFM Executive Board. If imposition of an administrative fine is recommended, the recommendation will include a draft decision to impose a fine, among other things.
• The AFM Executive Board decides whether a fine will be imposed or not, and if the decision is to impose a fine, it decides on the amount of the fine and whether and how its decision will be published.
• The Administrative Fines Team signs the decision (whether an administrative fine is to be imposed or not) and dispatches it.

The AFM applies the following terms for submission of a statement of opinion.

1. Term for submission of a statement of opinion with respect to the notice of intention to impose an administrative fine

In its notice of intention to impose an administrative fine, the AFM allows the concerned party a term of six weeks to submit a statement of opinion, either orally or in writing.

2. Extension of the term

2.1 Assessment criteria

The AFM allows an extension of this term only if the concerned party provides reasonable grounds that a term of six weeks would be unreasonably short given the specific circumstances of the case. The factors that may be involved here are:
• the legal and/or actual complexity of the case;
• the extent to which, at the time of receipt of the notice of intention to impose an administrative fine, the concerned party is already aware or may be considered to be aware of the accusations made against them in the investigation report; and
• any translation-related issues in case the concerned party has no command of the Dutch language.

2.2 Duration of the extension

If the AFM allows an extension of the term, this will be for a period of not more than four weeks.

3. Setting of the date for a meeting to submit a statement of opinion

If the person concerned wishes to submit their statement of opinion orally (possibly in addition to in writing), the AFM will set the meeting for submission of the statement of opinion at a date within the possibly extended term that the AFM has granted for the submission of a statement of opinion. As far as reasonably possible, the AFM will take account of any dates on which the concerned party and/or any authorised representative(s) are unable to attend.

4. Exceptional circumstances

The AFM may deviate from this regulation in case of exceptional circumstances that give reason to do so.

The Dutch General Administrative Law Act (Algemene wet bestuursrecht) states a non-binding term of 13 weeks from the date of the investigation report for the decision of whether to impose an administrative fine or not. In practice, the term between the completion of the investigation reports and the AFM’s decision is often longer than this. Especially in more complicated cases, it is necessary firstly to give the parties the opportunity to submit their opinion and then to carry out the necessary careful assessment and consideration of the interests involved.

The various supervisory legislation and underlying regulation set various maximum amounts for administrative fines, with associated base amounts and factors that have to be taken into account in setting the amount of the fine. The AFM has a policy for setting fines to ensure consistency in how appropriate fines are imposed in individual cases.

The current policy is the AFM Fine-Setting Policy 2021, with attached Notes. This policy was revised on 1 July 2021. Due to the applicable transition arrangement, some offences may be subject to the previous fine-setting policy, the AFM Fine-Setting Policy 2015.

The policy and attached notes give a detailed explanation of the relevant circumstances when setting the amount of a fine. The essence of the policy is a plan consisting of seven steps, to come from the statutory base amount to the final amount to be imposed in a specific case.

The policy applies to both legal entities and natural persons and applies to all supervisory legislation, with the exception of the Consumer Protection (Enforcement) Act (Wet handhaving consumentenbescherming, see paragraph 2 of the notes).

Payment of the fine and statutory interest

Under the General Administrative Law Act, a fine must be paid within six weeks of the effective date of the decision. If an offender fails to pay the fine within this period, statutory interest will be due. A different arrangement applies to many of the fines that we impose. The obligation to pay the fine is suspended while an objection or appeal is pending. The calculation of statutory interest, however, is not suspended. If, after an objection or appeal, the fine remains fully or partially due, statutory interest will be payable by the party subject to the fine over the entire period from six weeks after the decision to impose the fine. Conversely, we will be liable for statutory interest to the party subject to the fine if the fine is paid but is revoked fully or partially on objection or (higher) appeal. This interest will in all cases concern the statutory interest for ‘non-commercial transactions’.

Proceeds from administrative fines and orders for incremental penalty payments

Subject to a limit of €4.5 million, the proceeds from fines and incremental penalty payments are retained by the AFM. This money is eventually returned to the sector, as it is offset against the costs of enforcement. Proceeds in excess of €4.5 million revert to the Government.

Under financial legislation and regulation, in most cases, the AFM is in principle obliged to fully publish decisions to impose an administrative fine. Publication serves several purposes, including information for and warning to market parties, general and specific prevention, and the provision of information on how we exercise our enforcement. The publication of the imposition of a fine is therefore, unlike the fine itself, not punitive (and is not intended as such).

Publication in anonymous form, deferral or omission of publication is only possible if one of the grounds explicitly stated in the relevant supervisory legislation applies, for instance, if full publication could cause disproportionate harm to one or more of the parties involved.

Publication usually takes place once the decision to impose an administrative fine has become irrevocable. In some cases, however, we are obliged in principle to publish an administrative fine decision immediately (early publication). If we decide that this is necessary, the party subject to the fine may request the temporary relief judge to suspend publication. For further details, see under ‘Legal protection’.

De facto managers

If an offence is committed by a legal entity, the AFM may fine the legal entity itself as the offender. In addition, or alternatively, we may also fine one or more persons exercising de facto management with respect to the offence by the legal entity. This may, for instance, concern the directors of a company. De facto management may be active (direction of the prohibited conduct) or more passive (involving awareness of the prohibited conduct and having the authority and obligation to act against the offence, but failing to do so). Both natural persons and legal entities can be fined as de facto managers (for example, a parent company exercising de facto management with respect to an offence committed by a subsidiary). In 2016, the Supreme Court issued a clarification ruling (ECLI:NL:HR:2016:733) stating the conditions for de facto management to apply.

The Enforcement policy of the AFM and DNB summarises the situations in which we may impose a fine on a de facto manager.

Co-offenders

An offender is defined as a person who commits an offence or is a co-offender in the offence (see Section 5:1 of the General Administrative Law Act). We may therefore impose a fine on a co-offender in an offence. Co-offending applies if two or more legal entities or natural persons collectively (‘in intentional and close cooperation’) commit an offence. In this case, not all the components of the offence committed have to be completed by each of the co-offenders concerned.

The AFM may apply simplified settlement to cases involving fines. Once a decision to impose an administrative fine is made (the primary decision), the case is then closed in a manner that is efficient for both the AFM and the offender.

The Procedure for simplified settlement in cases involving fines by the AFM explains how this works in practice. Briefly, in a simplified settlement, we agree with the concerned party that the concerned party acknowledges the offence we have established in the investigation report and accepts the fine (in other words, the party waives their right to object or appeal). In this case, we reduce the fine by 15%, and an abridged administrative fine decision (in which we set out the facts and our assessment in general terms only) will be sufficient.

It is for the AFM to decide whether to offer the offender the option of a simplified settlement. There is no entitlement to simplified settlement. We take this initiative only if we expect it to provide worthwhile efficiency benefits.

Objection and appeal

Interested parties may object to the AFM’s imposition of an administrative fine. In this case, we will reconsider our decision to impose the fine. The administrative fine decision explains when and how an interested party may submit an objection. If the interested party does not agree with the result of this reassessment (as stated in a decision on objection), they may file an appeal with the District Court of Rotterdam and subsequently (if applicable) submit a higher appeal to the Trade and Industry Appeals Tribunal (College van Beroep voor het bedrijfsleven, or CBb).

If we have decided to publish our decision to impose an administrative fine, the interested party may also object to this and submit a (higher) appeal against publication. The proceedings on publication and the administrative fine itself may run concurrently in practice.

Provisional ruling

In some cases, the AFM is obliged in principle to publish a decision to impose an administrative fine immediately, even if an objection against that decision has been submitted. If we decide to publish in such a case, the interested party may request a provisional ruling from the temporary relief judge at the District Court of Rotterdam on a request for suspension of publication. In our administrative fine decision, we allow a term of five business days for a request to the temporary relief judge and will suspend publication while proceedings before the temporary relief judge are ongoing. In addition, there are also some other cases in which a person concerned may request temporary relief, for instance for suspension of publication of an administrative fine decision that has already become irrevocable.

More general information on objections and appeals.