Ban on investment in cluster munitions
The ban is an extension of the Convention on Cluster Munitions, to which the Netherlands is a signatory. The Convention implements the far-reaching ban on the use, possession, production and transfer of cluster munitions. The parties to the Convention have undertaken to adopt appropriate national executive measures to implement the Convention. The ban is included in Section 21a of the Market Abuse (Financial Supervision Act) Decree (Besluit Marktmisbruik Wft). The AFM is responsible for supervision of compliance with the ban.
What does the ban mean?
The ban on investment applies to companies that produce, sell or distribute cluster munitions, or essential parts thereof. A financial enterprise established in the Netherlands must take adequate measures to ensure that it does not execute transactions or have transactions executed on its behalf in, provide loans to, or acquire not freely marketable participating interests in these companies. Existing holdings must be sold or otherwise disposed of within a reasonable time.
Who is subject to the ban?
What are the exceptions?
- It is permitted to execute transactions based on an index, but only if individual companies falling under the investment ban account for less than five per cent of the index concerned.
- The ban moreover does not apply to transactions in collective investment schemes managed by third parties if individual companies falling under the investment ban account for less than five per cent of the investments of the scheme.
- Investment may also be made in specifically described projects of a company falling under the ban, as long as the funds will not be used for the production, sale or distribution of cluster munitions.