This newsletter covers export controls and sanctions related legislation, jurisprudence, and other publications of the Dutch government, the Dutch courts and other Dutch organisations, published during the second quarter of 2020 (April, May & June). News updates that are discussed in previous BenninkAmar-newsletters will not be discussed again in this newsletter.[1]
1. (Upcoming) Legislation
On 2 June 2020, the Dutch Minister of Economic Affairs & Climate Policy, Eric Wiebes, informed the Dutch Senate about an upcoming bill regarding an investment assessment of risks to the national security because of (foreign) takeovers of – and investments in – Dutch companies. Wiebes states that the bill will contain the reference date (“peildatum”) of 2 June 2020. The inclusion of the reference date 2 June 2020 in the future bill, means that after the entry into force of this bill, acquisitions and investments made before this date can be retroactively tested if there is reason to do so for the protection of the Dutch national security. The scope of application of this legal assessment framework is twofold:
- Providers of vital processes and vital infrastructure, and
- “Companies who are active in the field of high-quality sensitive technology”.
Regarding the latter, starting point for these companies, are the pre-existing multilateral exports control frameworks for the export and transfer of strategic goods (military or dual-use goods). Acquisitions and investments in companies operating in the field of high-quality sensitive technology (and thus subject under the export control regime) will be tested for risks to national security. According to Wiebes, the criteria for this assessment will be highly comparable to the assessment criteria as included in the (proposed) Dutch Bill on Undesirable Control of Telecommunications (“Wetsvoorstel Ongewenste Zeggenschap Telecommunicatie”). On 12 June 2020 the Act on undesired control in telecommunications (“Wet ongewenste zeggenschap telecommunicatie”) was published in the Dutch Official Gazette (Staatsblad 2020, 165).
2. Jurisprudence / Case Law by Dutch Courts (and a Belgium Court)
On 19 May 2020, the Dutch Supreme Court ruled in a case regarding the definition of the term “bringing in” (“doen binnenkomen”). According to the Supreme Court, “bringing in”, can also be interpreted as having a good transported from abroad to a destination in the Netherlands. On 29 June 2020, website BijzonderStrafrecht.nl, a Dutch site for special criminal law, published an article, about the judgment of the Belgium court of appeal, in Antwerp. According to BijzonderStrafrecht.nl, a Rotterdam company is prosecuted for exporting chemicals to Syria. On 29 June 2020, the Court of Appeal of Amsterdam ruled in case regarding the export and sales of certain goods to an Iranian person / entity without prior authorization. In this case the court interpreted the term “export”.
3. Publications by Dutch Government and House of Representatives
A. Sanctions that Hinder the Fight against Coronavirus
On 16 April 2020, the Dutch Foreign Trade & Development, Sigrid Kaag, answered parliamentary questions of a member of the Dutch House of Representatives regarding the possibility that international sanctions can hinder the fight against the Coronavirus.
B. Dutch Arms Exports
On 17 April 2020, the Dutch Minister for Foreign Affairs, Stef Blok, sent a letter to the Speaker of the Dutch House of Representatives regarding the foreign and security strategy of the Netherlands. In this letter Blok, states that the Netherlands pursues a strict arms export policy. The policy regarding Saudi Arabia, the United Arab Emirates (“UAE”) and Turkey were tightened because of the on-going war in Yemen and the Turkish invasion in Syria. The Netherlands also called for other countries of the European Union (“EU”) to adopt a restrictive approach with regard to their arms export policies. Dutch proposals for further EU arms export harmonization received insufficient support during the Review of the EU Common Position on arms exports. According to Bloks letter, more than 90 % of the applications for Dutch arms export licenses were submitted within the eight-week period has been completed.
C. Import of Weapons
Several days later – on 20 April 2020 – the Dutch Minister of Defence, Ank Bijleveld, answered parliamentary questions of a member of the Dutch House of Representatives about weapon imports. Bijleveld says that imports of weapons to the Netherlands are only checked with a view to the security of the Netherlands. This is done on the basis of the Weapons and Ammunition Act. In addition, sanctions can place restrictions on the import of goods from certain countries. Within the legal framework, companies must set up their own chain of (foreign) suppliers. When importing into the Netherlands, Bijleveld says that it is less obvious, to check for the end use (in the Netherlands). Bijleveld distinguishes three kinds of weapon imports:
- Imports for the Dutch armed forces;
- Imports intended for Dutch companies; and
- Imports intended for private end users (for example, the use of shotguns is otherwise regulated in the Netherlands).
When the imported good are integrated into a (new) end product, and are exported out of the Netherlands again, these goods will be subject to export control. In these cases, the relevant Dutch authority will check for the risk of unwanted end use.
D. Possible Exemption for Nord Stream 2 to (EU) Gas Directive
On 4 June 2020, the Dutch Minister of Foreign Affairs, Stef Blok, and the Minister of Economic Affairs & Climate Policy, Eric Wiebes, answered parliamentary questions regarding the possible exemption for Nord Stream 2 to the (EU) Gas Directive.
E. China, Cyber-Surveillance Technology & Export Controls
On 16 June 2020, the Dutch Minister of Foreign Affairs, Stef Blok, answered parliamentary questions regarding the human right policy with regard to China. The Netherlands supports the expansion of export controls on cyber-surveillance technology in relation to Chinese human rights violations and is making international efforts to bring cyber-surveillance goods in relation to human rights violations under export control. According to the minister, the Netherlands is committed to include cyber surveillance technology in the revision of the EU dual-use regulation (Parliamentary Papers II 2019/2020, 35207, nr. 32, pp. 18-19). Minister Blok is not in favour of restrictive trade measures against China. Imposing trade restrictions may lead to a negative spiral of successive retaliation, Blok says (Parliamentary Papers II 2019/2020, 35207, nr. 32, pp. 18-19).
F. Bypassing International Sanctions or (Arms) Embargoes
On 18 June 2020, a parliamentary paper of the Dutch House of Representatives was published regarding an amendment of the Dutch Civil Code to broaden the possibilities of prohibiting certain legal entities. In this “Nota naar aanleiding van het verslag” the Dutch Minister for Legal Protection, Sander Dekker, explains that bypassing international sanctions or (arms) embargoes by the EU or United Nations (“UN”) are considered to be a threat to the international legal order.
G. Ultimate Beneficial Owners / Controlling Persons / Interested Parties
On 23 June 2020, the Dutch Senate voted on a bill regarding the registration of ultimate beneficial owners / controlling persons / interested parties (“uiteindelijke belanghebbende”) of companies and other legal entities. According to the explanatory memorandum (“memorie van toelichting”), these include, amongst others, companies that are obligated to investigate interested parties (“belanghebbenden”) under the Dutch Sanctions Act 1977 (Parliamentary Papers II 2018/2029, 35179, nr. 3, p. 16). On 23 June 2020, the bill was adopted by a majority of the Dutch Senate.
4. Approval & Rejection of Export Licenses for Strategic Goods
On 5 June 2020, three members of the Dutch House of Representatives asked parliamentary questions to the Dutch Minister of Foreign Affairs and Foreign Trade & Development, Sigrid Kaag, regarding the transit of 10 million cartridges for bullets to Turkey. On 12 June 2020, Kaag sent a letter to the Speaker of the Dutch House of Representatives, regarding an approved export license for military goods to Indonesia. On 24 June 2020, a historic overview was published with all rejected export license applications for military goods, in the Netherlands. The overview contains 214 rejected licences, from 2004 until 2018. The three countries with the most denied export licenses are Israel, Saudi Arabia and the UAE.
5. Annual Reports 2019
In April 2020 and June 2020, the Dutch Military Intelligence & Security Service (“MIVD”) and the Dutch Customs, published their annual reports (see BenninkAmar Newsletter d.d. 19 June 2020). In the second quarter of 2020, also the annual reports of the AIVD (the General Intelligence & Security Service of the Netherlands) (29 April 2020), the Ministry of the Interior & Kingdom Relations (20 May 2020), and the Ministry of Foreign Affairs (20 May 2020), were published. Just like in the annual reports of the MIVD and the Dutch Customs, in these reports export control and/or sanction related matters, are being discussed. On 16 June 2020, the Dutch Ministry of Finance published the annual report about the management of Dutch state holdings. In this report, the Ministry of Finance gives a preview of upcoming plans, such as a plan of Gasunie, who (together with partners) wants to develop a terminal for liquefied natural gas (“LNG”) in Northern Germany. Gasunie wants to use this LNG-terminal to import gas from all over the world, as an alternative to Norwegian and Russian gas (Annual Report “Beheer Staatsdeelnemingen 2019”, p. 69). On 18 June 2020, the annual report of the Coastguard for the Kingdom of the Netherlands in the Caribbean (“Coastguard”). In this annual report, the Coastguard refers to its Judicial Policy Plan 2018-2021, which contains four policy spearheads, the first being “the transportation of narcotics and strategic goods”.
6. Departmental Action Programs for Better Regulation & Business Services (June 2020)
On 25 June 2020, the Dutch government published an overview of departmental action programs for better regulation and business services. This report contains an overview per department of the measures for better regulation and service provision for companies and the 2020-state of affairs. One of the topics discussed in this report, is the optimization of container scans, by the Dutch Customs. Recently, the posting of container scans at sites for container terminals, was completed. It is no longer required that containers are removed from the logistics chain. The containers can be scanned in the logistics chain. According to the report, this produces substantial cost savings and efficiency increases for logistics partners. Above all, it increases the predictability of customs controls and thereby significantly increases the predictability of the organizations and businesses involved in the logistics chain. Predictability is one important precondition for businesses. The “advance declaration” (“vooraf-aangifte”) was implemented in the Dutch customs process. Where customs declarations are normally filed as soon as the goods are brought in, the new facility allows businesses to fill out the necessary documentation in advance, before the arrival of the goods. So-called “reliable entrepeneurs” (“betrouwbare ondernemers”), are informed in advance by the Dutch Customs, if their goods are checked on arrival.
7. Questions?
Should you wish to receive more information about one of the topics described in this newsletter, such as the (logistical) advantages for (Dutch) companies, who are considered to be a “reliable entrepreneur” (“betrouwbare ondernemer”), by the Dutch Customs, please contact BenninkAmar Advocaten at: info@batradelaw.com or via telephone at: +31203085918.
[1] Items, such as the ruling of the Dutch Supreme Court (d.d. 21 April 2020) in a case about the transit of military goods without an export license (see BenninkAmar, Newsletter, 25 May 2020).