#10: Fired by the Criminal Court
As discussed in lawlunch #06 the Dutch authorities try to fight fraud by prosecuting the professionals – the facilitators of the crime – involved. Practice shows that (tax) advisors, accountants and notaries are increasingly put in the spotlight of a criminal investigation. As explained in lawlunch #06 professionals can be faced with administrative penalties, criminal prosecution or disciplinary proceedings. Although all of these possibilities are devastating for one’s career there is one accessory penalties which simply puts an end to a career. This is the accessory penalty of the prohibition to exercise your profession.
In lawlunch #07 we already touched upon the exclusion of employment provision as provided by article 28 of the Dutch Criminal Code (DCC). In this article we zoom in to the disqualification from practicing professions, or the exclusion of public-sector employment. Article 28 provides the possibility for the court to exclude – only for the crimes as defined by law – the offender from i) certain positions, ii) serving an armed force, iii) the right to vote, iv) to be a lawyer or judicial administrator and v) certain professions. These professions are defined in the penal provisions of the Dutch laws.
Practice shows that exclusion from profession is not imposed very regularly. In the years 1995 until 2008 it is registered by the Scientific Research and Documentation Centre of the Ministry of Justice that exclusion from profession was imposed 123 times. In more recent years exclusion from profession is imposed more often. This accessory provision is getting more and more attention in the political arena as well, which resulted in amendments of the law in order to make it possible to impose exclusion from profession for more crimes.
In the legislative history dating from 2010 it is explained by the legislator that for instance not only advisors can be punished for crimes committed in that capacity, it also applies to directors of companies. In the legislative history it is stated that ‘For a healthy economic climate it is of interest that entrepreneurs, consumers and the government can trust on their business relations in society. Criminal facts such as bankruptcy fraud, swindle and fraud damages this trust in a severe way. (…)’ Further it is elaborated that offenders often used legal entities to commit their crimes. Their own involvement can be concealed by the legal entity and the liability for damages caused can be outrun. ‘This however does not avoid that offenders, after their punishment is executed, again develop the same illegal activities, which again lead to the disadvantage of creditors and damage for society.’
Imposing professional exclusion for money laundering committed in a professional capacity has its basis in the law since 2001. Since 2010 however the law for instance provides the possibility to impose the exclusion from profession if the person involved committed forgery of documents. Article 235 DCC provides the option to exclude the offender from the profession in which he committed this crime. Article 194 DCC provides a similar provision if criminal acts have been committed in relation to bankruptcy. If tax fraud is committed by intentionally filing a false tax return in the sense of article 69 of the General Law on Government Taxes the exclusion of his profession can also be imposed – if the offender committed this crime in said professional capacity – based on sub 6 of the provision.
This expansion of the law does not provide for transitional law. This often means that mistakes are made. In our practice we see that a suspect of a crime committed before 2010 in a case which is currently pending could be confronted with a prosecutor requesting to impose exclusion of profession. However, when the alleged crime was committed this accessory penalty could not be imposed yet. This does not comply with the principle of legality which is set out in article 1 of the DCC. This provision states that no act is illegal unless it was forbidden by law before it was committed. Also no penalty can be imposed for a crime if it was not prescribed by law at the time the crime was committed . If the law changes after the crime is committed, the most advantageous rules for the suspect apply.
Even though this provision is very clear practice shows that the prosecutor sometimes tries to apply the new disadvantageous rule. This for instance happened in the case pending before the Court of Appeal of 27 May 2014. In this case a tax advisor was suspected to have committed tax crimes in the years before 2004. With regard to a forged loan agreement – which was also used with regard to the tax matters – the Court of Appeal excluded the tax advisor from this profession for five years.
This provision however only came into effect in 2010. In this respect the defense filed a complaint at the Supreme Court of the Netherlands against de decision of the Court of Appeal. The Supreme Court decided that – which in our opinion is the only correct decision – that it is a breach of the principle of legality to impose a sanction which only came into effect after the crime was committed. The Supreme Court dismissed the accessory punishment.
The proceedings before the Supreme Court were not necessary in hindsight. This case shows that the defense has to be very thorough in such cases and should anticipate on a possible accessory punishment like the exclusion of profession. We however can learn something from the decision of the Court of Appeal. It shows that the Court found the facts in this case severe to such a degree that this justifies the exclusion of profession. Relevant factors were a previous conviction, the attitude of the suspect during the court hearing and the fact that the suspect was still working as a tax advisor. The chance of recidivism according to the Court was too high.
We come to the conclusion that both the principle of legality and the factors as indicated above are relevant for a successful defense if it comes to punishment of a professional for crimes committed in his capacity. In that respect it is again necessary to realize that it is very popular nowadays to ‘attack’ professionals. They seem to be – according to the political and general opinion – the source of financial fraud. This however is certainly not the case in every situation. It becomes more and more relevant to choose a defense strategy in which the presentation of the sincerity of the suspected professional becomes more important than the legal merits of the case. For instance to avoid that the suspect is not only punished for a crime, but also is – that is how it feels at the end of the day – fired by the Court.
Is the exclusion of profession as a punishment provided by law in your country? And under which circumstances? And do you find that there are – adequate – legal defense options to avoid such a punishment?