Corruption can profoundly disrupt international trade. Fines, criminal prosecution, and market exclusion can permanently harm a company. In our practice, we advise Dutch clients on anti-corruption compliance, particularly regarding activities involving government contacts or agents. For Dutch companies, not only Dutch regulations are relevant, but also extraterritorial laws such as the UK Bribery Act 2010 and the US FCPA 1977.
What is the legal issue?
Anti-corruption impacts international contracts at multiple levels: bribery of government officials, commercial bribery, facilitating payments, agent relationships, and gift and hospitality policies. Internationally, rules vary in scope, strict liability, and jurisdictional extent. Without clear contractual protection, you bear risks caused by agents you do not actually control.
What does the law say?
The UK Bribery Act 2010 recognizes four principal offences and the broader failure to prevent offence for companies (Section 7). The US FCPA 1977 prohibits the bribery of foreign public officials by companies with US ties. The Dutch Criminal Code (Articles 177, 178, 328ter, 328quater) prohibits active and passive bribery. The OECD Anti-Bribery Convention binds 44 countries to criminalize the practice.
For enforcement in the Netherlands, the Directive on the Investigation and Prosecution of Official Corruption Abroad and the Economic Offences Act apply in addition.
What risks do companies face?
Fines under the UK Bribery Act and FCPA run into hundreds of millions. Criminal prosecution of directors is possible under Section 51 of the Dutch Criminal Code (participation) and Section 177 of the Dutch Criminal Code. Exclusion from public contracts undermines commercial futures. Reputational damage is usually permanent. Insurers exclude coverage. Banks can terminate business relationships. Shareholders can file civil claims.
Practical example from our practice
We represented a Dutch engineering firm that used a commercial agent in an African country. The agent paid bribes to win a government contract. The agency was prosecuted under UK Bribery Act Section 7 (failure to prevent) due to inadequate prevention measures. In our compliance program, we built in: an agent contract with strong compliance clauses, training, audit, and risk-based due diligence under OECD guidelines. Subsequent projects successfully defended under adequate defense procedures.
What can you do?
Implement anti-corruption policies and train staff. Conduct due diligence on agents, partners, and M&A targets. Build anti-corruption clauses into all contracts, with declarations, audits, and termination. Regulate gifts and hospitality with a fixed ceiling and approval process. Document everything for adequate defense procedures. See also our article on Contracting with Governments Abroad.