What is an order subject to penalty?
An order subject to penalty is a remedial sanction ordering a legal entity or a natural person to do or not do something. The order may serve to remedy or end an offence, to prevent repeated offences, or to remove or mitigate the consequences of an offence.
The decision to impose an order subject to penalty specifies the deadline by which the offence or its consequences must be remedied, also referred to as the "compliance period". Failure to carry out the order or to carry it out by the specified deadline creates an obligation to pay a sum of money, also referred to as "forfeiture of a penalty". A penalty may be imposed as a lump sum, as a sum payable for each time unit that the order has not been carried out, or as a sum payable for each instance of non-compliance with the order. The decision also specifies the maximum penalty forfeited.
DNB is authorised to impose an order subject to penalty for non-compliance with the regulations laid down in the supervisory legislation referred to above or with the specific provisions of any of the Acts listed. DNB may also impose an order for non-compliance with any rule or regulation ensuing from the law. Its powers to do so are laid down in:
- Article 1:79 of the Wft;
- Article 175 of the Pw;
- Article 170 of the Wvb;
- Article 20 of the Wtt;
- Article 26 of the Wwft, and
- Article 10c of the Sw.
On whom may an order subject to penalty be imposed?
DNB may impose an order subject to penalty on any legal entity or natural person subject to its supervision for non-compliance with any provision of the Acts listed above or the ensuing rules and regulations.
Pursuant to the General Administrative Law Act (Algemene wet bestuursrecht – Awb), in the majority of cases DNB must give the party on whom it intends to impose an order subject to penalty the opportunity to state its views. Views may be stated orally, in writing, or both. Taking the party's statement of views, if any, into consideration, DNB decides whether or not to impose an order subject to penalty.
If the party fails to carry out the order within the specified compliance period, it will forfeit one or more penalties. To collect them, DNB will send it a collection decision.
Disclosure under the Wft
DNB is required by law to disclose decisions to impose an order subject to penalty once the relevant decision is irrevocable. It also discloses the outcome of any objection or appeal preceding the decision. DNB also discloses decisions to impose an order subject to penalty as soon as practicable upon forfeiture of a penalty.
Orders subject to penalty are not disclosed if disclosure of the decision to impose them would be disproportionate to the gravity of the non-compliance or would jeopardise the stability of the financial system.
DNB may postpone the disclosure of the decision or disclose it in anonymised form if it establishes beforehand that full disclosure is likely to have any of the following consequences:
- disclosure of the personal details of the natural person on whom the order subject to penalty is imposed would be disproportionate to their act of non-compliance;
- disclosure would cause disproportionate detriment to the parties involved;
- disclosure would undermine an ongoing criminal investigation, or an examination held by the supervisory authority; or
- disclosure would jeopardise the stability of the financial system.
Decisions to impose an order subject to penalty are disclosed at least five business days after the date on which the disclosure decision was notified to the party involved. If, in the course of this waiting period, the court is requested to grant injunctive relief, the disclosure of the decision will be suspended until the court in preliminary relief proceedings has passed judgment. Only in urgent cases may DNB disclose an order subject to penalty immediately without observing the five-day waiting period.
Disclosure under the Pw
DNB may disclose decisions to impose an order subject to penalty for non-compliance with the Pw or the Wvb. If DNB decides to disclose a decision to impose an order subject to penalty, it notifies the party involved of the disclosure decision. Decisions to impose an order subject to penalty are disclosed at least five business days after the date on which the disclosure decision was notified to the party involved. If, in the course of this waiting period, the court is requested to grant injunctive relief, the disclosure will be suspended until the court in preliminary relief proceedings has passed judgment.
Objection and appeal
Decisions to impose an order subject to penalty are open to objection within six weeks after the date of their notification (objections may be lodged online or by ordinary post). If an objection is lodged, DNB will review its decision.
Dismissed objections are appealable before the Rotterdam District Court. Rulings of the Rotterdam District Court are appealable before the Trade and Industry Appeals Tribunal (College van Beroep voor het bedrijfsleven – CBb).
Objections to orders subject to penalty have no suspensory effect, i.e. penalties may still be forfeited or payable, or both, in the course of the objection and appeal proceedings.