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A plea for an ex parte disclosure order 

IFFC Working Group Asset Tracing & Recovery

In its fight against white-collar criminals, the Dutch Public Prosecution Service finds itself side by side with forensic accountants and lawyers in pursuit of the profits of crime. IFFC's Working Group Asset Tracing & Recovery argues for the introduction of a third party disclosure regulation in the Netherlands, a legal action to motivate banks to hand over fraudsters' account information.

These days, fighting white-collar crime is no longer reserved to the Public Prosecution Service. In its bitter struggle with white-collar crime, and while being plagued by inadequate resources, the Public Prosecution Service is receiving more and more support from commercial private practitioners using civil law measures.

In practice, however, these civil law practitioners bump into quite a number of hurdles such as the 'Code of Conduct for the Processing of Personal Data by Financial Institutions' - the regulations with which Dutch banks protect the privacy of their account holders. Even if the account holder in question is mala fide. IFFC's Working Group Asset Tracing & Recovery argues for an exception to these regulations.

The only option at this moment is to initiate proceedings under section 843a of the Dutch Code of Civil Procedure, whether or not proceeded by the seizure of evidence. These are legal proceedings to gain access to information that belongs to, for example, a third party such as banks or trust offices. But the biggest risk entailed by these discovery proceedings is that the person who caused the damage learns of the request, and transfers the money to a bank account in a different legal jurisdiction. This makes it very difficult to take efficient action against fraudsters. This is especially true for the international context in which it is of the utmost importance that research can be carried out in the various jurisdictions as long as possible without the fraudster being aware of it.

The fact that the Dutch discovery proceedings are not on an ex parte basis, means that there is no guarantee of confidentiality.  Initiating such proceedings means that there is a risk that the fraudster becomes aware of the fraud being investigated and that criminal assets will be transferred to other jurisdictions. For this very reason, we see asset recovery lawyers in other jurisdictions trying to obtain the necessary information indirectly, for example by conducting discovery in other jurisdictions where this confidentiality is guaranteed. This shouldn’t be necessary, in our opinion.