Abstract
This chapter presents the outline of relevant legal frameworks. The regulations that corporate investigators have to abide to are discussed, along with a broad overview of the organisation of the criminal justice system, general regulations and data protection regulation. A specific focus is, additionally, put on the differences between the four main groups of investigators. One interesting fact that is discussed in-depth is the general lack of formal regulations for many corporate security professionals. There is no uniform form of regulation, applicable to all corporate investigators. Differences in regulation (and professional background more generally) are used by the different corporate investigators as a way to market their product. However, generally speaking, corporate investigators provide similar services to clients.
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Notes
- 1.
For example, information companies, debt collection agencies, IT specialists and companies specialising in employee absence might also be involved in investigative activities. Many of these actors do not have (or need) a permit as discussed in Sect. 3 of this chapter because they are not investigating individuals (‘natural persons’). The focus in this research is on those professional investigators who investigate (persons) as their core professional activity.
- 2.
In Dutch, this law is called the Algemene Verordening Gegevensbescherming (AVG), which translates back to ‘general regulation on data protection’. To avoid confusion, the AVG is referred to as the ‘implementation law of the GDPR’ in this book. While the impact of this change in legislation on the daily practices of corporate investigators is not yet clear, it is important to keep in mind that the data collection for this research has been done prior to the implementation of the new privacy regulations. Where relevant, this will be discussed throughout the book.
- 3.
In addition to national privacy laws, international and EU privacy regulations are relevant to corporate investigations as well. Corporate investigations may cross national borders and so may personal data. With the implementation of the GDPR, privacy law within the EU has been harmonised. Where relevant, specific international and EU regulations are mentioned throughout the book.
- 4.
This is not a report to law enforcement authorities in the sense of a victim trying to spark criminal investigations, but a notification of ‘unusual transactions’. It could, however, lead to a criminal justice procedure or investigations by the relevant regulatory agency in their own right.
- 5.
The large-scale ING scandal of late 2018 revolved around the bank’s failure to comply to the Wwft. ING settled with the prosecution office for an amount of 775 million euros to avoid prosecution (see Functioneel Parket, 2018).
- 6.
The adversarial principle plays an important role here—the right of a subject to be heard and informed.
- 7.
See Staatscourant, 6 juli 2000.
- 8.
There have been multiple other intermediary changes in the law but these are not relevant at this point (Fijnaut, 2002).
- 9.
This requirement does not apply to people born prior to April 1944 and working as a private investigator prior to the Wpbr came into force (article 26 Rpbr). With this, the legislator seems to accommodate the former police officers who have been working as private investigators for a long time. The Wpbr was late to occur, and before it came into force, there already was a substantial private investigations sector in the Netherlands.
- 10.
See Staatscourant, 1 april 2014, nr. 9654.
- 11.
This means that employees of the police are not allowed to ‘moonlight’ as a private investigator (for more on this, see Chapter 5 of this book). See also ECLI:NL:CRVB:2017:1987.
- 12.
The privacy code of conduct has been updated for the time period 2016–2021 and was again approved by the Data Protection Authority. However, as a result of the introduction of new European privacy legislation, the privacy code of conduct needs to be revised again. Revisions have been made and the privacy code of conduct is currently under consideration by the Data Protection Authority. In the meantime, the privacy code of conduct ‘should be read in accordance with the GDPR’ (Autoriteit Persoonsgegevens, n.d.-c).
- 13.
Interestingly, in-house security providing security services other than investigations is obliged to get a permit under the law.
- 14.
Neither is there a specific education, leading to a title ‘forensic accountant’. There are, however, some courses within other academic studies, such as criminology (Leiden University) and the Big Four have their own internal courses.
- 15.
Before, there were two organisations, the NIVRA (for RAs) and the NOvAA (for AAs).
- 16.
For an overview of legal developments around accountancy in the Netherlands until 2007, see de Graaff (2007).
- 17.
More recently, a debate was ignited by two well-known forensic accountants about the question how much can be expected of a controlling accountant when it comes to the detection of fraud (see Piersma, 2018).
- 18.
Interestingly, the law indicates that accountants are bound to discretion about the information they gather during their legally mandated control tasks, unless they come across a fraud of material importance to the financial accountability of the client. In such a case, he should report this to law enforcement (article 26 Wta). ‘Fraud of material importance’ is fraud of such a nature or size that it may, for example, influence investment decisions of others. However, when the client acts directly upon this information by ordering an internal investigation and making a plan about the steps to be taken, this obligation to report does not apply (article 37 Bta [Besluit toezicht accountantsorganisaties]).
- 19.
Chapter 3 will discuss this more in-depth.
- 20.
- 21.
There is no official education for investigative lawyers. However, there are some new initiatives targeting accountants and lawyers. These (academic) courses may be used for the permanent education points system. For example, the course ‘financial forensic expert’ of the Erasmus University Rotterdam aims at both accountants and lawyers.
- 22.
These disciplinary proceedings were bases on rule 29 of the old code of conduct (1992), which only mentioned third parties (clients were added in the 2018 code of conduct).
- 23.
Code of Criminal Procedure.
- 24.
However, some forensic accountants have worked for either police, prosecution or specialised investigative services such as the FIOD (the investigative service of the Dutch revenue authority) in the past.
- 25.
It is important to note that there is some discussion about this. Some accountants feel they are allowed to draw conclusions as long as these are based on the factual results of the investigations.
- 26.
According to the Minister of Justice and Security (2018), 8 fines were issued and 6 permits were revoked between 2013 and 2018.
- 27.
See Staatscourant, 2 oktober 2006, nr.191.
- 28.
- 29.
Although research on this subject is largely absent, it is suggested by respondents and by scholars that one-man private investigation firms, mostly working on request by private citizens, tend to fall in this category.
- 30.
Whether this is changing in the aftermath of the reputational damage the accountancy profession has suffered in the economic crisis remains an open question at the moment.
- 31.
This control is of course dependent on someone complaining about the accountant and making a disciplinary case against him or her.
- 32.
Although, as we have seen, within the sector there is a view of private investigation firms being the most police-like. This would substantiate White’s claims that these are the ones being regulated (as the Wpbr excludes all others from its framework).
- 33.
As explained in Chapter 4, there is a duty for public sector organisations to report crime to the police (article 162 WvSr [Criminal Code]). In many cases, organisations do not comply with this obligation and deal with the matter privately. Furthermore, there is a general obligation to give notification of suspicious transactions, based on the Wwft. This does not seem to lead to a more comprehensive overview of corporate investigations at the moment.
- 34.
The register of the in 2015 established NFFI (Nederlands Financieel Forensisch Instituut), for example, as of yet contains a very modest number of experts (see www.nffi.nl). The NFFI has recently attempted to provide comprehensive guidelines applicable to all investigators. Reactions on this initiative are mixed (see Knoop & Piersma, 2017). The Institute for Financial Crime (IFFC) was also founded in 2015 and is an example of a new representative organisation, active as a knowledge centre and explicitly aimed at public-private cooperation (see www.iffc.nl).
- 35.
See, for example, https://www.accountant.nl/nieuws/2017/5/nieuwe-opleiding-fraudeonderzoeker/.
- 36.
This is a result of the Liverpool-seminar that I have organised together with John Moores University. The seminar served as a platform for discussion between participants (being academics, corporate investigators and law enforcement professionals) and myself. In addition, three corporate investigators were interviewed in this context. Interestingly, from the UK interviews similar information was derived as was the case in the Dutch context. The UK respondents mentioned the same type of norm violations, investigative methods and corporate settlements as the Dutch respondents. With regard to public-private relationships, the same kind of frustrations emerged from the discussion with seminar participants as can be derived from the Dutch interviews and, similarly, from the UK interviews these themes also emerged.
- 37.
This does not, however, mean that the UK corporate investigation sector is completely unregulated. UK Respondent 2, for example, indicates that in addition to having to notify the Data Protection Authority that personal data are being processed, there might be certain additional standards that apply to investigative work in, for example, the healthcare sector. ‘Fundamentally, the back-story to everything I do will be UK criminal law, police and criminal evidence act, procedures and investigations act. So how you do your investigations will always be to that sort of standard. But then, having worked in different sectors, the different sectors themselves all have certain rules and regulations that are applicable to them’ (UK Respondent 2).
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Meerts, C.A. (2019). Legal Frameworks. In: Corporate Investigations, Corporate Justice and Public-Private Relations. Crime Prevention and Security Management. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-26516-8_2
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