{"id":20092,"date":"2022-10-17T10:16:19","date_gmt":"2022-10-17T10:16:19","guid":{"rendered":"https:\/\/crigroup.com\/?p=20092"},"modified":"2024-01-15T08:22:49","modified_gmt":"2024-01-15T08:22:49","slug":"the-new-dutch-child-labour-due-diligence-law-some-faqs","status":"publish","type":"post","link":"https:\/\/crigroup.com\/ar\/the-new-dutch-child-labour-due-diligence-law-some-faqs\/","title":{"rendered":"The new Dutch Child Labour Due Diligence Law: Some FAQs"},"content":{"rendered":"
On November 13, 2019, the new Dutch Child Labour Due Diligence Law<\/a> was published in the Dutch Government Gazette. It introduces a duty of care for companies to prevent the supply of goods or services which have come into existence using child labour. Companies likely to be affected must set out a plan of action on how to combat it and issue a due diligence<\/a> statement on their investigation and plan of action.<\/p>\n Though the exact date the act comes into force is not yet known, companies will have six months from the law’s effective date to submit the required documentation demonstrating compliance with the statute. Companies, even those registered outside the Netherlands, selling goods or services to Dutch end-users are required to exercise due diligence to assess whether the services or goods being supplied have been produced using child labour.<\/p>\n Under the Act, firms are required to ensure due diligence through the following:<\/p>\n In cases of non-compliance with the Child Labour Due Diligence Law, the supervisory authority must first issue a compliance order. It can only impose an administrative fine if the company fails to duly comply with this order.<\/p>\n Non-compliance with the obligation to submit the required statement can result in an administrative fine of a maximum of EUR 4,350 or a fine of up to EUR 8,700. Failure to exercise due diligence or develop and execute a plan of action as required by the Act may result in a fine of up to EUR 870,000 or a fine of up to 10% of the company’s turnover in the preceding financial year.<\/p>\n Repeated non-compliance with the Act within five years of the imposition of an administrative fine is an economic offense under the Dutch Economic Offences Act. While the Act’s criminal provision is ambiguous, company directors could face up to two years in prison or a fine of up to EUR 21,750.<\/p>\n The Act reflects a significant new step in combating child labour in corporate supply chains, introducing mandatory requirements under an administrative and criminal penalty regime. It fits into an increasing global focus on CSR and labour trafficking in corporate supply chains.<\/p>\n Although several aspects of the Act need to be further clarified by subordinate legislation, companies should start assessing the possibility of any form of child labour in their supply chains. They should also consider reviewing whether existing compliance programs will be sufficient to comply with the Act’s requirements.<\/p>\n Several key questions remain: When will the implementation of the law begin? What should the statement include? What constitutes sufficient due diligence? and Which government body will be in charge of regulating and enforcing the law? These elements will be specified in the General Administrative Orders to be announced by the Dutch government. The law\u2019s effectiveness will largely depend on how these administrative orders take form.<\/p>\n Despite its flaws, the Dutch law is a critical moment for the international movement toward mandatory due diligence.<\/p>\n At CRI\u00ae, we provide due diligence services wherever you are. Use our DueDiligence360\u2122 reports to help you comply with anti-money laundering, anti-bribery, and anti-corruption regulations ahead of a merger, acquisition, or joint venture. You can also use them for third-party risk assessment<\/a>, onboarding decision-making, and identifying beneficial ownership structures.<\/p>\n On November 13, 2019, the new Dutch Child Labour Due Diligence Law<\/a> was published in the Dutch Government Gazette. It introduces a duty of care for companies to prevent the supply of goods or services which have come into existence using child labour. Companies likely to be affected must set out a plan of action on how to combat it and issue a due diligence<\/a> statement on their investigation and plan of action.<\/p>\n Though exact date the act comes into force is not yet known, companies will have six months from the law’s effective date to submit the required documentation demonstrating compliance with the statute. Companies, even those registered outside the Netherlands, selling goods or services to Dutch end-users are required to exercise due diligence to assess whether the services or goods being supplied have been produced using child labour.<\/p>\n Under the Act, firms are required to ensure due diligence through the following:<\/p>\n In cases of non-compliance of the Child Labour Due Diligence Law, the supervisory authority must first issue a compliance order. It can only impose an administrative fine if the company fails to duly comply with this order.<\/p>\n\n
The Consequences of Failure to Exercise Due Diligence<\/h2>\n
Due Diligence investigations:\u00a0Mitigate Critical Risks<\/h2>\n
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