12 tips for a visit from the fiod, the dutch fiscal intelligence and investigation service (for you as a service provider). What should you do (and why)?

An FIOD investigation may have far-reaching consequences for your customer. Not to mention that the possible consequences it may have for you as a service provider. Below you will find twelve tips on what to do if the FIOD suddenly comes knocking at your door.

You do not necessarily have to be a suspect to be confronted with a visit from the FIOD. Regardless of whether you are a suspect (or at risk of being one), as a rule, such a visit is unpleasant and even intimidating. Unlike, for instance, a tax inspection, the FIOD usually arrives unannounced. In this consternation, your initial reaction is to be cooperative. However, even if you are not regarded as a suspect, it is important that you know what to do.

Bear in mind that it is perfectly normal to only comply with a request or even a demand to provide information that you would not normally share with strangers when you are under an obligation to do so. Moreover, as a service provider you are obliged by your rules of professional practice or contract to maintain secrecy. Unless you are under a legal obligation, you shouldn’t even voluntarily cooperate under coercive force applied by investigation services.

Investigating officials like the FIOD should not be given the opportunity to use their powers beyond the scope for which they are intended.

Tip

1. Escort the investigating officers to an empty room (where there is no administration lying about) and ask them to identify themselves.
2. Call the manager, person in charge of the file and contact a lawyer.
3. Do not (as yet) answer any questions.

Why:

Investigating officers that cannot identify themselves as such – also check that the ID is still valid – have no powers. They can be shown the door without any discussion.

Because this will only apply on very rare occasions, it is wise to realise that under Article 83 of the Dutch General Tax Act (AWR), FIOD officers have access to any location ‘to the extent that this is reasonably required for them to do their work’. When FIOD officers are escorted to a separate room to await the summoned manager and/or accountable person, there is generally no need for them to use their power to start browsing.

Leaving FIOD officers to walk about poses a risk. Pursuant to Article 81 of the AWR, the FIOD are authorised to confiscate objects at all times. The FIOD may even ask for these objects to be handed over to them. Even from a suspect. The less opportunity is given for extending the investigation the better.

Tip

4. Keep desks tidy and filing cabinets locked.

Why:

The FIOD officials’ power to seize objects and gain access to anywhere is limited to the power to ‘browse’. This explicitly means that the power to search does not extend to ransacking the place. In case law, the term ‘browse’ is, however, stretched. ‘Browse’, for example, also means opening a cupboard or cabinet door. If objects are found other than the ones the investigating officers are looking for, these objects may also be seized.

It has already been stated above that as long as no opportunity is given for browsing, the officers may not proceed to do so. Also bear in mind here that saving (sub) files separately in networks, on servers and the cloud, prevents all data from being recorded in the search for that one component. In this context, please also refer to the Tax inspection guide.

Tip

5. Determine your position. Are you a:

• ‘third party’?
• (potential!) (fellow) suspect?
• (derived) professional entitled to privilege? 

Failure to comply with a request to submit is ‘failure to comply with an official order.’ This is a criminal offence. Although, as already mentioned, during an FIOD investigation of tax offences, a suspect may also be requested to hand over documents. A suspect may refuse if this order is given on the basis of Article 96a(3) of the Code Of Criminal Procedure (hereafter ‘Sv’), which does not specifically provide for the investigation of tax offences. Do not hesitate to consult a lawyer if there is any doubt about whether the investigation concerns a tax offence. In the case of a suspect, a further request may not be made to obtain (digital) data on the basis of Article 126nd(2) of the Sv. Under Article 126nh(2) of the Sv, a suspect may not be forced to decrypt code-protected (digital) data. For this reason alone, it is good to be clear whether you qualify as a suspect.

Not least because the prosecution policy of different Functional Prosecution Offices increasingly focus on so-called ‘facilitators’ over the past few years, it is important that you realise that as a service provider you may be taken as a suspect along with your client in a criminal investigation (Also read my blog on this: Co-perpetrators: accountants and other riffraff beware!). Whether as a manager or even as an employee of the suspected natural person you are entitled to the same rights as the suspected natural person, his affairs will have to be assessed on a case-to-case basis. If you have difficulty determining this, it is important that you seek the assistance of a lawyer the moment you are confronted with such requests.

If you have performed services by order of or in cooperation with a professional entitled to privilege, such as a lawyer, you may be obliged not to cooperate as a derived professional entitled to privilege.

If you have difficulty determining your position, do not hesitate to request deferment and find out, and, if necessary, engage a lawyer to represent you.

6. Ask what they are looking for and where and what the object of suspicion is
7. Ask for written requests and authorisations.

Why:

There is a significant difference between requesting ‘tangible’ objects and recording ‘digital’ data.

Objects may be demanded (AWR, Art. 81, Sv, Art. 94, 94a) for:

• the process of establishing the truth (investigation relating to suspicion);
• proof of illegally obtained advantage
• as capital lock-up for a financial penalty/confiscation of illegally obtained assets (read more about this in this blog: ‘Does reaping benefits in a roundabout way led to double trouble?’)
• as capital lock-up for confiscation/removal from circulation.
• When FIOD officials record data be aware that a distinction is made between:

• identification data (‘who are you?’);
• other identification data;
• sensitive data (race, religion, political persuasion, sexual preference).

Depending on the extent to which the recording of data intrudes on the privacy of individuals, stricter conditions will be set for exercising the method of coercion. Be aware of why something is being asked.

Tip

8. Only provide what is specifically demanded.
9. Check (yourself) whether you have the requested information available.
10. Make a note of what you hand over (do this together).
11. If necessary, ask for an extension of the term in which information has to be provided.

Why:

You cannot hand over objects or data that you do not have in your possession. There is no obligation to tell investigating officers where they might be able to find the objects or data they are looking for. Nor is there any obligation to inform investigating officers of any other matters that might be interesting for their investigation.

An order to decrypt requesting, for instance, to make encrypted digital data accessible for security reasons, may only be given to the person that encrypted the data. Knowing how to decrypt does not constitute an obligation to proceed to do so. Bear in mind that if decryption is not possible, this may give cause to seize the entire server.

Tip

12. Questioning as suspect or witness (hearing)? No obligation to answer!

Why:

As a suspect, you do not have to cooperate on your own conviction. You therefore do not have to answer questions that are put to you.

A professional entitled to privilege, derived or otherwise, may decide to invoke this right to refuse to answer any questions put to him/her.

However, third parties or professionals that have a (derived) entitlement to privilege that do not invoke their right of nondisclosure are not obliged to answer questions put to them by FIOD officials or an attending prosecutor. An obligation to answer the questions asked only exists after a person (not being a suspect or a (derived) professional entitled to privilege is summoned by a (supervisory) judge to make a statement as a witness. Bear in mind that in many cases whereby as a service provider you have made a non-disclosure agreement with your clients, you are obliged to remain silent until you are summoned! If it should come to a hearing, read our hearing tips.