Administrative fine for a company
Administrative fines can be based on a multitude of laws, so virtually any entrepreneur can be affected.
Where is the administrative fine regulated in the law?
This is regulated in Section 5:40 of the General Administrative Law Act and is defined as a punitive sanction involving an unconditional obligation to pay a sum of money. Obviously, the administrative fine is also reflected in all kinds of other legislation, such as the Competition Act, Pension Act, Municipal Act, the Financial Supervision Act, the Money Laundering and Terrorist Financing Prevention Act.
If a government body intends to impose an administrative fine, an intention will be sent, in which the interested party will be given the opportunity to present an opinion. This is also referred to as the “hearing requirement”. If the fine exceeds EUR 340, a report or an official report must be drawn up.
Defense against administrative fine
Imposing an administrative fine is becoming increasingly popular. It is a quick and effective way to punish and the government makes full use of it. However, an administrative fine is a criminal charge and is surrounded by guarantees arising from criminal law. These guarantees are reflected in administrative law and more specifically in the General Administrative Law Act. Some principles are: the principle of legality (which means that an accused may not be prosecuted for an act that is not declared a crime in that jurisdiction), the right to remain silent (as a suspect/the fined company you do not have to respond to allegations), the obligation to cease (“you have the right to remain silent”), the ne bis in idem principle (no legal action can be instituted twice for the same cause of action) and of course no punishment without guilt.
Fine too high: moderation?
In the case of a fine, it is first of all very important to find out how the amount of the fine is structured and whether there is any policy regarding the fine. The latter is (almost) always present and means that government policy indicates how a fine is structured. The government policy takes into account, for example, whether the company is being fined for the first time, or whether there is intent to what extent other parties have been disadvantaged by the actions of the fined party. Simply put, the seriousness and duration of the violation and all relevant circumstances of the case often play a role and are contained in policies. In addition to the policy, there usually also exists other lower regulation in which the basis of fine amounts is explained. Fines can furthermore often be increased if there is an advantage. In criminal law this is then called “depriving of unlawful advantage” and in administrative law that is not much different.