Investigations trends/developments
Whistleblower protection
The new Belgian Whistleblowing Act came into force in February 2023 and protects whistleblowers who report wrongdoing in a work-related context. It imposes a range of new obligations on companies, including the obligation to set up reporting channels and procedures to deal with whistleblowing reports. Companies who do not comply with their duties may be sanctioned with administrative fines or criminal penalties.
The entry into force of the new Belgian Whistleblowing Act and the implementation of whistleblowing hotlines across all sectors has heightened the focus on workplace misconduct and psychosocial hazards. Internal investigations frequently intersect with regulatory and criminal enforcement giving rise to significant challenges and risks.
Rising number of cases by the EPPO
The EPPO started its activities in 2021 and gained good traction. In 2023 it launched new prosecutions in Belgium targeting, among other things, evasion of customs duties, fraud affecting EU financial interests, and specific types of VAT-fraud. In EPPO cases, prosecution and court litigation continues to be the preferred option by the authorities, with out-of-court settlements and dismissals the exception.
Sanctions
The EU has successfully concluded negotiations for a new directive harmonizing criminal law standards and penalties for sanctions violations across the EU. Sanctions will remain at the forefront of international policymaking, and it is ever more challenging for companies to comply with the rapidly evolving sanctions landscape.
Prosecutorial attention to social fraud, social dumping and modern slavery
The scrutiny of social fraud, social dumping (where workers are given substandard pay and/or working and living conditions) and modern slavery by Belgian authorities is intensifying, across both traditional and novel sectors. Large-scale investigations and prosecutions are encouraged by social law chain liability schemes, and they frequently involve allegations of serious criminal offences, such as participating in a criminal organization, or aiding or abetting human trafficking. These kinds of investigations are generally less likely to be settled out of court and pose a serious threat to businesses' commercial, legal and reputational interests.
A proposed new code of criminal law introduces radical changes to Belgian substantive criminal law rules. Penalties for existing offences are being revised and streamlined. New criminal offences, including a self-standing offence of ‘ecocide’, will be introduced.
Important amendments to the Belgian code of criminal procedure are also being contemplated, fundamentally changing the rules on jurisdiction and on statutes of limitations.
Internal investigations – key considerations
Legal privilege, the need for clear investigation processes, and the oversight of internal investigations by senior management committees, continue to be key topics.
Rules introduced by the Belgian Whistleblowing Act have accelerated the need for businesses to carefully manage their intake and triage of whistleblowing reports, and to ensure due process during an internal investigation.
The transport and construction sectors (among others) are being specifically targeted as high-risk sectors in the fight against social fraud and illegal employment. In addition, financial intermediaries remain firmly in the crosshairs of Belgian prosecutors when investigating and prosecuting fraud matters.
Cross-border coordinated investigation or enforcement activity
Rising number of cases by the EPPO
The EPPO has continued to target cross-border criminal conduct in close collaboration with other EU institutions, including the European Anti-Fraud Office (OLAF). As a result, we have seen an uptick in enforcement action in relation to cross-border fraud, especially in customs matters.
Cross-border access to e-Evidence
The EU is focusing on the facilitation of cross-border access to e-Evidence in criminal matters. Criminal conduct is increasingly moving online, and this is not only the case for cybercrime but for all types of crime, including cross-border white-collar crime. Electronic evidence, including content data such as e-mails, photographs and videos, is collected in almost all criminal investigations. However, obtaining access to e-Evidence still proves cumbersome, and judicial authorities have been struggling to obtain swift and effective access to data stored in other jurisdictions. This is especially challenging as e-Evidence can easily be deleted or transferred, literally at the click of a mouse. The EU has been designing a legal framework to facilitate cross-border access to e-Evidence since 2016. Recently, this process has gained momentum and in 2023, a legislative package was adopted that is designed to make it easier for national authorities to obtain and preserve e-Evidence from service providers across national borders. The EU has adopted a far-reaching approach to the territorial scope of these new rules, as we have seen in other areas. Providers that offer services in the EU must comply with these rules, regardless of their location or where they store data. We expect that this will cause conflicts of laws.
Eyes on crypto as proceeds of crime
Against the backdrop of a tightening regulatory framework, Belgian criminal authorities are stepping up their efforts to seize crypto assets that are derived from criminal activities, as they encounter difficulties in tracking, freezing, and confiscating digital assets. We anticipate that the authorities will adopt a more assertive approach and try some innovative methods to prevent suspects from accessing crypto assets that are identified as proceeds of crime.
Predictions for 2024
Environmental law enforcement, including against greenwashing: The EU recently concluded an agreement on a proposal for a new directive on the protection of the environment through criminal law. The proposed directive provides for new environmental crimes and harmonizes criminal penalties, including imprisonment sentencing and fines. With environmental NGOs increasingly pursuing litigation against companies to challenge their environmental impact, the legislative developments in this area will need to be considered closely by in-house legal teams in a wide array of sectors. From what is happening in neighboring countries, we also expect to see more greenwashing claims in Belgium against companies and directors by regulators, prosecutors, shareholders and NGOs.
Social fraud, social dumping and modern slavery: In-house legal and investigation teams must continue to focus on risks of social fraud, social dumping and modern slavery, which have a significant potential to trigger the chain liability systems prevalent in Belgian law. Once these systems are triggered, they may have far-reaching consequences for companies making use of (sub)contractors, even if the infractions are limited to a lower-tier supplier, resulting in the company being exposed to civil and even criminal liability.
Enforcement of crime harming the EU’s interests: The EU continues its quest to boost the criminal enforcement of legal violations that harm EU interests. Besides the investigations initiated by the EPPO that are aimed to protect the EU’s financial interests, the EU has now also agreed a legislative package to harmonize and strengthen criminal enforcement of EU sanctions laws, and is openly calling on Member States to step up enforcement in this area as well.
A new era for out-of-court settlements? Out-of-court criminal settlements allow suspects to avoid criminal prosecution without admission of guilt. Prosecutorial policy has been strongly in favor of settling financial and economic criminal cases for many years. However, this option is increasingly criticized as a form of class justice that creates a perception of impunity and injustice, and there is already evidence that some prosecutors are becoming more reluctant to initiate settlement negotiations, especially in cases involving alleged corruption and certain regulatory violations.
This article is part of our Cross-Border White Collar Crime and Investigations Review. Please click here for our overviews and insights in other jurisdictions.
