KNB: accelerated renewal after fraud at Pels Rijcken

The Royal Dutch Association of Civil-Law Notaries (KNB) will accelerate the implementation of reforms within the notarial profession, partly in response to the recent fraud case at Pels Rijcken. The focus will be on the registration of secondary positions, the management of foundations, and the auditing of escrow accounts.

Civil-law notaries have been urged to update their secondary office declarations. This is mandatory. This allows the Royal Netherlands Bank for Notaries (KNB) and the Financial Supervision Office (BFT) to review these reports. They will now do this annually. In addition, the KNB is inventorying which civil-law notaries are registered as sole directors of foundations. As of April 1 of this year, external regional confidential advisors have been appointed to whom integrity issues and any notarial misconduct can be reported.

Third-party funds
The Royal Netherlands Bar Association (KNB) is also implementing additional rules this year for the management of third-party funds, the rights to which are not immediately clear. The KNB is in consultation with the Ministry of Finance to allow civil-law notaries to deposit these so-called "pending funds" more quickly and easily into the Ministry's consignment fund if, after a certain period, a civil-law notary has been unable to identify the beneficiaries. This is to prevent an individual civil-law notary from having access to these funds for extended periods without further supervision.

Digitalization
Finally, the Royal Dutch Banking Association (KNB) aims to streamline supervision of the notarial profession by further digitizing notaries' payment transactions through their escrow accounts. This includes exploring the use of algorithms. The KNB is discussing this with the Dutch Banking Association and the Financial Supervision and Finance Act (BFT).

Pels Rijcken
The KNB measures are partly prompted by the fraud case at Pels Rijcken, where the former chairman of the board, as a civil-law notary, spent many years funneling and embezzling substantial sums from foundations through escrow accounts to private accounts. The KNB actions also stem in part from recommendations in the 2019 "Quality & Supervision Working Group Report" from the KNB and the BFT, which are now being implemented more quickly.