KNB supports BFT recommendations after investigation at Pels Rijcken

The Royal Dutch Association of Civil-Law Notaries (KNB) supports the recommendations published today by the Financial Supervision Office (BFT) following its investigation into the Pels Rijcken fraud scandal. Furthermore, the KNB welcomes the BFT's intention to consult with organizations other than the KNB to exchange information that will strengthen each other and the BFT's supervisory role.

Earlier this year, the Royal Netherlands Bar Association (KNB) announced it would accelerate the implementation of reforms following the Pels Rijcken fraud case. The BFT (Dutch Association of Civil-Law Notaries ) endorsed this recommendation, including its recommendation to tighten supervision of the obligation for civil-law notaries to disclose all secondary positions. Last spring, the KNB urged all its members to update their secondary positions so that the KNB and the BFT, as the regulator of the notarial profession, could verify these reports.

Compliance
The Royal Netherlands Notary Association (KNB) is currently developing a new financial regulation to better regulate compliance within the notarial profession. This is in anticipation of the BFT's recommendation that firms establish a compliance function. This is in line with creating an office culture where responsibility is shared among fellow civil-law notaries, junior civil-law notaries, and financial administration staff. The KNB also intends to include further rules in this regulation regarding the handling of third-party funds.

Information exchange
The KNB innovations are partly based on recommendations in the 2019 "Quality & Supervision Working Group Report" from the KNB and the BFT. In this report, both parties indicated how they can achieve more effective and efficient supervision through improved (digital) information exchange.

Other KNB actions
Earlier this year, the Royal Netherlands Bar Association (KNB) initiated even more initiatives. Effective April 1, 2021, the KNB appointed external regional confidential counselors to whom integrity issues and any notarial misconduct can be reported. Furthermore, the KNB is in consultation with the Ministry of Finance to enable 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.