What does the prosecution of Damen mean for the Dutch defense industry? And three other questions

Shipbuilder Damen Shipyards and three (former) board members must answer to the court for suspicions of bribery, money laundering and forgery, the Public Prosecution Service made Friday known. What exactly does it play there? Four questions about the upcoming criminal case at the billion -dollar group.

1 What exactly does Damen do?

The largest shipbuilder, Damen Shipyards from Gorinchem, is the main supplier of the Dutch Navy. The Werf that Kommer Damen (now 81) took over from his father in 1969 has grown into a multinational with a turnover of more than 3 billion euros and more than 12,000 employees on 35 recruiting worldwide. On those yards, Damen builds and maintains commercial fishing boats, yachts, patrol ships, tugboats, expedition ships, amphibious transport ships and also larger warships.

In the Netherlands this happens, among other things, on the Scheldtwerf in Vlissingen, who took over the company in 2000 and thus saved from ruin. There, Damen (or does the reduction of) large frigates, corvets and supply ships. For the past two years alone, the Ministry of Defense ordered four command and air defense fees, two support vessels and two ‘submarine fighting fighters’, worth billions.

Germany has six frigates in order at Damen worth a total of 7 billion euros

Other countries also buy warships at Damen. For example, Germany has six frigates in order worth 7 billion euros. Portugal bought a multifunctional Dronecarrier, Australia bought the design from eight transport ships, which will be built locally. Damen again grabbed a tender for four submarines for the Dutch Navy. That order went last year to the French Naval.

2 What problems did they end up in?

Fiscal Investigation Service FIOD invaded Damen Shipyards in 2017. At the time, the suspicion focused on the trading agents who hire Damen to sell ships abroad. They received towering committees – but what did they do with that money?

Research from NRC in 2018 and 2019 To Damen Shipyards it turned out that there was dubious sales practices in Sierra Leone, which the World Bank also did research. It also turned out that the company had sent an agent in Indonesia away for suspicions of corruption in the sale of warships.

The company was also in conflict with an intermediary in Trinidad and Tobago, who could not justify the millions he received from Damen. Damen Shipyards also appeared to have delivered the wrong data to Atradius DSB fourteen times, the insurer who issues risky export policies on behalf of the state. That came the company not to be on sanctions.

The criminal investigation eventually lasted eight years. Damen and the OM conducted discussions about a possible settlement last year, but new revelations were cycling through it. Last year published de Volkskrant About new corruptions, News hour revealed that Damen might have violated sanctions against Russia. The conversations between the OM and Damen were stranded, according to both parties on the initiative of the other. Now the OM has decided to continue the company.

3 Was the business stop also involved in the suspect practices?

Justice believes so. According to the Public Prosecution Service, Damen board members gave ‘factual’ management of the prohibited behaviors for years, it says in the press release that it went out on Friday morning. In addition to Kommer Damen, his son (and current chairman of the board) Arnout Damen and former chairman of the board René Berkvens are prosecuted. A former commercial agent, Stephen Hobson, also belongs to the suspects, according to sources around the investigation.

It is striking that in addition to the company, individual directors are also prosecuted. The Public Prosecution Service will then have to prove that they were directly involved in prohibited actions, such as the alleged bribery of officials abroad, or at least knew about those practices and did not act against them. In earlier controversial matters it turned out to be often difficult for the OM to prove this « factual leadership. »

For example, the judiciary decided the former ABN AMRO company stop at the end of last year after almost four years of research anyway unprecedented For violations of the anti -money laundering legislation, due to insufficient evidence. Also for the persecution of former-in boss Ralph Hamers (for the same offense) pale According to the OM, not sufficient evidence.

4 What does a possible conviction of Damen mean for the Dutch defense industry?

Those who are convicted of bribery or fraud may not deliver to the Ministry of Defense in Europe-a mooring image for Damen, now that the defense spending in Europe is strongly increased. The Procurement Act on Defense and Security Area states that a company that has been convicted on appeal for bribery, fraud, terrorism financing or money laundering may not register for tenderings for four years.

A company still has a way out after that. If it can prove that it has taken ‘sufficient measures’ to ‘demonstrate reliability’, a government may choose to let a company participate in a tender. An example: reimbursing damage, cooperating in investigation, ‘personnel measures’ to prevent criminal offenses in the future.

Should it come to that, participation in tenders for Damen is at least a lot more complicated. That is difficult for the Dutch government. The Ministry of Defense has traditionally been working closely with Damen and buys large -scale equipment in it.

The lawsuit, which is expected to start this fall, can become a political issue now that Europe wants to arm rapidly

« We only took note of the OM’s decision today, » said a spokesperson for the ministry in a response. « We still have to get to know what this can mean for us. »

A conviction can also have consequences for the rest of Europe. It is precisely in the coming years that the continent wants to invest hundreds of billions in armament and it was expected that the Netherlands could play a role in the Netherlands.

The lawsuit, which is expected to start this fall, can thus become a political issue. Damen takes that sentiment into account. In a statement, the company says that « Damen prefers to focus his attention only on the strengthening of the Dutch maritime sector and contributing to combating the defense bodies that the current geopolitical situation entails » than having to defend themselves against « suspicions of the OM ».

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