Investments in solar energy and the prevention of money laundering: growing concern for municipalities
Recent research shows that a number of Dutch municipalities are concerned about the origin of the cash flows and investments in the renewable energy sector, and in particular with regard to solar energy projects.
The scope (and enforcement) of laws and regulations in the field of the prevention of money laundering and the financing of terrorism is increasing all the time, which means that more and more people and companies have to meet the requirements imposed by, among others, the Dutch Money Laundering and Terrorism Financing Prevention Act (Wet ter voorkoming van witwassen en financieren van terrorisme, the Wwft). Expanding the scope of AML laws and regulations carries the risk that alternatives will be sought to, among other things, launder money. Municipalities have reason to believe that the solar energy sector could offer a possible alternative. This suspicion stems from the enormous increase in solar energy projects and the involvement of (foreign) investors in such projects.
An increasing number of municipalities is now screening developers of solar parks for integrity and the expectation is, as appears from an article that was recently published in Het Financieele Dagblad, that this trend will continue in the coming period. For this purpose, municipalities make use of their powers based on the Integrity Assessment by Public Administration Promotion Act (Wet bevordering integriteitsbeoordelingen door het openbaar Bestuur, the Bibob Act).
The Bibob Office is responsible for conducting the screening and, at the request of the municipality in question, investigates whether there may be an integrity risk in the granting of, for example, a permit. In such a case, the integrity risk could consist of misuse of the license, by offering investors (consciously or not) the opportunity to launder money.
Screening developers (and possibly investors) can have an impact on solar projects. Not only because of the time, and therefore delay, that such screening entails, it can also result in licenses not being granted or possibly revoked.
Developers have to prepare for possible screenings
It is therefore becoming increasingly important for developers to prepare for a possible screening under the Bibob Act and to take this into account when planning and selecting and approaching potential investors. Preparation can take place, for example, by preparing clear cashflow overviews and expectations, including information on the origin of the moneys and actively screening potential investors.
Our specialists can advise you about your rights and obligations and can assist you in dealing with Bibob requests. In addition, our specialists can advise you on your obligations under the Wwft and other integrity legislation, both nationally and internationally. They can also guide you and assist you in the selection of investors.