Minister Adriaansens (EZK) informs the House of Representatives about the progress Datavisie Handelsregister and also gives a 1st indication of the future financing of the Trade Register.
With this letter I inform your Chamber about the progress of the Datavisie Handelsregister. As promised in the Data Vision Progress Letter of last June, I also provide herewith a first indication of the future financing of the Trade Register (HR) (1). The HR is an important source of information for doing business safely and responsibly.
In doing so, the interests of security and privacy of registered entrepreneurs must be taken into account in a balanced way. Therefore, the Data Vision took shape in an intensive process with stakeholders. This has led to a supported proposal consisting of eight measures. The proposed measures are summarized in the overview below and explained in more detail in the Data Vision measures annex.
I have carried out an exploration of the future financing of the HR, based on the premise that provision of HR data will be free of charge. Thereby, in principle, a covering financing should be established without an increase in the state contribution. To provide for cost recovery, I intend to introduce an annual fee for registrants in addition to the initial registration fee, increased to €75 as of 2023. The exploration shows that an annual HR contribution in the order of €25 per entity on average will provide a stable financial base for the HR.
For buyers of HR data, I propose a differentiated policy. Occasional buyers will receive HR extracts, piece by piece, completely free of charge. This will include technical limitations to prevent abuse. To large customers, who use data links, I want to impose an access fee for the HR instead of a tariff for delivered HR data. For now, a range between about €2,500 and €50,000 annually for different groups of (very) large users seems realistic. The amounts are based on the costs that KVK expects to incur for realizing customized connections for this limited but diverse group that includes approximately 650 customers.
This may involve working with a limited number of tariffs, for example, based on customization aspects in technology or data selection. Stricter privacy rules and conditions of use will be introduced. Decision-making on the annual contribution and the access contribution must be in line with the entry into force of EU regulations on High Value Data Sets in 2025. You will find a further explanation of the intentions in the annex Financing Data Vision. In addition, I take this opportunity to inform your Chamber about the progress on the shielding of address data in HR when there are personal security risks. The amendment to Section 51 of the Commercial Register Decree 2008 (HRB), which provides the formal basis for this shielding, came into effect on December 15.
KVK has been implementing the shielding of address data at the request of the entrepreneur since spring at my behest, in connection with demonstrable or probable security risks. The need to provide this protection even in anticipation of formal regulations was prompted by developments such as the coarsening of social debate and greater security risks than in the past.
The Data Vision aims to provide a policy framework for the honest use of Trade Register data for the benefit of society. In particular, the challenge is to achieve a workable balance between the privacy interests of persons registered in the HR on the one hand and the interests of legal certainty and fraud resistance on the other. To best meet the wishes and needs of public and private stakeholders, the data vision process was designed as an interactive policy-making process. The steps involved and the accompanying reports can be viewed on the government website for Internet consultations (3).
The data review process produced a stakeholder-validated policy proposal consisting of four measures that provide more privacy for individuals registered in the HR and four measures that ensure legal certainty and anti-fraud function of the HR. Below is the status of each measure. The implementation of the proposed measures requires both legislation and adjustment of the implementation practice, including IT, at the Chamber of Commerce (KVK), with very different implementation times. The costs involved in the necessary IT modifications cannot be properly estimated at this time. The proposals for adaptation of Hrw and Hrb will be provided in due course with an implementation test and a cover proposal.
Non-disclosure of phone numbers and email addresses
The unwanted approach of entrepreneurs by commercial and other parties is an important driving force behind the Data Vision. The implementation test for the recent amendment of the Telecommunications Act, which allows approach by digital means only in the case of existing relationships or after prior permission, shows that although the number of complaints about this has decreased, it still remains a source of annoyance for entrepreneurs. I am therefore working with KVK on the next step to combat the misuse of telephone numbers, email addresses and fax numbers. This will entail that the aforementioned contact information for all persons and entities will no longer be visible as public data in the HR. This will require an amendment to the Commercial Register Act 2007 (Hrw) and the Commercial Register Decree 2008 (Hrb). After the amendment of the Act and the Decree, these data will only be viewable by parties designated by law, such as administrative bodies, lawyers, bailiffs and notaries. To minimize the lead time of implementation, KVK will make the necessary preparations for this in parallel with the legislative process to be started. My aim is to publish the proposal for the legislative amendment for consultation before the end of 2023.
Registration of sole proprietorships with public mailing address
The registration options for sole proprietors are modified in that sole proprietors can choose to shield the physical business address. The requirement for this is that the entrepreneur has registered a public postal address in the HR. The registration then proceeds in a manner similar to a foreclosure under Section 51 Hrb. This would require an amendment to the Hrb. My aim is to submit the proposal for this amendment to the Raad van State before the summer of 2023. However, your Chamber has explicitly mentioned the urgency, with which I agree, of strengthening privacy protection especially for self-employed persons. Because at KVK the necessary process is already in place under the Art. 51 Hrb procedure, in anticipation of the entry into force of the amended regulations, this possibility is also already being offered for sole proprietorships that do not invoke security risks.
Foreclosure CoEs
VvE foreclosure requires adjustments of a completely different nature than the foreclosures of contact and address information discussed above. This is related to the fact that the address information is often incorporated in the name of the CoE. In addition to changes in the applicable regulations, this presents the necessary technical challenges. It is even conceivable that these can be most effectively addressed by placing the CoEs in a register other than the HR. Because there is no strong urgency for this component, especially compared to some other measures, it will be implemented at a time to be determined.
Curtailing commercial use of HR data
The HR Data Vision takes the next step to combat undesirable use of HR data and associated privacy violations. Specifically, only government parties with a statutory task (and statutory oversight) and parties authorized on the basis of a socially relevant task specifically designated by law will be able to view protected and non-public data. Other market parties only get access to the public data from the HR that can be retrieved free of charge. In case of detected misuse, KVK will have the authority to refuse delivery. Registered parties retain access to their own registration. The provision of data from the HR must always be traceable to a legal purpose. The Hrw names these purposes, including promotion of legal certainty (art 2a Hrw) and provision of data to promote economic interests (art 2b Hrw). In particular, the broad description in Section 2b has the unintended effect that KVK currently has insufficient possibilities to set limits on undesirable use of HR data. The future legal framework should take into account what different customers actually need and for what purpose. Explicitly attaching conditions to the use of Trade Register data may be helpful in enabling a system of provision that is both user-friendly and secure. This will require an amendment to the Trade Register Act, for which I aim to publish a draft for consultation before the end of 2023.
In the meantime, pursuant to applicable privacy regulations (AVG) and advice from the Autoriteit Persoonsgegevens , KVK itself, as manager and processor of the Trade Register, must take measures to prevent the misuse of public personal data. KVK therefore periodically tests all its information products against the AVG. KVK must prevent the misuse of personal data as much as possible without affecting the legal publicity and accessibility of the Trade Register. This may result in HR products and data contained therein being adjusted in 2023.
Separate attention deserves the so-called publication obligation as contained in article 24 Hrw. Based on EU regulations, KVK was obliged to publish certain changes in the HR. Initially this was done in the Government Gazette and more recently through the KVK website. This provides a flow of information with a lot of personal data, which are now used in many ways due to the far-reaching digitalization. KVK receives many complaints about this, for instance because of the (re)publication of those personal data on many other websites. As a result of recent changes in European legislation, this publication obligation has lapsed. Therefore, I will also delete the relevant article from the Trade Register Act. I will include this in the already mentioned intended amendment of the Hrw. However, I have asked KVK to work towards phasing out the publications as soon as possible in anticipation of the change in the law in 2023. This is preferably still to be achieved in 2023.
Registration board bans
The registration of board bans involves KVK registering and publishing board bans imposed by the court after the judgment has become final. Malafide directors are already barred from formal board positions for the duration of the ban. The public registration will also mean that they will soon not be able to interfere in business unnoticed as de facto directors. In practice, they do this now, often using cat catchers in the role of formal director. In the list attached to the HR, anyone can check free of charge whether a professional and/or management ban applies to a natural person and for what duration. For the purpose of this registration, an amendment to the HR was prepared some time ago. Now that the validation of the Data Vision policy proposal indeed shows that there is generous support for this regulation, I will take it forward as soon as possible. I aim to submit it to the Raad van State before the summer of 2023.
Expand authorizations for socially relevant tasks In the short term, a number of government organizations or organizations with statutory tasks will be authorized to search the HR by natural person and to view non-public data. An amendment to the HR that regulates this is already in preparation; I aim to submit this proposal to the Raad van State before the summer of 2023. For the longer term, there is much need for access to protected data, including from private parties who have a duty under the Money Laundering and Terrorist Financing (Prevention) Act (Wwft) or meet another social need of general interest. This will be part of the already mentioned amendment of the Hrw to adjust purpose limitation and access.
Strengthen gatekeeper role KVK
The strengthening of the KVK's gatekeeper role will consist of a series of measures that jointly contribute to legal certainty, fraud resistance and crime prevention. I have asked KVK to make proposals for tightening the review at the time of registration and other moments in the "customer journey" of a registered entity. For example, I have instructed KVK to explore, in cooperation with chain partners such as the Council for the Judiciary, the desirability and feasibility of a systematic check of the Central Curate and Guardianship Register (CCBR) and the Central Insolvency Register (CIR) upon mutation of the HR. The exploration should show in 2023 whether an automated link can contribute to the prevention of undesirable situations, such as the registration of persons under guardianship or receivership without the consent of the administrator or curator. In addition, in 2023 KVK intensifies the (digital) checking of and research on addresses in general, and specifically where the establishment of businesses is not directly logical. This could include the address of a government agency, of a homeless shelter or a building where a striking number of establishments are registered. In the event that such an address is used, additional proof may be requested before completing registration. In extreme cases a decision can be made to refuse a registration. For the longer term, it is being examined jointly with stakeholders whether there would be added value if the mutation of data or filing of documents in the HR were to become a necessary condition in the creation of certain legal facts, rather than an obligation after the fact (4). This following the example of the registration of transactions in the Land Registry. The gatekeeper role of KVK is further involved in the Action Plan on Safe Entrepreneurship and in the Program on Tackling Undermining in which I cooperate with my counterpart in the Ministry of Justice and Security and other members of the Cabinet. In time, new issues and tasks may arise from this that will be implemented under this heading.
Feedback of (suspected) incorrect data
The mandatory feedback means that government agencies that are required to use the HR are also required to report when they find something in an authentic data in the HR that creates a discrepancy with their own information. This feedback results in a visible notification in the HR that the data in question is 'under investigation'. So other customers can also see that there may be incorrect data. The first implementation agreements for mandatory feedback on authentic data are in preparation with the Tax Administration. It is expected that the Tax and Customs Administration will be the first party to be designated in the first half of 2023. As a result, Section 32 of the Hrw can enter into force, after which a six-year period will commence in which all authorities that are required to use the Trade Register will also be required to report back.
The KVK Annual Accounts 2021 show that € 229 mln in costs were incurred, of which € 148 mln related to the registration task. The remainder of the budget (€ 81 mln) relates to public tasks such as information and consultancy, which are mainly paid for by the government. These costs are covered by € 145 mln in government contributions, € 57 mln from HR information products, € 17 mln from registration fees and € 18 mln from export documents and other revenues (a total of € 237 mln resulting in a modest recovery of reserves). As already explained in the December 2021 Data Vision Letter, funding HR with revenues from information products, based on the profit principle, entails a number of disadvantages, the most important of which I will briefly recall here (5). Especially large, private purchasers of HR data experience an incentive and revenue model through the fees to recoup can costs by reselling HR data. This mechanism seems to contribute to dissemination of, among other things, address data that KVK no longer has control over, but is held responsible for. And EU regulations, such as the mandatory publication of free High Value Data Sets starting in 2025, leave less and less room for charging for HR information products.
Eventually, therefore, KVK will have to move to providing public data from the Trade Register free of charge - but with the necessary privacy safeguards. In order to deal with the financial consequences of this, a new financing structure will be required in which a number of preconditions must be met:
Any behavioral incentives emanating from the new structure must be compatible with the purposes the HR serves and with adequate privacy protections for individuals registered in the HR.
There must be a robust system where the intended contributions to costs cannot be easily evaded and that is sustainable in light of foreseeable future (EU) policies.
Implementation costs should be reasonably proportionate to the revenue to be generated.
I recognize four alternative sources of funding that in combination should lead to covered funding. Increasing the state contribution is one of these alternatives. Until further notice, the indicative funding proposals do not include an increase in the state contribution because it transfers costs to the treasury and thus to taxpayers. For two of the three other options, namely the annual contribution from subscribers and the access contribution from customers, the proposals quantified below are, for the time being, in the nature of an exploration. The aim here is to establish whether, and if so with what order of magnitude of tariffs, a balanced coverage proposal can be put together.
Enrollment fee
The first element of the new financing system that has now been established is the enrollment fee. A one-time enrollment fee of €50 has existed since 2014. This has been indexed in recent years and set at €53.10 as of 2022. For 2023, the registration fee has not only been indexed but increased to €75. This fee does justice to the work done by KVK around the registration of a new entity in the HR. This increase was planned for 2022, but has been postponed for a year in order to have more visibility on the elaboration of the data vision before making a decision on this. I intend to continue to include this enrollment fee in the regular indexation.
Annual Trade Register fee
An annual contribution from registered entities does justice to the work KVK does to ensure the accuracy and timeliness of the HR. The periodic contact moment created by an annual contribution helps to guarantee the accuracy and topicality of data. It creates a natural moment for entrepreneurs to evaluate whether their registration is still necessary and the data is still correct. Non-response to attempts to collect the contribution is also a relevant signal in this regard. Moreover, an annual contribution constitutes a very robust cost recovery. Given the very large number of entities enrolled in the HR, even a relatively modest contribution provides adequate cost recovery. An annual contribution averaging, say, €25 per entity would be sufficient to cover the financial impact of a zero rate on HR data. No behavioral effects on the use of HR data are expected from this tariff. Some degree of differentiation of the rate around the mentioned average is possible to do justice to different types of enterprises and legal forms. Given the modest size of the contribution, it is important to keep the implementation costs at KVK as low as possible. This means, among other things, that non-payment should not lead to collection procedures. It is possible, however, to consider that in the event that, after several attempts to contact an entrepreneur, the Chamber of Commerce deregisters a company from the HR if this leads neither to a response nor to payment. It can then be assumed that the company is no longer active. Of course, the underlying regulations will provide room for applying the human measure in the implementation by the Chamber of Commerce.
Access fee
The data provided from the HR will become free so that the price incentive to resell will be removed. Occasional customers, who are currently still limited to 25 consultations per year, can use public HR data completely free of charge. Here technical limits are used to prevent scraping and excessive take-up. Responses in the data vision study showed that entrepreneurs find it unfair when they have to pay for an HR extract relating to their own company. In the short term, provision is made for the possibility of requesting a limited number of extracts relating to one's own company free of charge each year. In the future, this need will be met through data governance facilities that will also allow registrants to share their own HR data with third parties. Large buyers of HR information will pay a fixed amount for their connection (possibly differentiated into a limited number of rates, for example, according to customization aspects in technology or data selection). For now, a range from €2,500 annually for a few hundred large users to €50,000 annually for the 50 or so very largest customers seems realistic. Because customers receive more data specifically tailored to their needs than they do now, data minimization is promoted, which also discourages transfer to third parties. The free provision of data does justice to the open data approach. This is, however, subject to stricter conditions of use, with a view to the privacy of registered users. For public users, it makes sense that this access fee could replace the current input financing (6).
Implementation of new system For 2023, coverage has been found for the short term with the increase of the registration fee and a call on KVK's own capital. During the course of the year, coverage proposals for 2024 and subsequent years will be developed, with the exploration of alternative funding sources as outlined above showing that a balanced coverage is possible with reasonable fees. Introduction of the new system must keep pace with the adjustment of laws and regulations, whereby the extent to which I have control over the timeline decreases significantly after the time of submission of proposals. I will therefore continue to keep you periodically informed of progress.
Parliamentary paper 32761, no. 240
Apartment owners' associations
https://www.internetconsultatie.nl/datavisie
In the concrete case, this concerns the preconditions for setting up a central registration of shares, but also when forming partnerships or registering a turboliquidation, it can be considered whether such a mechanism contributes to greater legal certainty and transparency
Parliamentary Record 32761, no. 204
Input funding was extended in 2022 for another 3-year period (2023-2025), so for public customers, the new system basically goes into effect on 1-1-2026.
