Dutch financial institutions are no longer allowed to invest in companies which produce, sell or distribute cluster munitions or important parts for it, Pensioenfederatie announced.

The investment ban on cluster munitions is laid down by law and is monitored by Netherlands’ Authority for the Financial Markets (AFM), the Dutch pensions association said.

The AFM uses an indicative list as a risk radar which has been adjusted in October as a result of the PAX report, Worldwide investments in cluster munitions.

Financial undertakings must take adequate measures to prevent them from carrying out transactions in companies that produce, sell or distribute cluster munitions or crucial parts of such weapons.

The ban applies to financial institutions established in the Netherlands, such as banks, managers, investment institutions, investment firms, pension funds and insurers.

The AFM will take action if companies are unable to explain why it has invested in a company which is subject to the prohibition. The AFM also takes into account that the list is not fixed and it is the investor’s responsibility to ensure that the investment prohibition in cluster munitions is complied with.

In case of violation of the prohibition, the AFM can impose a fine with a basic amount of €500,000, with a maximum amount of €1m, or file a declaration with the Public Prosecution Service.

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