Can Flanders fine subsidy fraudsters €800,000 without a criminal trial?

The Flemish Government approved in principle on 4 September a draft decree that would let the regional administration impose fines of up to €800,000 for subsidy fraud when Belgium’s Public Prosecution Service closes a case or does not pursue it. Proposed by Flemish Vice-President Ben Weyts and Justice and Work Minister Zuhal Demir, both of N-VA, the reform would create a general subsidy offence within the Flemish Enforcement Framework Decree. It is not yet law: the Social and Economic Council of Flanders, or SERV, must first deliver its advice, after which the government can revise the text and send it to the Flemish Parliament.

For residents, companies and associations dealing with the Flemish administration, the immediate change is that returning wrongly obtained money may no longer settle the matter. Flanders already has powers to stop subsidies and recover improper payments. The proposed system adds a punitive sanction, allowing the administration to act even when a case never reaches a criminal judge. The maximum mirrors Article 691 of Belgium’s new Criminal Code, which took effect on 1 September 2026 and sets a ceiling of €800,000 when a false declaration results in a subsidy being received or retained.

The proposal follows the discovery of extensive abuse of the Flemish training-leave scheme. According to Demir, social inspectors recovered or blocked approximately €19 million in two investigations involving temporary-employment businesses, after subsidies were claimed for training that allegedly did not exist, was ineligible or was recorded during hours when workers were absent. The Brussels Times, reporting with Belga, said three other investigations in the temporary-work sector remained under way. The authorities have not published final findings for those cases, and allegations relating to unresolved files should not be treated as convictions.

The government’s argument is straightforward: recovery restores public money but does not itself punish deception. Its official decision says the new offence is intended to permit an “alternative administrative sanction” after prosecutorial dismissal or inaction. The approach also expands the powers of the Flemish Finance Inspectorate and its Enhanced Subsidy Supervision service, which audits beneficiaries. The same draft would introduce an integrity condition aimed at preventing subsidies from reaching people or organisations involved in, supporting or encouraging violent radicalisation, violent extremism or terrorism.

That second component makes the measure broader than a response to accounting fraud. It joins financial control with preventive public-order policy and therefore raises questions about evidence, proportionality and the boundary between administrative assessment and criminal adjudication. Those questions will matter to SERV’s employer and trade-union representatives, although the council had not published its position when this article was prepared.

Administrative punishment does not mean that recipients have no recourse. Under the existing Flemish enforcement framework, a person or business facing a sanction must be allowed to submit a written defence. A final administrative penalty can be challenged before the Flemish Enforcement Court within 45 days; the appeal suspends the decision, and the court reviews the case with full jurisdiction. The precise application of these protections to the new subsidy offence should become clearer when the full draft and explanatory memorandum are examined.

The measure is primarily Flemish rather than an EU initiative. It would govern subsidies within Flemish competence, while suspected fraud affecting the EU budget can also fall within the mandates of the European Anti-Fraud Office and the European Public Prosecutor’s Office. That distinction matters because the European Commission says national authorities jointly administer much of the Union budget under shared management. A Flemish investigation may therefore sometimes protect both regional and European funds, but the new decree would not replace EU-level investigations or prosecutions.

What happens next is procedural rather than immediate. SERV will assess the draft, the Flemish Government must grant final approval, and the Flemish Parliament must debate and adopt it before any new fines can be imposed. The central tests will be how officials calculate penalties up to the €800,000 ceiling, what qualifies as prosecutorial inaction and whether the integrity screening is defined narrowly enough to withstand legal scrutiny.