De Brauw Blackstone Westbroek N.V.
De Brauw Blackstone Westbroek New York B.V.
De Brauw Blackstone Westbroek London B.V.

Zuid-Hollandlaan 7
2596 AL The Hague The Netherlands
Telephone: (31-70) 328 5328
Facsimile: (31-20) 328 5325

Via e-mail:

Mr. Jonathan G. Katz, Secretary
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549-0609

Peter N. Wakkie - advocaat
Direct line: (31-70) 328 5328
Direct fax: (31-70) 328 5325

New York, December 18, 2002


Sarbanes-Oxley Act Section 307 - Implementation of Standards of Professional Conduct for Attorneys - Part 205 (File No. S7-45-02.wp)

Dear Mr. Katz,

I - Introduction

We are submitting this letter in response to the request by the U.S. Securities and Exchange Commission ("SEC") for comments on the SEC's proposed Part 205 of Title 17, Chapter II of the Code of Federal Regulations ("Proposed Rules"). The Proposed Rules would establish standards of professional conduct for attorneys who appear and practice before the SEC in the representation of an issuer.

We are a law firm of over 400 attorneys. Our firm represents a broad range of corporate clients from The Netherlands and other jurisdictions, including many companies that are listed on U.S. stock exchanges and have securities registered under the U.S. Securities Exchange Act of 1934. Our firm has offices in the Netherlands, New York and London. This letter is also sent on behalf of these offices.

The attorneys within our firm are all members of the Dutch bar. All offices - including those in New York and London - practice Dutch, Netherlands Antilles and Aruban law only. Accordingly, our comments focus on those aspects of the Proposed Rules that raise the greatest concern from the perspective of attorneys licensed to practice law in The Netherlands and either practicing Dutch law in The Netherlands or abroad ("Dutch attorneys"). Our comments chiefly regard concerns resulting from the applicability of the Proposed Rules to foreign and - thus - Dutch attorneys.

Below we will set forth our principal reasons to argue that the Proposed Rules ought not cover Dutch attorneys.

II - (Non-) applicability of Proposed Rules to Dutch attorneys

1. Anticipated wide application of Proposed Rules to Dutch attorneys

There is a substantial number of companies organized under the laws of The Netherlands that are - or over the next several years may become - issuers within the meaning of proposed Part 205.2(g). In addition, Dutch attorneys regularly advise issuers organized under U.S. (state) law or laws of other jurisdictions. Accordingly, the Proposed Rules would potentially apply to a large number of Dutch attorneys and to the relationship between those attorneys and their clients.

2. Principal reasons for non-applicability of Proposed Rules to Dutch attorneys

We believe the Proposed Rules should not apply to Dutch attorneys for the following reasons. First, the SEC ought not attempt to regulate the legal profession in countries other than the United States. Second, Dutch attorneys would encounter irreconcilable conflicts (of legal obligations) and could face disciplinary, civil and criminal sanctions under Dutch law if compelled to comply with the Proposed Rules. Third, the Proposed Rules would be unnecessarily disruptive to the Dutch client-attorney relationship. Fourth, the protection of investors would not be enhanced.

U.S. regulation of the Dutch legal profession would be contrary to principles of international comity

Historically, the regulation of the legal profession in The Netherlands has been the responsibility of the Dutch Bar Association (de Nederlandse Orde van Advocaten). The Dutch Bar Association was created pursuant to the Attorneys Act (Advocatenwet). It qualifies as a public body under section 134 of the Dutch Constitution (de Grondwet). Given the central role of the legal profession for the functioning of the court system in The Netherlands, the adoption of standards of professional conduct for Dutch attorneys has always been and should remain the exclusive responsibility of the Dutch Bar Association.

We believe it would be inappropriate for the SEC to seek to regulate Dutch attorneys solely because they may from time to time advise as to matters of Dutch, Netherlands Antilles or Aruban law on behalf of clients whose securities are listed on a U.S. stock exchange or traded on a U.S. inter-dealer quotation system or because they are in the process of conducting a public offering of securities in the United States. We therefore urge the SEC - in deference to long-standing principles of international comity - to refrain from attempting to exercise jurisdiction over the legal profession in The Netherlands or in other jurisdictions outside the United States.

Irreconcilable conflicts and disciplinary, civil and criminal sanctions for Dutch attorneys

If the SEC were to include Dutch attorneys within the scope of its final rules, such attorneys would be faced with two sets of clearly conflicting standards of professional conduct. The rules applicable to Dutch attorneys contain detailed provisions that apply when an attorney becomes aware that a client seeks to employ the services of the attorney in the commission of an illegal act. However, while these provisions contain safeguards to ensure that the attorney does not participate in the act, they do not permit the attorney to make a "noisy withdrawal" and notify third parties or regulators of the illegal act in breach of the attorney's duty of confidentiality to the client. Both section 46 of the Attorneys Act and the Code of Ethics (Gedragsregels) based thereon thus provide.

Furthermore, The Dutch Bar Association is unlikely to defer to the SEC's statements in the release containing the Proposed Rules that these preempt conflicting bar regulations on this point. Even if it would, the Dutch courts will likely hold such deference to be a violation of Dutch law, also because the Dutch attorney-client privilege is considered a matter of public policy. Moreover, a violation of the Dutch attorney-client privilege can result in disciplinary, civil and criminal sanctions against Dutch attorneys. Thus, if the Proposed Rules were adopted, Dutch attorneys would encounter irreconcilable conflicts of legal obligations as - in short - compliance with the Proposed Rules would yield a violation of Dutch law at the same time.

Unnecessary disruption of the Dutch client-attorney relationship

Dutch attorneys are subject to a comprehensive set of standards of professional conduct. These rules impose on attorneys - among other things - strict duties of loyalty and confidentiality to their clients. The purpose of these rules is to foster a relationship of trust between clients and their counsel and to enable clients to be candid in their dealings with counsel. The requirement that an attorney "noisily withdraw" from representation of a client in certain circumstances could have a chilling effect on the willingness of clients to confide secrets in their counsel. This would impair the ability of counsel to effectively represent their clients. It is exactly for this reason that the Dutch attorney-client privilege is strict (and arguably stricter than its U.S. counterpart), in that a waiver by a client does not necessarily invalidate the privilege. Before observing a waiver of the privilege, the attorney must first make his or her own assessment as to whether the public interest (algemeen belang) would -despite such waiver - require that the privilege be upheld. The factors to be considered by the attorney in arriving at this judgment include the effect of the waiver on the ability of those seeking legal advice to confide in their Dutch counsel without reservation. The Proposed Rules would hamper such candor and thus compromise the client-attorney relationship as established under Dutch professional rules.

No enhanced investor protection

The inclusion of attorneys licensed to practice in a foreign jurisdiction within the definition of "attorney" would not enhance the protection of investors. As drafted, the Proposed Rules would include Dutch attorneys who participate in the drafting of documents subsequently filed as exhibits to registration statements even if - as is typically the case - they have no participation in the review of the resulting filings.

This aspect of the Proposed Rules is particularly troubling because the vast majority of Dutch attorneys are not admitted to practice law in the United States, and - accordingly - have no background in or exposure to U.S. securities laws. As a result, they cannot reasonably be expected to detect violations of U.S. securities laws or U.S. fiduciary duties or make judgments regarding their materiality. Subjecting Dutch attorneys to the reporting and withdrawal requirements of the Proposed Rules will likely not increase the protection of investors. Besides, Dutch attorneys simply do not make determinations of this type under U.S. law at present, and instead typically refer such issues to U.S. counsel. Thus, imposing such duties on Dutch attorneys would also amount to redundant, and likely unproductive, regulation.

In this regard we note that the Proposed Rules do not define securities laws to mean solely U.S. securities laws, though such a reading of the term is implicit in the proposing Release. Especially since the definition of a material violation includes a violation "similar" to a violation of securities laws, it is uncertain whether a material violation of Dutch securities laws would also trigger application of the Proposed Rules. If such would be the case, then the subsequent query would be which Dutch laws actually qualify as "securities laws". Similar definitional problems arise with respect to a "breach of fiduciary duty", which is a common law concept. Besides, Dutch attorneys would not - as they would not in the event of a violation of U.S. securities laws - be able to assess whether the violation was in fact "material", as this standard would remain a U.S. legal concept.

In sum, we believe the responsibility for assisting issuers in the drafting of documents to be filed with the SEC and making materiality judgments is more appropriately assigned to U.S. counsel, especially as companies located in The Netherlands customarily employ the services of attorneys licensed in the United States and practicing U.S. law when they access the U.S. capital markets or make filings with the SEC.

III - Conclusion

For the reasons explained above, we strongly urge the SEC to exclude from the definition of "attorney" attorneys who are admitted, licensed or otherwise qualified to practice law outside the United States.

We would like to thank you for your attention to the above. If you have any questions regarding this letter, please feel free to contact us.

Sincerely yours,

/s/ Peter N. Wakkie