The coalition treaty, which the new German federal government finally agreed on 14 March 2018, provides for changes in the sanctioning of companies for economic crimes.
In contrast to many other legal systems, corporate criminal law has not yet been enshrined in German law, with there currently being no means of imposing a criminal penalty on a corporate body. Therefore, companies can currently only be sanctioned with fines by means of offences contrary to administrative law. In recent years, there have been several initiatives to change this. The wording of the new coalition agreement is in part reminiscent of a bill drafted by the North Rhine-Westphalian Ministry of Justice in 2013. Much remains rather vague in the agreement, but some concrete projects can still be found.
For example, according to the new government’s plans, the public prosecutor's office will be obliged to initiate investigations against companies if there are appropriate indications. This means a development from the actual administrative offences law towards criminal procedure. In addition, the upper limit for fines for large companies is projected to no longer be fixed at EUR 10 million in absolute terms, but to be based on the respective company turnover. Furthermore, the law is to enshrine requirements for internal investigations.
As a result of globalisation, German companies already have considerably more comprehensive compliance systems than provided for under German law, e.g. in order to comply with UK Bribery Act or US Foreign Corrupt Practices Act. It is important that German law not only adapts to international standards, but also creates clear regulations for companies and that German politics make an effort to combat economic crime.
We will provide further updates as these proposals progress.