Corporate criminal law

Corporate criminal law stipulates the sanctions against legal entities for misconduct of their executives.

Under the current legal framework, companies cannot make themselves liable to prosecution. However, they can be sanctioned with fines if legal representatives or senior executives violate their duties. If investigations are initiated, not only alleged misconduct of the natural persons involved is examined. Increasingly, the focus of interest is on whether the company has taken sufficient measures to effectively prevent violations of the law. For some years now, case law has recognised an effective internal compliance system as an important factor in the calculation of a fine.

For several years, there has been a debate about whether the current legal framework is sufficient to combat corporate crime. In contrast to most other economic nations, German law does not yet recognise the original criminal liability of legal entities. However, times are changing. In particular, the facts that have recently come to light in the financial sector (including “Cum/Ex”) or the automotive industry (“diesel scandal”) have redefined thinking.

Since April 2020, a draft law has been available from the Federal Ministry of Justice and Consumer Protection. The “Act to Strengthen Integrity in Business” places the sanctioning of companies on an independent legal basis. At its centre is the so-called Act on the Sanctioning of Company-Related Offences (VerSanG). This law provides for, in particular, the following innovations:

• Instead of the previously provided regulatory fine, a monetary criminal sanction or a warning with reservation of sanction will be introduced.
• The amount of the sanction for intentional offences is up to € 10 million. If the company has an average annual turnover of more than € 100 million, the sanction can amount to up to 10% of the average annual turnover. The worldwide turnover shall apply.
• Company sanctions can be publicly announced in a register according to the principle of “naming and shaming”.
• Internal investigations should lead to a mitigation of the sanction. In addition to full cooperation with the investigating authorities, this requires in particular that the principles of fair trial have been observed by the company.
• Compliance systems will be taken more into account as an assessment factor when determining sanctions.

We represent and advise companies comprehensively in connection with official investigations. As corporate lawyers, we handle communication with the prosecution authorities and coordinate the defence of legal representatives and employees. We have extensive procedural experience in defending against company-related sanctions and in introducing effective compliance structures. We regularly cooperate with auditing companies and IT forensic experts in this regard.

Increasingly, companies themselves are becoming victims of criminal conduct. On the one hand, employees might commit offences like embezzlement, breach of trust or violation of business secrets. On the other hand, crimes are committed by external third parties. We provide support in investigating the facts of the case. And we represent the interests of the company vis-à-vis police and investigation authorities or courts. We file criminal complaints and cooperate with specialized civil law experts to recover assets.