Corporate Criminal Law - Fighting Corporate Crime
- Created: 26 August 2019
The draft bill of the Federal Ministry of Justice (BMJV) has arrived. After years of intensive discussion, the detailed draft law has now been published. It represents nothing less than a revolution in sanctions law for companies and other associations. Those who believed that the many skeptical discussions of recent months would lead to a more restrained draft have now learned better. Federal Minister of Justice Christine Lambrecht added the pity phrase “The honest must not be the fool” alongside the draft’s publication in the press (SZ v. 22.8.19). From a political point of view, this draft bill can only be achieved through a fundamental amendment of the sanction system for companies. Presently, it can only be surmised what business people will have to adapt to in the future.
What is clear is that the public prosecutor's office will always (have to) investigate. Fine proceedings, in which criminal investigations have rarely been initiated to date, will in future instead require prosecutors to investigate initial suspicions, the so-called principle of legality. In addition, a company will be equated with a defendant - with rights, but also with obligations. In the future, a company will be essentially "forced" to investigate itself. Though this sounds like an innovation beyond imagination, it is not quite as hopeless as that. Yet only a company which carries out a comprehensive internal investigation of itself in the event of suspicion can hope for a mitigated sanction. The level of mitigation through such good conduct should erase any doubts of whether to do so or not: A halving of the possible financial sanction and prevention of the company’s dissolution should be incentive enough.
The Ministry has understood that money is the freedom of the company. Therefore, future sanctions shall not be limited to € 5 million (for negligence) or € 10 million (for intent). Sanctions of up to ten percent of a company’s worldwide annual turnover shall be set, representing a fundamental change in scope. An association sanction will also no longer require any culpable action on the part of the company. In the future, an association-related offence will not only mean punishment for the individual actor, but also for the company. The BMJV expects 15,000 convictions per year. All those involved will have to bear heavy burdens. Of course, the recently widened asset skimming powers will continue independently.
In addition to direct financial damage, companies will be also threatened by another indirect economic risk that is difficult to quantify: the entry into an association sanctions register. And finally public notification, to the detriment of many parties, will be possible - the pillory of modern times.
The new role of the accused company will bring challenges to criminal defense. In the future, companies must be properly defended by experts in the field.