The discussion about the introduction of a specific criminal law for enterprises (“Unternehmensstrafrecht“) has been on and off the political agenda for several years, although it was rather quiet for the last year. Now, the Coalition Agreement of the (not so recently any more) sworn federal government resumes this discussion and envisages a comprehensive revision of the sanctioning law for enterprises.
Until now, German criminal law does not yet know the culpability of enterprises as such and in particular of companies. Accordingly, the most threatening sanction for companies lies in the area of the Administrative Offences Act (Gesetz über die Ordnungswidrigkeiten, OWiG). According to §§ 30, 130 OWiG sensitive fines can be imposed on corporations, as the imposition of a fine of 395 million Euro against the Siemens AG in 2008 (here) exemplifies. Due to further recent scandals “rocking” the economy (see last about Airbus, here) politicians now perceive the instrument of administrative offence law as inadequate and outdated.
The new Federal Government therefore intends to implement new regulations (see Coalition Agreement, p. 126) which are based on various initiatives from the past few years, such as the Draft Bill of a “Penal Code for Enterprises” of the State of North Rhine-Westphalia from September 2013 (see my comments here and here (in German)), the Draft Bill of an “Association Sanctions Act” presented by the Research Group on Association Criminal Law at the University of Cologne in December 2017, a proposal of the Federal Association of Company Lawyers and corresponding preparatory work by the Federal Ministry of Justice (Bundesministerium der Justiz, BMJ) from the last legislative period.
The Coalition Agreement now contains concrete guidelines for the future work of the BMJ on a “Criminal Law for Enterprises”: For example, the legality principle, i.e. the compulsory duty to prosecute, normally inherent to the (general) Penal Code, shall replace the principle of opportunity as currently applicable in the administrative offence law, i.e. that the decision to actually start prosecution is in the in the discretion of the administration. Furthermore, the scope for financial sanctions shall be considerably increased compared to the one previously provided for in the OWiG – namely for companies with an annual turnover of more than 100 million euros to up to ten percent of their respective turnover. Such a sanction could easily go into the billions – and endanger the existence of the company. Furthermore, “the sanctions should be made public in a suitable way” according to the Coalition Agreement (known as “naming and shaming” – a previously unknown principle in German law).
Finally, the new government wants to “provide legal incentives to provide information through “Internal Investigations” and subsequent disclosure of the findings obtained (to the official authorities)” and “provide a legal framework for “Internal Investigations”, in particular with regard to confiscated documents and house and office search options to create legal certainty for all parties involved.” Especially the latter seems to be really necessary in view of the expected decision of the German Federal Criminal Court on the public prosecutor’s search of offices of a law firm in the wake of the VW-scandal (see here, in German).
Even if it seems to correspond with the zeitgeist to constantly bash the economy for perceived or actual wrongdoings, from a legal point of view many arguments can be put forward against a specific criminal law for enterprises. One argument is based on the so-called “guilt principle” (Schuldprinzip), according to which no one may be convicted without being guilty in the criminal sense. But since “guilt” always presupposes a voluntary element – which a company as a purely legal entity cannot have – a “specific criminal law for enterprises” would constitute an alien in German law. There is also some risk that criminally liable managers could somehow hide behind a company’s criminal liability. Precisely because of the aforementioned zeitgeist, however, it may safely be assumed that politicians will push aside these and other concerns, and that companies will have to prepare for the passing of a specific criminal law for enterprises in this legislative period. In order to avoid future criminal liability or at least to alleviate criminal liability, companies should therefore constantly improve their compliance measures (see the corresponding commentary on a recent court decision (BGH, judgment of 9.05.2017 – 1 StR 265/16) here, in German).