(No) Necessity for a Corporate Criminal Code

The German conference of justice ministers is intent on introducing a corporate criminal code (Unternehmensstrafgesetz) in order to fight white-collar crime. The legislative initiative, promulgated by North Rhine-Westphalia, is expected to follow shortly. Although currently existing laws should be sufficient to fight white-collar crime, the implementation of compliance systems will become a necessity in the near future.

The current criminal law in Germany only applies to individual persons; juristic entities / persons can only be prosecuted pursuant to the German Administrative Offences Act (Ordnungswidrigkeitengesetz; “OWIG”). This provides for the imposition of fines with a maximum amount of EUR 10 million. Several German states are seeking to change this situation by means of the aforesaid legislative initiative, not least for compliance reasons.

The Current Legal Situation

While antitrust law provides for the imposition of substantial fines on corporations (equating to up to 10% of the group turnover), in terms of criminal law such penalties can only be imposed by way of the confiscation of unlawfully acquired gains in addition to the imposition of the fines described above. Internationally, the United States as well as other Member States of the European Union have laws in place that provide for the imposition of substantial penalties on corporations.

Proponents of a corporate criminal code argue that the current system does not provide for any incentives to avoid the commitment of white-collar crimes. This argument does, however, disregard the fact that the public prosecutors’ office is permanently looking to recruit experts for this area, and is constantly expanding same. In addition, an increasing number of compliance structures is being implemented. The Munich Regional Court I also recently handed down a decision to the effect that managing directors would be personally liable if they failed to establish an adequate compliance system. 

The Necessity for a (New) Corporate Criminal Code

The German Federal Bar Association (Bundesrechtsanwaltskammer) points out that the damages caused by white-collar crime decreased from an amount of approximately EUR 4.3 billion to approximately EUR 3.4 billion between 2006 and 2008, and that the  success rate of 91% in solving such cases is significantly higher than the overall rate. The Association does accordingly not believe that a corporate criminal code is needed.

Public prosecutors currently avail themselves of the possibility to impose monetary fines on the basis of §§ 30 and 130 of the OWIG, although only up to the permissible maximum amount of EUR 10 million. In addition, profits may be confiscated pursuant to § 73 of the German Criminal Code (Strafgesetzbuch; StGB), with the effect that fines can be increased to have teeth, even for large companies. Certain special areas of law, such as environmental, capital markets and antitrust law also already provide for very comprehensive measures to fight legal violations, including the dissolution of the concerned company (which, in turn, has unfortunate consequences for its employees).

In addition, managers of corporations have been subjected to a sharply increased liability exposure risk in recent years. There does thus not appear to be any enforcement deficit in the area of corporate criminal law. It is also argued that a corporate criminal code would deviate from the fundamental German legal principle that only natural persons can be held liable. Finally, there exist constitutional legal concerns about the introduction of a corporate criminal code.


It would appear that appropriately staffing public prosecutors’ offices with qualified personnel and specialists is a more effective way to fight white-collar crime than a new corporate criminal code, which would for all intents and purposes only really codify already existing and available remedies. In addition, the amounts of the fines imposed on large companies could be increased.


The legislator and the courts have long made it clear that they will continue to prosecute white-collar crime. Regardless whether through a new corporate criminal code, by appropriately staffing public prosecutors’ offices, or by increasing fines and expanding compliance systems, the avoidance of white-collar crime will remain an important matter.

Managers and corporations can only avoid risks if adequate systems are in place to discover, pursue and avoid statutory violations. Therefore, companies that could potentially violate laws during their operations or in the supply chain should implement appropriate compliance systems. The maintenance of business connections with countries where corruption is prevalent, and the conclusion of contracts with governments, or consulting agreements with bank accounts in offshore jurisdictions (such as the Cayman Islands), are frequently indicators that a compliance system should be urgently implemented.

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