The law as it stands provides that crimes committed by company associations (i.e. legal persons and associations of persons) may result in the fining of management personnel and/or the company itself. Such fines can be extremely high, with any gains confiscated.
Nevertheless, the legislator holds that this form of sanctioning of so-called corporate crime is no longer sufficient nor up to date. The maximum permissible ceiling of ten million euros for a fine levied as a penalty on an association under current law governing administrative offences is “not a serious sanction against financially powerful multinational corporations” and even disadvantages small- and medium-sized companies. The requirement is for “legally certain incentives for investment in compliance” (initial draft from the Federal Ministry of Justice and Consumer Protection, draft of a law to strengthen integrity in the economy).
New register for “naming and shaming”
With the introduction of the VerSanG [Association Sanctions Law], the legislator aims to punish corporate offences in future by means of criminal penalties. Sanctions are to be based upon the turnover arising from business operations. Crimes committed under the auspices of the company in breach of the duties incumbent upon the association (so-called “association offences”) are to be attributed to the association. Misconduct will be recorded in a register of association sanctions that will be kept alongside the federal central register, the central commercial register, the competition register and the corruption register of the federal states (the pillory effect, or “naming and shaming”).
In future there must be a separation between the advising and the representing of companies: those carrying out internal company investigations may not at the same time act in defence of the association.
The law governing administrative offences remains applicable, e.g. where there is a breach of the obligation of supervision pursuant to section 130 OWiG [Administrative Offences Law] and if the infringement is due to inadequate organisation or supervision and thus does not constitute a fully criminal offence.
Klötzer-Assion can advise and defend companies of all sizes.