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Corporate defence

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At their autumn conference in November 2013, German Ministers of Justice met to discuss the “introduction of corporate criminal liability” in Germany. The question whether corporations can themselves be prosecuted for criminal offences is a perennial topic of debate. Other European countries in particular recognise that there is such a thing as corporate criminal liability. German criminal law, in contrast, links the principle and concept of guilt to an individual’s conduct. It may not be possible to identify such personal conduct in the actions taken by a corporation. It needs to be shown that a particular person acting in the company has been criminally culpable.

The State of North Rhine-Westphalia has now taken the initiative and proposed adopting a corporate criminal code (Verbandsstrafgesetzbuch). Corporate fines and penalties are being considered as sanctions. Corporate fines of between 5-360 daily rates may be imposed on companies. A corporate warning and deferment may be issued of the kind stipulated in section 59 of the German Criminal Code (StGB) if it appears likely that the company will be able to make structural improvements. This means that any existing compliance structures will need to be revised. Potential penalties may include exclusion from public subsidies or public contracts and, as a last resort, judicial dissolution.

There is a great deal of scope for corporate criminal liability of this kind. The intention is to apply corporate criminal law to corporate malfeasance of all kinds whenever a company’s “decision-maker” commits a corporate criminal offence Criminal sanctions may also be applied if supervisory duties are violated.

There are many different approaches which a defence strategy could take in this area. One special case, for example, is when criminal investigations are launched against an individual decision-maker.

This legal institution should not, however, be confused with the current legal situation in which companies are liable for administrative offences.

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