Criminal Defence for Companies and Managing Directors in Germany

Therefore, we strongly recommend contacting a German criminal defence lawyer as early as possible. The sooner the necessary defence strategies can be worked out, and the sooner a criminal defence lawyer can take legal action during the criminal proceedings, the less damage will be caused by the criminal proceedings. An experienced and assertive criminal lawyer is proficient in dealing with the German public prosecutor’s office and court and can achieve the best legal outcome for affected companies and directors. Often, those responsible first approach an investigation cooperatively to emphasise that they have nothing to hide. This is not necessary and carries significant risks for the outcome of the proceedings.

To avoid the scenario of criminal proceedings from the outset, a criminal lawyer can work out detailed preventive strategies and measures with you. As a neutral person, independent of the company, they can focus entirely on compliance with German criminal law when providing advice.

In German criminal law, the principle “societas delinquere non potest” applies – the company cannot commit delinquency (i.e., make itself liable to prosecution or commit an offence). According to this principle, legal persons are incapable of acting or committing a crime and are therefore not liable to prosecution. Companies with the structure of a legal entity – e.g., as a GmbH or AG – cannot commit offences under the German Criminal Code (StGB). Thus, there are no criminal proceedings against them under the German Code of Criminal Procedure (StPO).

In cases of suspicion concerning a company, German criminal law only provides for the punishment of natural persons who have acted or decided on behalf of the company in a way that is attributable to German criminal law. However, the fact that companies are not liable to prosecution does not mean that they cannot be subject to any other sanctions or remain unaffected by criminal proceedings against their managing directors. In Germany, tax, administrative offences and criminal procedure law offer a variety of possibilities for clearly noticeable sanctions against companies.

On the one hand, Section 30 of the German Act on Regulatory Offences (OWiG) offers the possibility of imposing a fine on legal persons or associations of persons. To do so, a person with a managerial function (e.g., the executive board or a partner authorised to represent the company) must have committed a criminal offence or misdemeanour by which the company’s duties have been violated or by which the company has been or was to be enriched. The fine can be up to five million euros in the case of a negligent offence and up to ten million euros in the case of an intentional offence.

On the other hand, if investigations are initiated against the management or employees in the company, the company is not spared from investigative measures – such as the search of business premises or the seizure of essential documents and servers. The company’s business premises are often core locations for law enforcement. In addition, business operations are disrupted by questioning employees, press presence and extensive reporting. In addition, there is the danger of insolvency if business accounts are frozen during the investigation, and thus the financial basis of the company’s existence is lost. Further sanctions, such as fines, profit skimming and forfeiture of the profit generated by the violation of the law as well as external and internal costs for proceedings, claims for damages, and reversals, can be added. If a company is dependent on the award of public contracts, exclusion from these following criminal or administrative offence proceedings may constitute a further severe sanction.

Current developments in the discussion on the expansion of sanctioning possibilities for companies show that the principle mentioned above of the punishability of companies is losing its validity. For a long, consideration has been given to whether and how the legislature can create a legal basis for punishing entire companies.

Currently, the German Federal Ministry of Justice has published a draft for a “Law to Strengthen the Integrity of the Economy” intending to place the sanctioning of associations whose purpose is directed towards an economic business operation on an independent legal basis. They are to be subjected to the principle of legality – i.e., the public prosecutor’s duty to prosecute all criminal acts. The law also plans to create an improved, flexible set of sanctioning instruments for prosecuting authorities and courts. In return, compliance measures are to be promoted, and companies are encouraged to cooperate to solve company-related criminal offences through internal investigations.

This draft clearly shows that investing in preventive measures to ensure compliance with what is legally possible in corporate transactions will continue to be worthwhile. After all, acting within the legal framework is essential for sustainable, long-term and successful corporate management in Germany.

At Schlun and Elseven, we support you with a range of services our qualified and experienced lawyers provide in all matters of German corporate criminal law. Our expertise ranges from clarifications of legal frameworks, preventive measures and compliance to defence in criminal proceedings. Successful and professional legal advice must be tailored to your company’s circumstances. Detailed cooperation based on trust is the foundation for this.

Having a qualified German criminal lawyer at your side in the run-up to criminal proceedings can save much time and allow for a quick defence if preliminary proceedings occur. Our German criminal lawyers are familiar with the interests and peculiarities of the company, know its structures and can therefore act remarkably quickly. In the preparatory stage, we offer German criminal law advice to the management, executives, and employees and draw up prevention strategies. We report on the latest changes in the law and court rulings affecting the company’s interests and create the necessary awareness of conduct relevant to criminal law in Germany.

In addition, our expertise on preventive measures, especially in compliance, includes the following activities:

• Advice on the establishment, monitoring and further development of a modern compliance system tailored to your company’s needs,
• management system to protect against liability and fine risks,
• long-term support for company management,
• forecasting for future company projects and advice on monitoring mechanisms,
• employee training,
• legal advice on risk management,
• legal assistance in internal investigations,
• information on legal developments.

These protective measures are intended to avoid, as far as possible, an investigation by the public prosecutor’s office in the company. Should it nevertheless come to the point that investigations are initiated against your company, we will ensure that the process is lawful. We file the necessary appeals, support you during incisive search measures and coordinate contact with the press. We offer individual defence for managing directors and board members for the main proceedings. We also act as witness counsel for company employees in court. In addition, we look after the company’s asset interests by defending against forfeiture orders and recovery aids and taking care of the release of detained assets.