Construction criminal law offences also include more traditional business crime activities, including bribery and corruption allegations and fraudulent activity. At Schlun & Elseven Rechtsanwälte, our business criminal lawyers give clear advice relating to these offences under German law, whereby we outline how to detect and prevent such activity from occurring but also provide legal defence should allegations arise. Our lawyers provide guidance on implementing fraud risk assessments.
Corruption & Bribery
The construction industry is one of the industries most impacted by corruption and bribery, and therefore consulting with expert legal advise is necessary. Under German law, corruption can be divided into two groups based on their respective protective purpose. The official offences of §§ 331 (“accepting benefits”) to § 335a StGB (“foreign and international officials”) protect public confidence in the integrity and, in particular, the non-corruption of the public service. The offences of corruption and bribery in commercial transactions under §§ 299 and 300 StGB form part of criminal law on economic offences. Corruption offences carry the possibility of prison sentences or a fine. The offence of bribery can carry a sentence of up to five years.
For those involved in commercial transactions, it is § 299 StGB that regulates bribery in this context. According to § 299, paragraph 1, no. 1 StGB, anyone who, in the course of business dealings as an employee or agent of a company, allows themselves to be promised or accepts an advantage for themselves or a third party in return for unfairly favouring another in domestic or foreign competition when purchasing goods or services (corruption) is liable to prosecution.
Corruption and bribery in business dealings are punishable by a prison sentence of up to three years or a fine. In particularly serious cases, the penalty is increased to a prison sentence of three months to five years (§ 300 StGB).
Fraud under German Law
Fraud under German law is defined under § 263 German Criminal Code (StGB). It states that it is committed, “[w]hoever, with the intention of obtaining an unlawful pecuniary benefit for themselves or a third party, damages the assets of another by causing or maintaining an error under false pretences or distorting or suppressing facts incurs a penalty of imprisonment for a term not exceeding five years or a fine.” Furthermore, according to paragraph 2, the attempt of fraud is also punishable. In simple terms, the offence requires the following characteristics:
- A deception about facts (actively or by omission),
- An error on the part of another based thereon,
- A disposition of property by the mistaken person,
- A disposition of property by the erring person,
- Intent and intention to enrich.
The construction industry is heavily impacted by fraud, with some of the most common types of fraud included human resources, procurement fraud and accounting fraud, and cybercrime. The majority of fraudulent activity in the construction and engineering sector occur due to internal actions. Although this may seem concerning, mitigating such risks by implementing internal policies and controls is easier than facing outside threats. Conducting fraud risk assessments and implementing suitable whistleblower procedures are valuable assets for companies looking to combat business crime activity. At Schlun & Elseven Rechtsanwälte, our team is ready to advise your company in such matters.