May 19, 2014 – The standing working group compliance of the Federation of German Corporations’ General Counsel (Bundesverband der Unternehmensjuristen, “BuJ”) has proposed a draft bill on corporate compliance. The working group’s proposal comprises a general obligation to compliance for all companies that operate in Germany. Together with the widely known Professor for Criminal Law, Dr. Werner Beulke, German General Counsels thereby contribute to recent discussions on whether or not it is necessary to fit a Corporate Penal Code into the German legal order. The proposal capitalizes on a decisive system of “sticks and carrots” that is meant to induce companies to cooperate with law enforcement authorities. On the one hand, a general obligation to compliance should be integrated into the German framework of regulatory offences. On the other hand, companies that actively and cooperatively implement the decreed standards will be treated preferentially. An effective commitment to corporate compliance will be taken into account by law enforcement authorities when conducting necessary investigations. According to its authors, the proposal offers both a suitable regulatory framework for small and medium size companies and a high degree of legal certainty. Dr. Klaus Moosmayer (Chief Compliance Officer Siemens AG; Head of this BuJ-Working Group), who presides over the working group emphasized: “Any investment made by corporations in order to prevent and disclose economic offences needs to be recognized and appreciated by the underlying legal framework. Therefore, we propose that compliance mechanisms should be taken into account when determining monetary fines. Also, any voluntary disclosure of detected misconduct should be appreciated by means of immunity from prosecution in this respect.” Despite the fact that the proposal’s authors have – so far – merely added a new dimension to the lingering discussion on corporate legal responsibility in Germany, managers are well-advised to keep their eyes peeled: the current proposal carries momentum and might well bridge the gap between supporters of a clean-cut corporate penal code and those who strongly believe in sound governance structures at an intra-company level. Click here to read the draft bill.
Nicolai Behr is a compliance and dispute resolution attorney in Baker & McKenzie’s Munich office. He is a member of the steering committee of GlobalComplianceNews, a compliance news website with global reach moderated by Baker & McKenzie. He is a member of the committee "International" of the German Institute for Compliance. Dr. Behr is a regular speaker on compliance and white collar topics.