"Since the amended law became effective in November 2015 German bribery law covers even more business activities. Therefore, companies should train their directors and employees accordingly."
1. What is bribery?
The German Criminal Code differentiates between bribery in the public sector and in private business.
In the public sector, the law prohibits both payment to and receipt of bribes by public officials, persons entrusted with special public service functions and soldiers. Payments to a public official are generally prohibited regardless of whether or not the payment is for the purpose of receiving a benefit. This is to avoid any public misconception that payments to public officials derive benefits. An offence of aggravated bribery is established where the offence relates to a ‘major benefit’ or the offender continuously pays or accepts benefits and their purpose is the continued commission of such offences.
In the private sector, an employee or agent of a business must not demand, allow himself to be promised, or accept a benefit for himself or another person in a business transaction as consideration for according an unfair preference in the competitive purchase of goods or commercial services. The same applies to anyone who offers, promises or grants such persons a benefit in this context.
Private sector offences also fall under the law governing administrative offences that establishes liability in respect of a company’s directors as well as legal entities. Therefore, if an employee of a company bribes an employee or any public official while acting for the company, the company’s directors may be liable if they wilfully or negligently omitted adequate supervision. Liability may also attach to the company itself.
2. What are the exceptions/defences?
A business could avoid conviction under the corporate offence of bribery if it can show that there were adequate procedures in place designed to prevent active and passive bribery. For example, as there is an exception for gifts up to a certain value (up to approximately €50, but subject to a case by case assessment) a business should provide guidance in this respect.
3. What are the sanctions?
Criminal sanctions range from fines (the amounts depending on the perpetrator’s income) to imprisonment of up to three years and up to ten years for aggravated cases.
Administrative fines against the company can amount to up to €10,000,000. Fines against the proprietors of businesses, directors and other authorised representatives can amount to up to €1,000,000.