German Federal Supreme Court confirms essential principles relating to the burden of rendering evidence and proof in corruption cases

A secret agreement on taking and giving bribes in order to gain an unfair advantage in the purchase of goods or services is illegal and punishable under Sec.299 of the German Criminal Code (Strafgesetzbuch). It is commonplace for bribe payments to be included in inflated price calculations in the sale of goods or services. In this instance, the company paying such inflated prices is entitled to claim damages against the individual agreeing to the bribe, as well as the business paying the bribe. In its decision of 18 January 2018 (file.no I ZR 150/15) the German Federal Supreme Court (Bundesgerichschof) found that in the context of a claimant's burden of proof, it is sufficient for the claimant to prove the existence of reasonable indications that a bribe agreement was reached. The Federal Supreme Court also emphasised that there is no need for further substantiation and it is for the defendant to disprove that an agreement was reached (so-called sekundäre Darlegungslast). Where the defendant is not successful in proving the absence of a bribery agreement, the claimant's assertions are deemed to have been acknowledged by the defendant (Sec. 138 (3) of the Code of Civil Procedure, Zivilprozessordnung).

ECJ: Purpose of protecting the financial interests of the EU and the financial markets may justify limitations of the "ne bis in idem principle" in cases of duplication of criminal and administrative proceedings

The "ne bis in idem principle" provides that a person cannot be criminally prosecuted or punished twice for the same offence. This fundamental right is recognised by the Charter of Fundamental Rights of the European Union (Art. 50), the European Convention on Human Rights (Art. 4 of Protocol No. 7), the Schengen Convention (Art. 54) and can be found in national law. In its rulings dated 20 March 2018 (cases no. C-524/15 and C-537/16, joined cases no. C-596/16 and C-597/16) regarding four Italian cases, the European Court of Justice (ECJ) was requested to interpret the "ne bis in idem principle" in situations of duplication of criminal proceedings/penalties and administrative proceedings/penalties of a criminal nature in the context of the VAT directive and the directive concerning financial markets. The Court held that such a duplication of proceedings/penalties against the same person with respect to the same act constitutes a limitation of the "ne bis in idem principle" that requires a justification. The objective of guaranteeing the integrity of the financial markets of the EU and public confidence in financial instruments is capable of justifying such a duplication.

The ECJ ruled that national law authorising such a duplication of criminal proceedings/penalties and administrative proceedings/penalties of a criminal nature must satisfy four requirements:

  • It must pursue an objective of general interest and the proceedings/penalties must pursue complementary aims relating to different aspects of the same unlawful conduct at issue.
  • It must establish clear and precise rules allowing individuals to predict which acts or omissions are liable to be subject to such a duplication of proceedings/penalties.
  • It must ensure that the proceedings are coordinated in order to limit the additional disadvantages resulting from the duplication of proceedings.
  • It must ensure that the severity of all of the penalties imposed is limited to what is strictly necessary in relation to the seriousness of the offence concerned.

According to the ECJ, national legislation that allows administrative proceedings of a criminal nature to be brought with respect to the same acts which have already been the subject of criminal conviction that appears to punish the offence in an effective, proportionate and dissuasive manner, exceeds what is strictly necessary in order to achieve the objective of protecting markets. Moreover, where there exists a final acquittal in relation to the criminal offence, the act of bringing proceedings for an administrative fine of a criminal nature infringes the "ne bis in idem principle". Such proceedings, according to the ECJ, clearly exceed what is necessary in order to achieve the objective of guaranteeing the integrity of the financial markets of the EU and public confidence in financial instruments.

Deutsche Boerse faces potential fines for not updating the market on its CEO search

Germany's financial markets watchdog, BaFin, is investigating whether Deutsche Boerse, the German stock exchange operator, should have provided more information to investors during its search for a new chief executive. Under German law, companies listed on an exchange are required to report in a timely fashion, any information that may affect share prices. Failure to do so may result in a fine of up to 2% of a company's annual revenue, which in the case of Deutsche Boerse stands at 48 million euros. BaFin is investigating whether Deutsche Boerse ought to have publicly disclosed that a personnel committee on the supervisory board had narrowed its CEO search to two candidates on 13 November 2017. On 16 November 2017 the company announced Theodo Weimer as its new chief executive officer.