On 15 August 2012 the German Federal Government adopted the draft bill to modernise foreign trade law. Amongst other things, significant amendments are being made to the criminal law provisions and to the regulation of fines; it is a part of the modernisation of foreign trade law stipulated in the Coalition Agreement. Closely linked to the amendment of the Foreign Trade Act is the revision of the Foreign Trade Ordinance [Außenwirtschafts-verordnung, AWV] which, for procedural reasons, is not the subject of the cabinet decision. The new AWV will, however, enter into force around the same time as the new AWG.
The primary aim of the AWG amendment is to “detox and simplify” foreign trade law. The majority of the simplifications are directed at the structure and terminology, however, as opposed to its actual contents. The terms of the applicable version of the AWG have increasingly veered away from legal reality over the last few years; not least also due to the activities of the European legislator.
Hence the draft summarises the definitions of key terms in one section (Sec. 2 AWG new version). Additionally, antiquated or unusual terms (for example “data processing programme” is now “software”) or definitions have now been brought into line with the European regulations. The anachronistic German term “Gebietsfremder” [alien] has been replaced with the commonly understood term “Ausländer” [foreigner]. This demonstrates the Federal Government’s intention to orient the draft bill towards practical requirements and make it more user-friendly.
The Act has also been considerably tightened as a whole, as can already be clearly seen from its reduction in size from 52 or 55 (depending on version you read) to 28 sections.
The basic concepts of German foreign trade law have not been affected, however. There are more profound amendments with respect to the sanctions envisaged in the event of violations of foreign trade law. Negligent violations of foreign trade law, the majority of which are currently pursued as criminal offences, are only to be punished as regulatory offences in future. Only the reckless infringement of a weapons embargo will still be classed as a criminal offence. This should duly accommodate for the complexity and the ensuing error-proneness of internal company export control. At the same time, the possible maximum penalties for deliberate violations are to be increased from five to ten years.
The Act expressly points out that an applicant’s lack of reliability can be taken into account in the authorisation process. Should the administrative authorities implement this in practice, however, this would be an even sharper sword than the sometimes moderate practice of criminal prosecution.
The constitutionally problematic – because not sufficiently specific – offence of dangerous interference [Gefährdungstatbestand] of Sec. 34 para. 2 AWG old version is being dropped, as well as the offence of encouragement [Fördertatbestand] of Sec. 34 para. 3 old version. In light of the provisions on aiding and abetting contained in general criminal law, it always seemed expendable in any event.
In some cases, the new criminal provisions are distinctly stricter. Section 17 AWG new version, for example, regulates an offence based on contraventions of weapons embargoes; this especially applies to deliveries of goods specified in Part I A of the Export List. These are now fundamentally qualified as criminal offences and not only upon fulfilment of the qualification criteria of Sec. 34 para. 6 AWG old version (for example a major disruption to the foreign relations of the Federal Republic of Germany).
The legal provisions have been tightened further with respect to the deliberate, unauthorised export of goods specified on the Export List. This also covers those goods of Part I C of the Export List which are only listed as subsets pursuant to current law. According to the applicable legal situation, the unauthorised export of dual-use goods is otherwise only punishable pursuant to criminal law if it simultaneously fulfils a qualification criterion of Sec. 34 para. 2 AWG old version, being otherwise classed as a regulatory offence. In case of merely negligent violations, however, these violations will also continue to be classed as regulatory offences pursuant to the new law.
The draft contains an important clarification as far as economic sanctions of criminal legal relevance imposed by the EU are concerned. The criminal law provision of Sec. 18 para. 1 AWG new version quite clearly refers to the publication of these sanctions in the Official Journal of the European Communities. Hence, publication in the German Federal Gazette [Bundesanzeiger] is no longer relevant. This closes a gap which has always existed to date in the period between the publication in the Official Journal on the one hand and the publication in the German Federal Gazette on the other. That it is the European publication organs which fulfil the constitutionally required publicity requirement has been established by the Federal Constitutional Court [Bundesverfassungsgericht, BVerfG] in another context.
How the Cabinet decision will emerge from the legislative procedure remains to be seen. According to press reports, the Opposition has already announced its objections in advance. It will also be of particular interest to see which amendments are envisaged for the Foreign Trade Ordinance, since this contains provisions of far greater practical relevance. Since the Foreign Trade Ordinance is “only” a legal ordinance, its amendment does not have to pass through the parliamentary legislative process.