Media reports of an increase in the number of public contracts awarded to companies involved in white collar crime have triggered intense public debate. As a result, there has been significant discussion regarding the introduction of a nationwide corruption register, in which any natural person, corporate entity or business partnership could be registered as unreliable. This would allow tenderers, applicants and potential contractors to make enquiries before a tender was accepted and would effectively combat and prevent further white collar crime.
White collar crime − particularly corruption − constitutes a significant problem for the state, the economy and society. According to Federal Criminal Police Office statistics, in 2012 losses reached €3.75 billion.
The justice ministers of the German federal states have recognised the need for action and discussions were held at the 85th conference in Rugen.
The Central Exclusion Database established by the European Commission was established on January 1 2009. All legal entities that no longer receive financial resources from the European Union because they have committed misdemeanours or criminal acts that adversely affected EU financial interests are to be recorded in the database. This information is available to all public agencies that administer EU financial resources.
Germany has no national and centralised database, although some legislative steps towards this have been taken in the past.
At federal state level, some corruption registries have been introduced, but in at least six of 16 federal states (Brandenburg, Mecklenburg-Vorpommern, Saarland, Sachsen, Sachsen-Anhalt and Thuringen), no corruption registries exist. In North-Rhine-Westphalia − which has one of the strictest anti-corruption laws − and Berlin, positive experience has been gained. Anti-corruption legislation has been shown to be more effective than criminal or trade law penalties in combating economic crime in the area of granting public orders.
Agencies that pursue criminal acts and infringements must communicate any registrable statutory violation directly to the competent information agency. The contracting authorities must report any exclusion from order placements. The affected companies will be informed that they have been registered, but must file an application to obtain detailed information about the content of the registration.
Registration can threaten a company's economic existence if it depends on orders from the public purse, as the recordal of unreliability leads to the risk of exclusion.
Nationwide corruption register
As the number of national and EU tenders increases, the justice ministers have consistently taken the view that existing state-level regulations are insufficient to ensure adequate security against unreliable companies. Therefore, they have requested that the federal government establish a national register to encourage and guarantee fair competition, as well as to protect the state, taxpayers and honest companies from losses.
The common Hamburg and Schleswig-Holstein register is considered to be the model to follow when establishing a nationwide register. An essential consideration is the motivation for companies to introduce convincing compliance measures. In addition, the register will offer the possibility of deleting registered data quickly in case of recovered and proven reliability.
As yet, there have been no conclusions as to which offences may be registered and whether registrations can be made before criminal or administrative fine proceedings have been concluded. This request will be transferred to the finance, interior and economic ministers, and the proposal will be examined in detail.
It is expected to be some time before a national register replaces existing state-level regulations. Nonetheless, experience has confirmed the need for such a measure to ensure adequate protection and fair competition. The common position can be taken as evidence that a national corruption register will be given the green light, and that legislative change is sought by all parties. Positive influences can be seen, particularly in the case of federal states with no register.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.