Stronger penalties and extended legislative scope are the major features of recent changes to the global anti-corruption landscape.

An international consensus is emerging on the kind of conduct that is criminalised, while important variations remain in the scope and emphasis of national laws. Most nations exercise jurisdiction beyond their borders to cover corrupt acts committed in other states by individual residents. A number of regimes allow for the prosecution of local organisations whose foreign subsidiaries commit bribery offences.

This table(1) answers key questions on this vital area of business law in Germany.

Criminal Code

Private sector

Public sector

Offence

Sections 299 and following of the code

Where someone promises or grants the employees or agents of another company or third party a financial or other benefit in return for the latter treating his or her company preferentially in relation to other competitors without an appropriate reason. The same applies to employees or agents of a company which asks for or accept such benefits.

Sections 331 and following of the code
Where someone promises or grants a holder of office (ie, a judge, civil servant or any person holding public office who performs public administration tasks at a public authority or other body) a benefit in order to convince him or her to perform an illegal act or act within his or her authority.

The bribe

Is there a presumption that any benefit was given or received corruptly?

No. However, inappropriate or unusual benefits may lead to preliminary investigation and conviction.

No. However, advantages given or received in connection with the exercise of office constitute a bribe (Section 331).

Would facilitation payments be caught?

Yes.

Yes.

Would corporate hospitality be caught?

Yes. Depends on the intent and on whether the benefit offered is socially adequate (ie, a reasonable benefit which does not have the potential to improperly influence the decision).

Yes. Depends on the intent. However, it is significantly lower threshold than in private sector.

Is there any de minimis?

No.(2)

No.(3)

Does the bribe have to be monetary?

No.

No.

Public officials

Does the offence apply only to bribing public officials?

No.

Yes.(4)

Acts performed outside Germany

Can bribery performed outside Germany be caught?

Yes.

Yes.

Does the act also need to be illegal in the foreign country of performance?

Yes.

Yes.

Who can be liable?

A German national?

Yes.

Yes.

A German company?(5)

Yes.

Yes.

A German partnership (including limited liability partnership)?(6)

Yes.

Yes.

A director of a German company?

Yes, if he or she is implicated in the act of bribery or in cases of neglect of corporate duty to avoid criminal acts.

Yes, if he or she is implicated in the act of bribery or in cases of neglect of corporate duty to avoid criminal acts.

A German company, if the bribe is committed abroad by its foreign subsidiary?(7)

Yes.

Yes.

A foreign subsidiary of a German company, if the bribe is committed abroad?

No.

No.

A foreign national, company or partnership,(8) if the bribe is committed in Germany?

Foreign national - yes.

Foreign company or partnership - yes.

Foreign national - yes.

Foreign company or partnership - yes.

A foreign national domiciled or ordinarily resident in Germany, if the bribe is committed outside Germany?

Yes, if caught within Germany and not subject to extradition.

Yes, if caught within Germany and not subject to extradition.

A foreign company or partnership, if the bribe is committed abroad?

No.

No.

Penalties

Penalties include:

Individuals:

  • Fines and/or imprisonment (up to five years) in case of conviction. An occupational ban may also be imposed on wrongdoers.
  • Directors, board members and officers - fines (up to €1 million) in case of insufficient organisation, instruction and supervision.

Companies:

  • Fines (in principle up to €1 million - fine may be higher if benefit derived from bribery exceeds €1 million - this is the exception rather than the rule).
  • Debarment of companies from tendering for public contracts.
  • Confiscation of benefits derived from bribery.

Individuals:

  • Fines and/or imprisonment (up to five years) in case of conviction. An occupational ban may also be imposed on wrongdoers.
  • Directors, board members and officers - fines (up to €1 million) in case of insufficient organisation, instruction and supervision.

Companies:

  • Fines (in principle up to €1 million - fine may be higher if benefit derived from bribery exceeds €1 million - this is the exception rather than the rule).
  • Debarment of companies from tendering for public contracts.
  • Confiscation of benefits derived from bribery.

Defences

Are there any defences available?

No.

No.


For further information on this topic please contact Markus Schoner at CMS Hasche Sigle by telephone (+49 40 37 63 00), fax (+49 40 37 63 040 600) or email (markus.schoener@cms-hs.com).

Endnotes

(1) This table is part of a more comprehensive guide that includes other jurisdictions. For a preview of the guide see www.cms-hs.com/CMS_Guide_to_Anti-Bribery_and_Corruption_Laws_0713.

(2) Low-value gifts are not subject to criminal prosecution. Generally, in the private sector gifts and invitations with a total value of €35 are considered adequate.

(3) Low-value gifts are not subject to criminal prosecution. In the public sector small gifts with a total value of €5 are considered adequate.

(4) Employees, officers or directors of privately operated companies who perform public functions may also be considered as public officials.

(5) Even though legal entities are not subject to criminal prosecution in Germany, they can be ordered to pay substantial fines - confiscation of benefits derived from bribery.

(6) Depending on the individual circumstances.

(7) Depending on the individual circumstances.

(8) Even though legal entities are not subject to criminal prosecution in Germany, they can be ordered to pay substantial fines.

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