Minimizing criminal law risks in corporate transactions
In the case of company takeovers, mergers or investments, the focus is usually on the financial, tax and commercial review of the target company. However, an often underestimated but essential part of the due diligence process is criminal due diligence – the targeted assessment of potential criminal law risks. Here, criminal law risks and other compliance risks are specifically investigated. Careful criminal due diligence thus helps companies to avoid unexpected legal risks and financial losses.
After all, anyone who acquires a company often also takes on its risks and liabilities – including any criminal “legacy issues”.
Criminal law risks in corporate transactions – why criminal law due diligence is essential
Criminal law violations within a target company can have serious consequences for the buyer or the investors. If such due diligence is neglected, there is a risk of criminal investigations against the company after the transaction has been completed:
- Criminal investigations against the company
- Reputational damage and economic losses
- Fines, asset recovery or civil liability
- Reclaims from unlawfully obtained benefits (e.g. due to corruption offenses)
What criminal law risks are examined?
In a criminal law due diligence, we specifically analyze risks in the following areas, for example
- Corruption offenses – Does the company violate anti-corruption laws such as the German Criminal Code or international regulations (FCPA, UK Bribery Act)?
- Money laundering & tax evasion – Have financial transactions or accounting practices been used to conceal illegal funds?
- Fraud / embezzlement – Is there evidence of fraudulent business practices, insolvency fraud or accounting irregularities?
- Sanctions violations / export control – Has the company possibly violated national or international embargo regulations?
- Criminal labor and environmental law – Are there any criminally relevant violations of environmental regulations or labor rights?
Criminal due diligence: Legal Certainty in Corporate Acquisitions
Conducting criminal due diligence requires specialized expertise in commercial criminal law. In contrast to general due diligence audits, which are often carried out by tax advisors or auditing firms, the identification and assessment of criminal law risks requires a very specific and in-depth legal analysis.
Our law firm offers companies, investors and investment companies tailor-made criminal law due diligence. This plays a central role in Mergers & Acquisitions (M&A) transactions in connection with white-collar criminal law.
Our range of services includes:
- Detailed criminal law risk analysis of the target company
- Assessment of the possible consequences for acquirers or investors
- Recommendation of specific measures to minimize risk
- Support in contract negotiations to protect against legal consequences
- Advice in the event of suspicions or ongoing investigations
Protect your investment – let us advise you
The early identification and strategic assessment of criminal law risks in corporate transactions can make the difference between the success or failure of a takeover or investment.
A comprehensive criminal risk analysis can identify potential violations of commercial criminal law (e.g. corruption offenses, accounting offenses, money laundering or fraud) at an early stage.
Our expertise in the field of criminal due diligence enables a well-founded assessment and targeted protection – before unexpected consequences such as criminal investigations, fines or reputational damage occur.
Contact us for an individual consultation – we will support you in making your investments legally secure.
