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Corporate Defence

“Corporations cannot make themselves liable to prosecution” – this is a regularly voiced critique regarding the planned introduction of a corporate criminal code in Germany (see, for instance, the failed Corporate Sanctions Act – VerSanG).

However, there are already a variety of business-related sanctions under current law that may require effective counsel from an experienced corporate defence lawyer:

Through so-called “confiscation” pursuant to § 73 StGB (so-called “asset seizure”), benefits resulting from criminal offences can also be seized from the company itself. A typical case is the seizure of profits from contracts obtained through corruption.

This seizure can already be secured at the beginning of investigation proceedings by seizing accounts (cf. § 111e StPO). Particularly for small and medium-sized companies with low equity, this often poses an existential threat, even though this risk is often overlooked – and can therefore even devolve into a criminal offence of delaying insolvency.

Finally, corporate fines are increasingly being imposed in accordance with § 30 OWiG if company-related obligations have been breached by employees. This breach of obligations can consist of bribery, for example, but also inadequate compliance measures (code of conduct, training, whistleblower system).

These regulations come into full force through § 17 Abs. 4 OWiG, according to which the fine should exceed the economic advantage gained by the offender – even beyond the standard framework of fines. This has already been demonstrated in a spectacular manner by the imposition of a fine of € 201 million against Siemens AG by the Munich I Regional Court in October 2007.

It is to be expected that §§ 30, 130 OWiG will increasingly be used as a “substitute” for the frequently demanded corporate criminal code.

The serious consequence of a corporate fine is that, as a rule, it is entered into the central trade register (cf. § 149 Abs. 2 Nr. 3 GewO) or in special corruption registers (“black lists”) of the federal states or in the competition register established by the Federal Cartel Office in accordance with the Competition Register Act (WRegG) and thus carries the loss of public sector contracts in its wake.

In light of these serious consequences, it is obvious that the company has its own interests – which must be distinguished from those of the accused employees – and that these interests must be protected by a corporate counsel versed in criminal law.

This is ensured, for example, by means of an official company statement that may serve to counter the accusations in factual and legal terms. A frequent objective of the defence is to avert reputational damage by avoiding a main trial in a coordinated approach with the defence lawyers of the accused employees (“collaborative defence”). If a trial cannot be avoided, the company lawyer will exercise all the rights and options of an individual defence lawyer on behalf of the company involved.

Both lawyers have a proven track record in corporate defence.

Dr. Pragal has contributed his experience in corporate defence in the chapter “Strategische Unternehmensverteidigung” [“Strategic Corporate Defence”] in the handbook “Richtiges Verhalten in der Compliance-Krise” [“Correct Behavior in a Compliance Crisis”] (1st edition 2023; ed.: Dr. Philipp Engelhoven).