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Corporate Criminal Law

Last Update: 05. Sep 2025

Definition and Nature of Corporate Criminal Law

Corporate criminal law is a subfield of criminal law that deals with the criminal liability of companies, that is, legal entities or their liability for sanctions for unlawful acts within the course of business operations. The central issue is the conditions under which companies, as collective actors, can be held responsible for criminal offenses and subjected to sanctions. Corporate criminal law is of great practical relevance for business operations, as organizations can be held liable for violations by individual members due to their division of labor and hierarchical structures.

Development and Legal Foundations

International Developments

While many countries, particularly Anglo-American legal systems such as the United States, the United Kingdom, France, or the Netherlands, have long recognized the direct criminal liability of companies, Germany’s approach to corporate criminal law has traditionally been characterized by restraint. Anglo-American countries apply the so-called ‘Corporate Criminal Law’ or ‘Corporate Liability,’ which exposes companies directly to punishment or sanctions.

Developments in Germany

In Germany, ‘actual’ corporate criminal law has not yet been expressly regulated in the German Criminal Code (StGB). Companies themselves are not generally subject to criminal law under § 1 StGB, as only natural persons can be perpetrators of criminal offenses (‘nulla poena sine persona’). However, legal entities and associations of persons can be held liable under administrative offense law (§ 30, § 130 OWiG) (so-called corporate sanctions law). In Germany, the term ‘corporate criminal law’ is therefore used to refer in particular to the law of sanctions against companies, which concerns contributions to an offense, breaches of supervisory duties, or organizational failures.

Scope of Application of Corporate Criminal Law

Affected Legal Forms

Corporate criminal law covers all legal entities under private law (such as stock corporations, GmbHs, registered associations), unincorporated associations of persons (such as general partnerships, limited partnerships), and in some cases also public-law entities. Differentiation according to legal form does not take place; what matters is that a punishable act is committed by the company as an organizational unit, or that a violation occurs as a result of inadequate organization, supervision, or controls.

Types of Offenses and Models of Liability

Sanction options under corporate criminal law exist in connection with numerous types of offenses, for example:

White-collar crimes (fraud, embezzlement, bribery, antitrust violations)
Environmental crimes
Labor offenses (violations of working time or occupational health and safety regulations)
Violations of data protection or product safety

Corporate criminal law often focuses on the organizational responsibility of management personnel, particularly targeting deficiencies in compliance management and in the fulfillment of control and supervisory duties.

Sanctions System and Procedure

General Information on the Sanctions System

Corporate criminal law recognizes various sanctions that can be imposed on companies. In Germany, administrative measures under the law of administrative offenses (§ 30, § 130 OWiG) take precedence, including in particular:

Fines against the company (up to ten million euros, or more if based on turnover)
Confiscation of economic advantage (‘forfeiture’)
Corporate-related ancillary consequences (e.g., exclusion from public contracts)

In an international context, for example under US law, further-reaching sanctions are possible, such as dissolution of the company (‘Corporate Death Penalty’), revocation of licenses, publication of sanctions, or extensive supervisory requirements.

Requirements for Sanctioning

Sanctioning requires that

a company’s management or managing body commits an intentional or negligent criminal offense/administrative offense from which the company derives a benefit (§ 30(1) OWiG), or
a breach of supervisory duty within the meaning of § 130 OWiG (‘organizational fault’) is present.

Sanctions do not necessarily require that the company knew about the offense. What is usually decisive is whether legal violations were facilitated by organizational structural deficiencies or inadequate supervision.

Investigation and Administrative Proceedings

The procedure for sanctioning companies follows the process for administrative offenses under the OWiG. The competent authorities (usually public prosecutors or supervisory authorities) open proceedings against companies, carry out investigations, and decide whether to bring charges, discontinue proceedings, or impose fines. The amount of fines is based on the company’s size, the economic benefit obtained, and any compliance measures implemented.

Current Reform Efforts in Germany

Draft Corporate Sanctions Act

In recent years, Germany has discussed introducing a Corporate Sanctions Act that would enable direct sanctioning of companies, following the example of other countries. The aim of the reform was to harmonize sanctioning possibilities, make procedural rights more transparent, and place stronger weight on compliance measures. The draft law provided for high fines, mandatory internal company investigations (‘Internal Investigations’), and incentives for compliance, but it has not yet been enacted.

Future Developments and EU Influences

As a result of international requirements (such as from the OECD, the EU Whistleblower Directive, or anti-money laundering directives), a further expansion of corporate criminal law can be expected in the long term. The debate regarding efficient and preventive sanctioning of companies remains a focus for legislators and the judiciary.

Corporate Criminal Law and Compliance

The Importance of Compliance Systems

Operational compliance is an essential aspect of corporate criminal law. Companies that maintain effective control and supervision systems (e.g., compliance management systems) can mitigate or avoid possible sanctions when accused of a violation. The implementation, documentation, and evidence of compliance structures are thus an integral part of risk management and prevention in many sectors.

Prevention and Internal Investigations

In the area of corporate criminal law, the establishment of internal control mechanisms and the conduct of internal investigations in the event of suspected compliance violations are becoming increasingly important. Such measures serve not only prevention but also cooperation with authorities, and may reduce sanctions.

International Comparisons

Overview of International Regulatory Approaches

USA: Comprehensive criminal liability of legal entities, severe sanctions, recognition of ‘Deferred Prosecution Agreements’
United Kingdom: ‘Corporate Criminal Offence’ also for tax offenses, specific corporate compliance programs
France: Introduction of ‘Loi Sapin II’ to strengthen corporate liability and compliance-related obligations
Netherlands: Direct corporate criminal law, also for environmental or economic crimes.

Significance for Multinational Companies

Multinational companies must regularly observe differing rules of corporate criminal law and establish global compliance programs to minimize sanctions and liability risks across various legal systems.

Criticism and Discussion

Arguments For and Against Corporate Criminal Law

Proponents see corporate criminal law as a necessary tool for effective enforcement of business law, combating economic crime, and strengthening the culture of compliance.
Critics warn against the dangers of ‘collective punishment,’ especially when companies are held responsible for individual misconduct of employees.

Practical Relevance

Corporate criminal law remains a highly topical legal field whose importance is set to increase further in the international business context, and in the course of digitalization and globalization. For company management, supervisory bodies, and regulators, corporate criminal law poses a central governance challenge.

Frequently Asked Questions

When is a company liable under corporate criminal law for the actions of its employees?

A company may be held liable under corporate criminal law for the criminal conduct of its employees if such conduct occurs in connection with their work activities and in the interest of or at least to the advantage of the company. Under § 30 OWiG, a corporate fine becomes relevant in particular when a manager—such as a managing director, board member, or any other person who is crucial for the company—commits a criminal offense or administrative offense. However, violations by ordinary employees may also be attributed to the company if there is a lack of sufficient organizational measures to prevent legal violations (so-called organizational fault). A prerequisite is that the breach is objectively attributable to the company, which can be facilitated by a breach of duty within the company or by inadequate supervision and control. However, there is no all-encompassing corporate criminal liability under German law; attribution and sanctioning are primarily regulated by administrative offense law, unless specific corporate criminal statutes apply. The assessment of sanctions is based on the severity of the offense, the economic benefit gained, and the preventive measures taken by the company.

What sanctions do companies face for violations of corporate criminal law?

Under German corporate criminal law, companies are primarily subject to fines, with § 30 OWiG and special acts such as the Money Laundering Act or data protection regulations serving as the legal basis. The amount of the fine depends on the type and extent of the violation, the economic advantage gained, and the company’s overall turnover. In particularly serious cases, measures of profit confiscation (§ 17(4) OWiG) may also be imposed, i.e., the skimming off of illegally obtained proceeds. In addition to fines, ancillary consequences are possible, such as publication of the judgment, prohibition of certain activities, or exclusion from public procurement. If compliance failures are present, the court may also impose requirements for improving internal processes or appoint a monitoring officer. Legally permissible criminal sanctions against companies remain formally limited in Germany; moves towards genuine corporate criminal liability have been the subject of political debate for some time, but have not yet been introduced.

How is a company’s fault established under corporate criminal law?

The examination of a company’s fault in corporate criminal law focuses on the existence of organizational and supervisory fault. The analysis looks at whether the company has adequately fulfilled its statutory supervisory and organizational duties. This includes the establishment of control and monitoring systems, selection, instruction, and supervision of employees, and the implementation of compliance measures to prevent criminal offenses within the company. If such precautions are lacking or are manifestly insufficiently implemented, the company may be accused of supervisory fault under § 130 OWiG. Investigations by law enforcement authorities regularly involve the evaluation of internal policies, witness interviews, and the review of documented processes. Proven organizational failure can therefore be sanctioned even without individual fault on the part of management personnel.

Is a company obligated to self-report or cooperate in investigations?

There is no general obligation for companies to self-report under German criminal law, but comprehensive cooperation with investigative authorities can be taken into account to mitigate sanctions. Companies are not required to contribute to their own incrimination (the so-called nemo tenetur principle), but early disclosure of relevant facts, self-reporting of compliance violations, and active assistance to authorities—for example, in the context of internal investigations—can lead to reductions in fines or restrictions. Particularly in foreign investigations, such as under the US Foreign Corrupt Practices Act (FCPA) or the UK Bribery Act, willingness to cooperate can have a considerable impact on the scope and amount of sanctions. In the context of internal investigations, companies must carefully balance cooperation obligations with the protection of their own defense interests.

What role do compliance programs play in corporate criminal law?

Modern compliance programs are a central element in the prevention of criminal and administrative offenses within the company. Under corporate criminal law, when violations occur, an assessment is regularly made as to whether the affected company has implemented and maintained an effective compliance management system. Existing and well-documented compliance measures are considered as mitigating factors in fine proceedings. An effective program especially includes risk analysis, definition of codes of conduct and policies, regular training, suitable control mechanisms, and an effective whistleblower system. If a compliance system exists and is regularly reviewed and updated, this can serve as evidence against organizational fault. Even after an incident, it is crucial to demonstrate improvements and rectify existing system deficiencies to document mitigating circumstances.

What is the typical course of an investigation against a company?

Investigations against companies are mostly initiated by tips, criminal complaints, or suspicions. The public prosecutor’s office investigates whether an administrative or criminal offense attributable to the company has occurred. This involves investigations within the company, searches, securing of documents, evaluation of emails, employee interviews, and, if necessary, appointment of independent experts. Companies may request access to investigation files as affected parties and have the right to comment. If the suspicion is substantiated, a fine notice or indictment may follow. Reaching a settlement as part of the proceedings is possible. Throughout the entire process, adherence to procedural rights and the separation of internal company and criminal investigations is important, as is the protection of sensitive data. In the end, the public prosecutor decides on discontinuation of the proceedings, issuance of a fine, or initiation of court proceedings.

Further term explanations

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