Concept and Fundamentals of Economic Criminal Law
Das Economic Criminal Law refers to that area of criminal law which encompasses violations of the rules of economic order. The aim of economic criminal law is to protect societal and economic interests by prosecuting crimes related to economic activity. Economic criminal law is of particular significance in the context of combating corruption, fraud, insolvency offenses, and tax offenses. This area of law is characterized by high complexity, attributable to multifaceted economic circumstances, interactions with civil and administrative law, and the ongoing development of economic frameworks.
Fundamentals of Economic Criminal Law
Statutory Basis
Economic criminal law in Germany is not a separate code, but rather results from a multitude of individual provisions, which are regulated not only in the Criminal Code (StGB) but also in numerous ancillary laws. Key elements include in particular:
- Sections 263 et seq. StGB (Fraud and related offenses)
- Sections 332 et seq. StGB (Corruption offenses)
- Sections 283 et seq. StGB (Insolvency offenses)
- Sections 299 et seq. StGB (Bribery and corruption in business transactions)
- Sections 369 et seq. Fiscal Code (AO), especially tax evasion
- Securities Trading Act (WpHG)
- Foreign Trade and Payments Act (AWG)
- Act Against Restraints of Competition (GWB)
- Money Laundering Act (GwG)
In addition, there are numerous further criminal provisions in special laws, e.g. in the Banking Act (KWG), the Payment Services Supervision Act (ZAG), or the Product Safety Act (ProdSG).
Distinction from Other Areas of Law
Economic criminal law differs from general criminal law through its specific reference to economic life. In contrast to traditional offenses such as theft or bodily injury, the focus here is on the protection of property interests, market mechanisms, and lawful economic transactions. Civil penalties (damages, contractual penalties) serve individual compensation, whereas economic criminal law aims for the sanctioning and prevention of economically harmful conduct to society.
Categories of Offenses in Economic Criminal Law
Property Offenses
Economic criminal law includes numerous asset-related crimes, where the intent to cause harm may be directed against companies, public institutions, or consumers. These include, in particular, fraud (Section 263 StGB), breach of trust (Section 266 StGB), embezzlement (Section 246 StGB), credit fraud (Section 265b StGB), and capital market-related offenses such as market manipulation or insider trading.
Insolvency Crimes
Insolvency crimes serve to protect the interests of creditors and the orderly completion of insolvency proceedings. Typical offenses include delayed filing for insolvency, bankruptcy (Section 283 StGB), preferential treatment of creditors (Section 283c StGB), as well as culpable breaches of insolvency law obligations, particularly by managing directors and board members.
Corruption Offenses
Corruption offenses within economic criminal law aim at combating bribery, acceptance of bribes, and granting of advantages in business dealings. Section 299 StGB penalizes such conduct in private business relationships, while Sections 331 et seq. StGB deal with offenses in the context of public offices.
Competition and Antitrust Offenses
Provisions on economic competition offenses are found especially in the Act Against Unfair Competition (UWG) and the Act Against Restraints of Competition (GWB). These include, for example, the criminal sanctioning of unfair advertising, price fixing, cartel formation, or market manipulation.
Tax and Levy-Related Offenses
Tax crimes, regulated in the Fiscal Code (primarily Sections 369 et seq. AO), such as tax evasion and reckless tax reduction, are of considerable significance as typical economic criminal offenses in economic life. Additionally, crimes related to levies, subsidy fraud, and withholding of social security contributions fall under economic criminal law.
Money Laundering
The offense of money laundering, chiefly regulated in Section 261 StGB and the Money Laundering Act (GwG), concerns channeling funds originating from criminal activities into the legal economic cycle.
Particularities of Economic Criminal Law
Perpetrator Groups and Accountability
Economic criminal law primarily involves persons with entrepreneurial responsibilities, in particular members of the management, board of directors, supervisory board, or authorized signatories. However, offenses can generally also be committed by employees or third parties. In the core area of economic criminal law, the principle of criminal liability for breaches of organizational or duty-bound obligations applies. Of particular relevance is the so-called corporate criminal law or sanctions regime, which is linked to misconduct of corporate officers and, in some cases, even allows for fines to be imposed on legal entities (see Section 30 OWiG).
Procedural Particularities
Economic criminal proceedings have a number of peculiarities. These include:
- Complexity of the Circumstances, often requiring investigations with a specialized technical, economic, or accounting background.
- Inspection and Search Measures, e.g. use of auditors, accountants, or certified public accountants.
- Division of Labor in Investigations through specialized investigative departments and special prosecutors for economic crime.
Sanctions and Legal Consequences
In addition to traditional penalties such as imprisonment and fines, economic criminal law provides for specific ancillary consequences, for example professional disqualifications, confiscation and forfeiture of assets, or corporate fines (Section 30 OWiG). In serious cases, the withdrawal of business licenses or entries in industrial or commercial registers (e.g. the Central Trade Register) may occur.
Preventive Regulations and Compliance
Economic criminal law serves a pronounced preventive function. Companies and their executive bodies are obliged to prevent breaches of law by means of suitable organizational measures (compliance). Internal investigations, whistleblower systems, and training are elements of effective prevention.
Development and International Aspects of Economic Criminal Law
European and International Dimension
Economic criminal law is strongly shaped by supranational regulations. Relevant here are the specifications of the European Union (e.g., EU directives on money laundering prevention, cartel and competition law) and international conventions (e.g., OECD Anti-Bribery Convention, UN Convention against Corruption). The cross-border prosecution of economic crimes is gaining increasing importance.
Current Trends
Economic criminal law is subject to constant development in the context of digitalization, globalization, and changing economic conditions. New forms of offenses, such as cybercrime, data protection violations, digital market manipulation, or violations of sustainability requirements, are coming into focus of legislative efforts and are opening economic criminal law for future challenges.
Legal Sources and Literature
Statutory Foundations
- Criminal Code (StGB)
- Fiscal Code (AO)
- Securities Trading Act (WpHG)
- Money Laundering Act (GwG)
- Act on Administrative Offenses (OWiG)
- Act Against Restraints of Competition (GWB)
- Banking Act (KWG)
Further Reading
The academic literature on economic criminal law is manifold. Commentaries, monographs, and current studies explore specific areas in depth, such as compliance, Europeanization, or corporate sanction law.
Summary: Economic criminal law is a central area of criminal law, which, through the combination of economic and criminal law regulations, poses complex requirements for legal practice and criminal proceedings. It serves to protect the integrity of economic life and is continuously developing in line with economic and technological challenges of the times.
Frequently Asked Questions
What typical offenses are covered by economic criminal law?
Economic criminal law encompasses a wide range of offenses, regulated in the Criminal Code (StGB) as well as in numerous ancillary laws. Among the most frequent are fraud (Section 263 StGB), breach of trust (Section 266 StGB), bribery/corruption in business transactions (Sections 299 et seq. StGB), insolvency offenses (Sections 283 et seq. StGB), subsidy fraud (Section 264 StGB), tax evasion (Section 370 AO – Fiscal Code), and offenses under the Act Against Unfair Competition (UWG). In addition, economically relevant criminal provisions are found in the Securities Trading Act (WpHG), the Banking Act (KWG), and special laws dealing, for example, with money laundering or insider trading. Economic criminal law aims to protect property interests, the integrity of economic life, and trust in markets.
How do investigations in economic criminal law differ from general criminal proceedings?
Investigations in economic criminal law are often characterized by particular complexity. On the one hand, the facts of the case are usually marked by extensive, often intricate business processes. Investigative authorities such as prosecutors and tax investigators therefore often work closely with auditors and financial specialists. Investigations are generally more time-intensive and require access to large volumes of data, including accounting records, emails, and contracts. Special investigative measures such as searches, seizures, and account surveillance are also applied. Furthermore, companies and members of corporate bodies are more frequently considered as suspects or witnesses, which poses special legal challenges, particularly regarding corporate defense.
What criminal consequences do natural and legal persons face in economic criminal law?
Natural persons, such as managing directors or senior employees, may face fines and imprisonment under economic criminal law. In addition, occupational measures may be imposed, such as a professional ban or the confiscation of assets obtained (asset recovery). For legal entities (companies), there is currently no separate ‘corporate criminal law’ under German criminal law, but substantial fines may nevertheless be imposed under Section 30 OWiG (Act on Administrative Offenses). Additional consequences include exclusion from public tenders, reputational damage, and measures under the Money Laundering Act. As part of asset recovery, a company’s assets obtained through crimes may be confiscated.
How does economic criminal law relate to tax criminal law?
Tax criminal law is a subcategory of economic criminal law and refers to criminal offenses against tax collection law. The core provision here is Section 370 AO (tax evasion). While economic criminal law is a broad field covering a wide variety of types of offenses, tax criminal law specifically concerns acts that deprive the state of taxes or interfere with tax collection procedures. In practice, there are significant overlaps, for example, when balance sheet manipulations constitute both fraud and tax evasion. Investigation is often conducted by specialized tax investigation authorities.
What role do compliance measures play in economic criminal law?
Compliance measures are a key component in the field of economic criminal law. They serve the prevention of unlawful conduct within a company by implementing codes of conduct and control mechanisms. Companies that have established and implemented effective compliance guidelines can often exonerate themselves in criminal proceedings or at least invoke mitigating circumstances. Courts take existing compliance structures into account both in determining fines and in assessing the responsibility of company organs. Conversely, the absence of effective compliance may be considered organizational fault and lead to harsher penalties.
What is the significance of asset recovery in economic criminal law?
Asset recovery holds an outstanding position in economic criminal law. Its purpose is to deprive perpetrators or companies of assets acquired through criminal acts, thereby preventing them from profiting from crime. Since the reform in 2017, confiscation is possible independently of the main penalty and, in some cases, even when the proceedings are discontinued. Not only the direct perpetrator but also third parties who benefited from the act are affected. Measures range from the seizure of individual items to the confiscation of entire profits. Asset recovery can have significant economic effects on companies and individuals.
How are international matters addressed in economic criminal law?
Economic crime frequently transcends national borders, for example, in cases of cross-border fraud, money laundering, or bribery. In international cases, international agreements, such as the United Nations Convention against Corruption (UNCAC) or the OECD Convention on Combating Bribery, are relevant for jurisprudence and investigations. The responsible German authorities cooperate with foreign investigatory bodies within the framework of legal assistance (e.g., extradition and mutual legal assistance treaties). Questions of jurisdiction, applicable law, and prosecution are determined by the provisions of Sections 3 et seq. StGB as well as international treaties. International cooperation is becoming increasingly important in light of the globalization of economic life.
