Definition and Distinction of Economic Crime Cases
Economic criminal law refers to an area of criminal offenses that deals with those crimes committed in the context of business or companies. The term economic crime cases encompasses all instances where criminally relevant actions have an economic reference. Economic crime cases form an independent legal field at the intersection of criminal law, commercial law, corporate law, tax law, and increasingly also international law.
Economic criminal law is not limited to a single statute, but arises from a multitude of norms in various laws, including the Criminal Code (StGB), the Commercial Code (HGB), the Fiscal Code (AO), the Securities Trading Act (WpHG), as well as various ancillary laws such as the Banking Act (KWG), the Insurance Supervision Act (VAG), or the Money Laundering Act (GwG).
Facts in the Area of Economic Crime Cases
Core offenses
Among the main offenses treated as economic crime cases are in particular:
- Fraud (§ 263 StGB): Deception about facts with the aim of obtaining a financial advantage and thereby causing financial loss is one of the most common economic offenses.
- Embezzlement (§ 266 StGB): The violation of a duty to safeguard assets, often within the context of companies or organizations, represents a classic complex of economic crime cases.
- Subsidy Fraud (§ 264 StGB): The use of public funds through false or incomplete information.
- Bankruptcy Offenses (§§ 283 ff. StGB): Additional provisions on delayed filing for insolvency, fraudulent diminution of assets, and violation of bookkeeping obligations supplement the criminal law system for economic protection.
Specific Economic Offenses
In a broader sense, other criminal offenses are also counted among economic crime cases, such as:
- Insider trading and market manipulation (§§ 38 ff. WpHG; Art. 14 EU Market Abuse Regulation)
- Bribery and Corruption in Commercial Transactions (§ 299 StGB)
- Tax Evasion (§ 370 AO)
- Money Laundering (§ 261 StGB)
- Customs and Foreign Trade Offenses (including under the Foreign Trade and Payments Act – AWG and Customs Code)
- Violations of Competition Law (e.g., through unfair agreements pursuant to § 298 StGB – anti-competitive agreements)
This list is not exhaustive, but it illustrates the complexity and range of possible economic offenses.
Distinction from Other Areas of Law
Economic criminal law can be distinguished from purely civil liability norms, for example from corporate law, as well as from regulatory sanctions, such as fines under regulatory offense law. While civil liability primarily seeks to compensate economic disadvantages, economic crime cases focus on the punishment and sanctioning of culpable misconduct.
There is frequently an overlap with regulatory offense law—for example, in the areas of antitrust law (Act Against Restraints of Competition — GWB) or capital market law.
Jurisdiction and Procedure in Economic Crime Cases
Responsible Investigative and Prosecution Authorities
Economic crime cases are usually prosecuted by specialized departments of prosecutors’ offices, so-called “special prosecutors’ offices for economic crime.” Depending on the federal state, there are also specially trained units in the police and tax investigation departments.
Judicial Jurisdiction
The subject-matter jurisdiction for economic crime cases often lies with the economic criminal chambers of the regional courts. In simpler cases, however, jurisdiction may also rest with the local court (court with lay judges). The courts regularly examine whether the case is of particular economic significance, for example based on the amount of loss, the complexity of the facts, or the number of persons affected.
Procedural Particularities
Proceedings in economic crime cases are characterized by increased complexity. Reasons for this include, among others:
- Extensive gathering of evidence, often involving analysis of large amounts of data
- International aspects, for example, when cross-border facts or foreign parties are involved
- Frequently parallel proceedings, for instance in insolvency, tax, or administrative proceedings
To ensure the principle of proportionality, investigative measures in economic crimes, such as searches and seizures, are subject to special requirements.
Sanctions and Legal Consequences in Economic Crime Cases
Sentencing and Collateral Consequences
The penalties for economic crime cases vary depending on the offense. They range from fines to long prison sentences. In addition, there may be professional and corporate law consequences, including:
- Entry of penalties in the Federal Central Register
- Asset confiscation relevant to value (§§ 73 ff. StGB – asset forfeiture)
- Business prohibition according to § 35 Trade Regulation Act (GewO)
- Loss of managing director or supervisory board mandates
Relevance of Compliance and Prevention
Effective compliance systems are gaining increasing importance, aimed at proactively preventing or detecting economic crimes. The lack of such control mechanisms can have a negative impact on sentencing in the event of a conviction.
Development and Significance of Economic Crime Cases
The significance of economic crime cases and economic criminal law has increased considerably in recent decades. Contributing factors include globalization of the economy, advancing digitalization, and stricter regulatory requirements, for example through international agreements on combating money laundering and corruption.
Legislative initiatives such as extended corporate criminal liability, the Supply Chain Due Diligence Act, and the ongoing revision of economic criminal law provisions reflect the social relevance and current development of this area of law.
Summary
Economic criminal law and economic crime cases comprise all criminal law matters in which economic activity or public financial interests are involved. The subject is complex, interdisciplinary, and closely connected to related fields of law such as tax law, company law, and administrative offense law. Economic criminal proceedings place special demands on investigative authorities and courts, and in proven cases of misconduct can result in severe sanctions for companies and individuals involved. Setting up effective control and defense mechanisms in advance is therefore an integral part of modern corporate governance.
Frequently Asked Questions
How does an investigation proceed in economic crime cases?
An investigation in economic crime cases usually begins with a report, a criminal complaint, or based on information from supervisory authorities, tax investigation, or other agencies. The public prosecutor’s office is in charge of the investigation and is often supported by specialized investigative authorities such as the criminal police or tax investigators. At the outset, it is examined whether there is an initial suspicion of a crime in the economic context—for example, fraud, embezzlement, or insolvency offenses. If so, various investigative measures are initiated, such as searches of business and private premises, seizure of documents, and asset freezing. Witnesses and suspects are questioned. Typically, a comprehensive review of accounting records, emails, and other documents is carried out to clarify facts and responsibilities. After the conclusion of the investigation, the public prosecutor’s office decides whether to file charges, apply for a penal order, or discontinue the proceedings due to insufficient suspicion. The investigation process is characterized by particularly high complexity in both legal and factual terms, especially due to frequent multidimensional cooperation between different authorities.
What rights do defendants have in economic crime cases?
Defendants in economic crime cases enjoy the rights set out in the Code of Criminal Procedure. In particular, they have the right to remain silent and not to incriminate themselves (the so-called nemo tenetur principle). From the point they are considered defendants, they have the right to legal counsel. They may request access to files at any time, although this may be partially refused or restricted by the prosecution during the investigation phase to ensure the success of the investigation. Defendants have the right to be present at all key interrogations or to be represented by their lawyer. They are also entitled to make motions for evidence and to present evidence. In the event of searches or seizures, they have the right to call witnesses and to have the legality of such measures reviewed by a court.
What typical criminal penalties may be imposed on conviction in economic crime cases?
Penalties in economic crime cases vary depending on the nature and seriousness of the offense. Prison sentences are possible—in some cases even without parole—fines or—in the case of companies in particular—asset forfeiture measures, where economic gains from offenses are confiscated. In serious cases, prison sentences of several years can be imposed, for example for commercial fraud, embezzlement causing significant loss, bribery and corruption, or large-scale tax evasion. Professional consequences may also arise, such as a professional ban or revocation of a business license. Especially companies can additionally be fined under § 30 of the Administrative Offenses Act (OWiG) if managers have committed offenses from which the company benefited. Public-relations measures such as publication of judgments are also possible as collateral consequences.
Are there special features regarding the evidence in economic crime cases?
Yes, the gathering of evidence in economic crime cases has numerous particularities. The facts are often complex and include a multitude of documents, digital data, and business records. Prosecutors often resort to experts, especially auditors or IT forensic specialists, to analyze accounting records, balance sheet data, or transaction histories. Reconstruction of economic processes is also frequently necessary, with the criminal assessment being closely linked to commercial and tax law provisions. Another characteristic is the so-called ‘criminal attribution’ of business decisions, which are often made within the framework of a division of labor in company structures. Consequently, determining responsibilities and proving the subjective element of the offense, particularly intent, can be especially challenging.
Can companies themselves be offenders in economic crime cases?
Companies as legal entities are not criminally responsible under the Criminal Code; however, the Administrative Offenses Act (OWiG), notably in § 30, provides that companies can be fined for offenses committed by their managing personnel. Additionally, assets that originate from or were used for the commission of a crime can be confiscated (§ 73 ff. StGB). A company’s liability typically arises from the fact that its managing personnel—such as managing directors, board members, or authorized representatives—commit offenses in the exercise of their duties, from which the company benefits financially. In practice, criminal and fine proceedings are therefore often conducted against both individuals and companies.
What is a ‘voluntary disclosure’ and when is it possible in economic crime cases?
Voluntary disclosure is an important instrument in Germany, especially in tax criminal law. It enables offenders, under certain conditions, to obtain immunity from prosecution if undeclared or misdeclared taxes are disclosed through a timely and complete subsequent declaration. The voluntary disclosure must fully and correctly declare all non-expired tax offenses of a tax type, and the tax authorities must not yet be aware of the offense. In other economic offenses, such as embezzlement or fraud, the law does not provide a voluntary disclosure with comparable effect as in tax criminal law. In such cases, at most, the possibility exists to achieve leniency through proactive cooperation, restitution, or comprehensive clarification. A report and active remorse may, however, be considered mitigating factors.
