Corporate criminal law unconstitutional
Munich, 11.11.2013

Corporate criminal law unconstitutional

Today, the Foundation for Family Businesses submitted a report by Professor Bernd Schünemann, in which the planned corporate criminal law is criticized as being unconstitutional. Family business owners are threatened by a future double jeopardy, warns the author.

The Minister of Justice conference in Berlin decides next Thursday on the matter of a criminal offence in which not only the individual offender, but also companies and clubs could be sanctioned when they fail to prevent misconduct.
Possible punishment could come in the form of a fine, to the tune of ten percent of annual sales, up to the dissolution of the company.

In response, the Foundation for Family Businesses has submitted a report penned by an expert on Economic Criminal Law, Prof. Bernd Schünemann, with the title: "The question of unconstitutionality and the consequences of criminal law for enterprises".

Schünemann points out in his report that: "A shareholder whose dividend is reduced by a potentially horrendous collective fine, or an employee who must forego a wage increase because the company is subject to such a heavy fine, is not able to prevent misconduct by decision-makers". The proposed law not only breaks with the principle of individual guilt, but also violates constitutional guarantees in six other ways.

"The planned corporate criminal law hits the wrong people," explains Prof. Brun-Hagen Hennerkes, Director of the Foundation for Family Businesses. Now the individual failings of banks and corporations in anonymous free float must also be paid for by family businesses and clubs in an inappropriate tightening of the law. “Family businesses would be punished twice, because the major decision maker of a company is also its owner - as opposed to a public limited company in which these two functions are separate," he says . A million legal persons, according to the law of North Rhine- Westphalia, would be affected.

The proposed law would force companies and organizations to establish a formal compliance organization. "Family business owners today already have a culture of compliance embedded in their reuptable approach to doing business. Compliance with the law can not be imposed by bureaucracy. This would only generate new business for large law firms, that offer legal advice in this area," says Hennerkes and asks: "Is it really seriously wanted that every sports club will need to set up and fund its own compliance department?”

"Companies can already get slapped with stiff penalties", Hennerkes notes. Only this year, the maximum limit of a fine for willful offense in Paragraph 30 of the Administrative Offence Act was increased tenfold to ten million euros. There is no upper limit set by the state for the offence of siphoning of profits for economic advantage. Indeed, a fine of 140 million euros for bribes in submarine orders was recently handed out to Ferro Steel.

For the offender, German law already provides sufficient sanctions: for example, for fraud, bribery, accounting fraud, product piracy and breach of trust, facts which could be more clearly written. "I have nothing against higher penalties for offenders," says Hennerkes, "but I am against the discrimination of family businesses."

For more information:

Hartmut Kistenfeger

Head of Communications and Programs

Stiftung Familienunternehmen
Prinzregentenstraße 50, D-80538 Munich

Phone: +49 (0) 89 / 12 76 400 06
Fax: +49 (0) 89 / 12 76 400 09

E-Mail: kistenfeger(at)

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