The German Federal Government is cracking down on white-collar crime. The Federal Ministry of Justice recently presented a draft bill for an association sanctions act. The purpose of the law is to fight corporate crime, referring mainly to property offenses that are attributable to the company as such. The best recent example was the VW emissions scandal.
The objective now is as follows: companies should no longer be able to profit economically from the structural misconduct of their employees. However, the new law not only stipulates stricter legal liability for companies, but also provides companies with their own processual provisions and answers some questions with regard to the area of corporate crime which up to now has been rather hazily defined.
Customs infringements also included
The term “corporate crime” not only covers classic economic crimes such as fraud, money laundering or delayed filing for insolvency. Criminal sanctions can also result from customs violations, since customs law is closely linked to criminal tax law.
Anyone who makes false declarations during import or export and thereby evades customs duties can be guilty of tax evasion. Anyone who imports goods contrary to an import ban commits a so-called ban violation. Customs authorities are also the law enforcement agency responsible for dealing with illegal employment (so-called moonlighting).
Compliance system mitigates fines
An effective customs compliance system can help businesses prevent customs offences and crimes before they are committed and thus achieve substantial cost savings by avoiding fines. The draft law now also – and for the first time – expressly stipulates that the existence of a compliance system in the company must be considered as a mitigating circumstance. This means that if the company concerned has a compliance system in place, this already has a mitigating effect on the severity of the fine the company will have to pay.
Companies would therefore do well to use the remaining two years until the association sanctions act comes into force to establish an effective compliance system. Experience has shown that the development and implementation of such systems take time, which means companies should start developing a compliance system as soon as possible.
We can support you in establishing a compliance system
Our experienced attorneys will be happy to develop a compliance program tailored to your company’s needs and assist you as an external compliance officer in complying with applicable regulations both to prevent economic crime and money laundering and in the area of customs and/or tax law.