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Anti-corruption In Germany

1. Bribery in the home (private to public)

 

1.1 The Legal Environment

Bribery of public officials (Vorteilsannahme, Bestechlichkeit, Vorteilsgewährung, and Bestechung) is prohibited under Sections 331 to 338 of the German Criminal Code.

 

1.2 What does bribery mean?

Anyone who tries to bribe a public official is guilty of bribery. Giving/accepting a bribe is one thing; giving/accepting a bribe as an incentive to commit an act in violation of one’s official duties is another. The earlier “broader” form of bribery entails the execution of an official act in violation of an official obligation, whereas the latter form of bribery necessitates the execution.

(a) Taking or giving a bribe

  • Bribery (Section 333 German Criminal Code) – This refers to offering, promising, or granting a benefit to a public official in exchange for that person’s or a third party’s performance of a duty.

  • Taking bribes (Section 331 German Criminal Code) – Demanding, allowing oneself to be promised, or accepting a benefit for oneself or a third party in exchange for the performance of a duty.

  • Granting or accepting advantages is not unlawful under Sections 331, 333 of the German Criminal Code if the public official’s principal has permitted the benefit before or soon after its receipt, as long as the public official’s duties are not infringed.

(b) Taking or giving a bribe as an inducement to commit an act that is contrary to one’s official duty.

  • Bribing a public official in exchange for performing, or promising to perform, an official act and thereby violating or will violate his or her official duties (Section 334 German Criminal Code).

  • Taking bribes as an inducement to violate one’s official duties (Section 332 German Criminal Code) – This entails demanding, allowing oneself to be promised, or accepting a benefit for oneself or a third party in exchange for performing or intending to perform an official act and thus violating or intending to violate one’s official duties.

c) Bribery of a delegate or parliamentarian

  • Offering, promising, or granting any delegate or member of parliament an unfair benefit for that member or a third party in exchange for an act or omission in regard to that member’s or delegate’s mandate is a criminal offense (Section 108e para. 2 German Criminal Code). Similarly, if a delegate / member of parliament asks or accepts the promise of such an unfair benefit, he may be held criminally accountable (Section 108e para. 1 German Criminal Code).

  • Members of the Bundestag and Bundesrat, the parliaments of the German Federal States, the European Parliament, elected members of municipal or regional associations, members of a parliamentary assembly of an international organization, and members of a legislative body of a foreign state are all considered “members of parliament” (Section 108e para. 3 German Criminal Code).

 

1.3 What does it mean to be a public official?

In Section 11 of the German Criminal Code, a “public official” is defined as someone who: (1) serves as a civil servant or judge; (2) performs other public official functions; or (3) has been appointed to serve with a public authority or another agency, or has been commissioned to perform public administrative services, regardless of the organizational form used to carry out such duties. The term “public official” is fairly wide and encompasses almost anyone who performs public tasks. Individuals in government functions, in particular, are not excluded from the concept. Individuals who work for universities or public hospitals are also included (i.e., all employees of public sector entities). The German Criminal Code, on the other hand, solely includes public officials under German law. See Section 3 for the application of the Criminal Code to European and international public officers.

 

1.4 Bribery’s Consequences

(a) For the Individuals Involved

  • A maximum sentence of three years in prison or a fine (giving and taking bribes; Sections 331 and 333 German Criminal Code)

  • Giving and taking bribes as an incentive for the recipient’s violating his official duties; Sections 332 and 334 German Criminal Code; Bribery of a member of parliament; Section 108e German Criminal Code): three months (six months for public officials) to five years in prison (giving and taking bribes as an incentive for the recipient’s violating his official duties; Sections 332 and 334 German Criminal Code; Bribery of a member of parliament; Sections 332

  • In the most serious circumstances, a sentence of up to ten years in jail may be imposed (Section 335 German Criminal Code)

  • Fines: A fine is imposed under German criminal law in the form of a series of daily penalties (up to 24 months); the amount to be paid each daily penalty is established by the court and is based on the offender’s income.

(b) For the business or legal entity

  • Under German law, businesses cannot be held criminally accountable. Administrative monetary fines may be imposed directly on companies if a company representative or representative body (e.g., a member of the board of directors, the general manager) commits a criminal or administrative offense, and the company as a result breaches a company duty or profits in an illegal manner (Section 30 of the German Administrative Offence Act). If a company representative fails to perform his or her supervisory duties, such as failing to adopt proper anti-corruption controls, the company representative may be held accountable. At the same time, the corporate representative’s violation of a supervisory responsibility can be imputed to the company, and a monetary fine can be imposed on the company (Section 130 of the German Administrative Offence Act). A firm can be fined up to EUR 10 million for each infraction.

  • Furthermore, if an employee or company representative commits an administrative or criminal offense, a court can order the forfeiture “of the acquired something” (see Sections 73, 73a of the German Criminal Code, and Section 29a of the German Administrative Offence Act) against the company, requiring the company to release all assets acquired as a result of the unlawful act. If the corporation has previously been penalised, forfeiture may not be required (Section 30 para 5 of the German Administrative Offence Act).

  • In 2014, a debate erupted about imposing criminal culpability on corporations. The debate slowed down in 2016, but it is still going on.

 

1.5 Contributions from politics

The Parteispendengesetz governs contributions to political parties. Contributions to political parties are generally unlimited. Political parties, on the other hand, are subject to a transparency procedure that requires the immediate publishing of any contribution over EUR 50,000 and the benefactor. Contributions worth more than EUR 10,000 but less than EUR 50,000 will be disclosed 12 to 18 months after they are received.

 

1.6 Hospitality expenses are subject to a limit (gifts, travel, meals, entertainment, among others)

Hospitality expenses are not subject to any quantitative or qualitative restrictions in Germany’s criminal code. German courts, on the other hand, regard “minor” favors to be admissible and take a very stringent approach to evaluating what is and is not allowed. Even small gifts, like as pencils or promotional freebies, may be considered unlawful (although are not always). Whether or not a hospitality expense qualifies as bribery must be determined on a case-by-case basis, taking into consideration all available information. Some government agencies have released rules establishing a EUR 25 threshold. This criterion could be used as a guideline for businesses. In general, however, it is not advisable to grant any rewards to government employees.

 

2. Bribery in the home (private to private)

 

2.1 The Legal Environment

Sections 299 to 301 of the German Criminal Code restrict private bribery. It applies to all employees and agents of a company.

 

2.2 What is bribery in the private sector?

Taking bribes in the business world – Whoever, as an employee or agent of a company (including the company’s management),: (a) demands, allows himself to be promised, or accepts a benefit for himself or a third party in a business transaction in exchange for giving an unfair advantage to a third party in the competitive (domestic or foreign) purchase of goods or commercial services; or (b) without the prior approval of the co-owner (Section 299 para 1 German Criminal Code).

Bribery in commercial transactions:

  • gives, promises, or grants a benefit to an employee or agent of a business for himself or a third person in a business transaction in exchange for such employee’s or agent giving him or another person an unfair preference in the procurement of products or commercial services for competitive purposes; or

  • An employee or agent of a business who, without the company’s prior approval, provides, promises, or gives a benefit to himself or a third person in exchange for a conduct or omission of an act that breaches the company’s duty will be held criminally accountable (Section 299 para 2 German Criminal Code).

 

2.3 Private bribery’s Consequences

 For the Individuals Involved

  • A maximum sentence of three years in prison or a fine

  • Incarceration for up to five years in serious situations