White Collar Update: Germany Increases Administrative Fines for Companies Tenfold

3 July 2013
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Key takeaways:

Effective June 30, 2013, the reform of the German Act on Regulatory Offences has increased the exposure of individuals and companies to administrative fines tenfold. Key aspects of the reform are:

  • The fines for criminal offences attributable to a company have been increased from EUR 1 million to EUR 10 million in case of intentional, and from EUR 500,000 to EUR 5 million in case of negligent offences.
  • The same holds true in cases of failure to provide sufficient oversight over the company’s business to prevent offences incidental to the business; this increases the pressure to provide an effective compliance sharply.
  • In addition to the fines and other sanctions, companies continue to be exposed to potential disgorgement of benefits obtained in connection with illicit behavior.