Corporate Criminal Liability in Germany

Corporate criminal liability in Germany: the short answer

Germany still has no corporate criminal liability in the strict sense. Under the traditional principle that only natural persons can act culpably, companies cannot be indicted or convicted of crimes. Instead, they are sanctioned through administrative fines under § 30 of the Administrative Offences Act (Gesetz über Ordnungswidrigkeiten, OWiG) for offences committed by their managers, linked to the breach of supervisory duty in § 130 OWiG, and through confiscation of proceeds under §§ 73 ff. of the Criminal Code (Strafgesetzbuch, StGB). A government bill for a Corporate Sanctions Act (Verbandssanktionengesetz), introduced in 2020, would have changed this, but it was not adopted. Specific EU directives have since required turnover-based sanctions for companies in certain areas, which Germany implements within the OWiG model.

For international companies, the absence of corporate criminal liability does not mean low risk. Fines can reach hundreds of millions of euros through disgorgement and turnover-based caps, confiscation can be extensive, and convictions of managers lead to entries in the competition register and exclusion from public contracts. This article explains the current model, the failed reform, EU influences and what companies should do.

Why Germany has no corporate criminal law

German criminal law is built on personal guilt (Schuldprinzip), which has constitutional status. The prevailing view has long been that legal persons cannot act culpably in the criminal law sense. Sanctions against companies were therefore placed in administrative offences law, which does not require personal guilt in the same way and allows fines against legal persons. Proponents of corporate criminal liability argue that this model does not adequately reflect organisational wrongdoing, leads to inconsistent enforcement because prosecution is discretionary and provides insufficient incentives for compliance. Opponents argue that the existing framework is effective and that criminal liability would add stigma without improving prevention.

The current model in practice

Prosecution of companies is discretionary under the opportunity principle. Prosecutors and authorities decide whether to impose a corporate fine and how much, and settlements are common. Companies participate in criminal proceedings against individuals as ancillary parties, with rights to be heard and to appeal. In administrative fine proceedings, for example before the Bundeskartellamt or data protection authorities, the company itself is the addressee of the fine notice and can challenge it in court, where the case is then heard under criminal procedure rules.

The failed Corporate Sanctions Act

The coalition agreement of 2018 committed the then government to reform corporate sanctions law. The Federal Government's bill for an Act to Strengthen Integrity in the Economy, containing the Corporate Sanctions Act, was introduced in the Bundestag in 2020. It would have:

• replaced the opportunity principle with mandatory prosecution of companies (legality principle);
• introduced corporate sanctions of up to 10 per cent of average annual worldwide turnover for companies with more than EUR 100 million turnover;
• provided for sanction reductions for internal investigations meeting specific requirements, including separation of investigation and defence functions;
• introduced a public register of corporate sanctions and the possibility of publishing convictions.

The bill was controversial, in particular because of the mandatory prosecution, the requirements for internal investigations and concerns about legal privilege. It was not adopted before the end of the legislative period in 2021. Subsequent governments did not revive it in the same form. As of November 2026, the OWiG model remains in place.

EU influence on corporate sanctions

EU law increasingly requires effective, proportionate and dissuasive sanctions against legal persons, often with turnover-based maximums, without requiring Member States to classify them as criminal. Examples include the Environmental Crime Directive (EU) 2024/1203, which requires fines of at least 5 per cent or 3 per cent of worldwide turnover, or EUR 40 million or EUR 24 million, depending on the offence; the Directive (EU) 2024/1226 on violations of EU restrictive measures, which Germany implemented by raising the corporate fine cap for intentional sanctions offences to EUR 40 million; and anti-money laundering rules for obliged entities. Germany implements these requirements by increasing caps within the OWiG framework or in special laws, rather than by introducing corporate criminal liability.

How the German model compares in practice

Although Germany lacks corporate criminal liability in name, the practical consequences for companies are often comparable to those in jurisdictions that prosecute companies. Fines in cartel, emissions and corruption cases have reached very high amounts, largely because of the disgorgement component and turnover-based caps. Prosecutors use the threat of corporate fines and confiscation to encourage cooperation, and companies negotiate outcomes that resemble settlements elsewhere. The main differences lie in the absence of a formal criminal conviction of the company, the discretionary nature of proceedings and the lack of statutory incentives such as deferred prosecution agreements or formal credit for internal investigations.

For companies, the absence of formal corporate criminal liability also means less legal certainty. There is no statutory catalogue of mitigating factors comparable to sentencing guidelines, and practice varies between prosecutors' offices and authorities. Early engagement with the competent authority and a clear, well-documented presentation of the compliance system and remedial measures are therefore particularly important.

Reputational and contractual consequences

Even without a conviction, corporate fines and investigations affect reputation, financing and contracts. Loan agreements, supply contracts and framework agreements often contain compliance warranties and termination rights that can be triggered by investigations or fines. Customers in regulated sectors may suspend business relationships until the matter is resolved. Companies should map these contractual consequences early, because they can be more significant for the business than the fine itself.

Cross-border exposure

German companies are exposed to corporate criminal liability abroad. Many jurisdictions, including the United States, the United Kingdom, France, Italy and Austria, recognise criminal or quasi-criminal liability of companies, and their laws can apply to German companies through subsidiaries, listings or conduct in their territory. Deferred prosecution agreements, monitorships and coordinated global settlements are common in foreign enforcement. German prosecutors cooperate with foreign authorities, and the principle that a person may not be prosecuted twice for the same act applies only within certain limits across borders. Companies should therefore assess their exposure in all relevant jurisdictions before making statements in any of them.

Internal investigations without a statutory framework

The failed Corporate Sanctions Act would have created the first statutory rules for internal investigations, linking sanction reductions to standards such as fair interviews and separation from the defence. Without it, companies conduct investigations under general law: employment law, data protection, works constitution law and criminal procedure. Authorities nevertheless take investigations into account when deciding whether to impose corporate fines and at what level, provided they are thorough, independent and shared appropriately. Companies should therefore design investigations as if they will be reviewed by prosecutors, while protecting work product as far as German law allows.

What companies should do

1. Compliance organisation. Maintain a risk-based compliance management system that meets the supervisory standard of § 130 OWiG.
2. Incident response. Prepare for dawn raids and investigations, including privilege protection and communication.
3. Investigations. Conduct internal investigations that are credible to German and foreign authorities.
4. Cooperation decisions. Decide on cooperation with authorities on an informed basis, considering fines, debarment and civil claims.
5. Remediation. Implement and document remedial measures, which reduce fines and support self-cleaning.

Individual liability remains central

Because companies cannot be convicted, German enforcement focuses on individuals. Managers and employees who commit or participate in offences face imprisonment or criminal fines, and management board members can be liable for omissions if they fail to prevent offences they know about. Prosecutors often investigate managers for breach of trust (§ 266 StGB) in connection with corporate misconduct, for example where bribes or fines cause financial loss to the company. Companies must therefore consider the position of individuals when designing investigations and cooperation strategies, including indemnification, payment of legal fees and potential conflicts of interest.

Confiscation as a quasi-criminal sanction

Since the 2017 reform of asset recovery law, confiscation of proceeds under §§ 73 ff. StGB has become a powerful tool against companies. Where a person acts for a company and the company obtains something from the offence, confiscation can be ordered against the company as a third party (§ 73b StGB). Confiscation follows the gross principle: the value obtained is confiscated, with only limited deductions for expenses. Because confiscation does not require guilt of the company, it is available even where no corporate fine is imposed, and it can be secured early in the proceedings by provisional seizure of assets.

Reform outlook

The debate on corporate criminal liability in Germany has not ended. EU directives with turnover-based sanctions continue to push the OWiG model towards higher caps, and academic and political voices periodically call for a comprehensive reform, including rules for internal investigations. Companies should follow these discussions, because a future reform would likely link sanction levels to compliance efforts and cooperation, rewarding those who have already invested in robust systems.

Illustration: a hypothetical German logistics group discovers that a regional manager bribed customs officials abroad. In Germany, prosecutors open proceedings against the manager and consider a corporate fine against the group company under § 30 OWiG, including disgorgement of profits from the affected contracts. In the foreign country, the company itself faces criminal charges. The group coordinates its defence, cooperates with both authorities and documents remedial measures to reduce sanctions and avoid debarment.

How TRW & Co helps with corporate criminal liability

We advise companies and their boards on corporate sanctions risks in Germany and coordinate with counsel in other jurisdictions. We defend companies in corporate fine and confiscation proceedings, conduct internal investigations, advise on cooperation strategies and self-cleaning, and help build compliance systems that meet German and foreign expectations. Our work connects with our white-collar defence and internal investigations practices. See also corporate fines under §§ 30 and 130 OWiG and asset recovery and confiscation. To discuss your exposure, contact us.