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Criminal Economic Law

Criminal economic law is influenced by numerous other areas, e. g. social security law and commercial law. It has many facets and is not limited to offenses against property like fraud or breaches of trust. In fact, criminal economic law comprises all criminal offenses which are immediately connected to economic transactions, e. g. tax evasion, corruption, fraudulent insolvency, customs offenses, and cartel agreements. In all such cases, social and technological changes must also be taken into account.

It is our goal to keep you informed about and provide advice on such changes as well as changes in law and jurisdiction. We consult you not only with regard to aspects concerning criminal law; we also consider possible consequences in other areas. It is therefore important to keep an eye on the financial impact which losing a management position, a possible bankruptcy, an occupational ban or other disadvantages might have.


Withholding and embezzling of salaries § 266 a StGB – “under the table"

The headline of § 266 a of the “Strafgesetzbuch“ (penal code) makes one falsely think that it is about the description of a criminal act by the employer, if he or she does not pay the salary as agreed in the contract. However, this paragraph actually describes the employer’s duty to deduct social security fees. Failing to pay these fees at the appropriate time already constitutes an offense in the sense of the above paragraph. Cases in this area usually deal with dummy firms or a fraudulent construction of minor employment to avoid social security payments. In the beginning, prosecution focused on jobs in construction but has now expanded to include other sectors such as gastronomy or health care. Due to an amendment with regard to the minimum wage (1st January 2015), one can expect lawsuits in this context as well, since falling short of the minimum wage usually raises the suspicion that the payment of social security fees is avoided. What is particular about this situation is not only the fact that the prosecution is led by the main customs office but also the fact that this usually also involves lawsuits in social as well as in fiscal law. For example, if social security fees are not paid, there will be an interest rate of 1% for every month these fees are not paid in full. Therefore, a strategy during prosecution must keep an eye on the consequences with regard to social and fiscal legislation for everyone involved. Due to our vast experience in the field, our office has access to a well-structured network involving other law firms and tax advisors, which facilitates an easy collaboration and comprehensive handling of all legal matters.

Regulatory Offenses Law (incl. Criminal Law of Corporations and Enterprises)

Regulatory Offenses Law is a vast area in legislation which is mainly known from traffic violations. Other than that, it also plays an important role in other sectors, e.g. unlawful temporary employment, unfair competition and cartel law, negotiable instruments law, the German Banking Act, arms law, fiscal law, commercial law, right of residence, patent and trademark law. In Regulatory Offenses Law, the legislative body considers an act as punishable through a monetary fee, but not as a criminal offense. A lawsuit will only be triggered if the defendant objects to the fine. Such an objection including an inspection of the respective records can be especially rewarding with regard to traffic violations. A lawyer can then verify through the records if the allegations are just, since there are often mistakes in connection with speed and distance measuring. An objection can also be sensible with respect to the new points system. For companies, § 30 OWiG (the penal code for regulatory offenses) is of particular importance, as it explicates how companies can be punished for socially detrimental behaviour (contrary to general criminal law). In this context, harsh fines which threaten a company’s existence are possible.

Criminal Fiscal Law / reporting yourself to the authorities

Fiscal lawsuits have recently gained much significance and attention. Prosecution transgresses borders and the lawsuits themselves are often used in a “political” way. The “Abgabenordnung” (taxation code) and the “Einkommensteuergesetz” (income tax law) form the relevant basis for criminal fiscal law. Due to the complexity and the size of the legal material, we have made the experience that hardly anyone is safe from prosecution. Like with all preliminary proceedings, a lawsuit can already be initiated if there is only a preliminary suspicion, irrespective of the final verdict. Giving contradictory or incomplete details in your income tax statement can already trigger prosecution by the tax authorities, which can counteract the remedial effects of reporting yourself to the authorities. Should you be considering this step, it is vital that the tax authorities have not started prosecution yet and that a tax audit has not been formally ordered yet, either.

Banking and Capital Markets Law

Financial institutes and the capital market are under strict public control, which is exercised by the “Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin)” (federal agency for financial market supervision). BaFin has the task to monitor and enforce legal regulations; it has also the right (and in some cases the duty) to report the results to law enforcement agencies. While illicit banking business, insider trade, market manipulation and investment fraud all constitute criminal acts, the legislative body considers some behaviour with this area as regulatory offenses, for which harsh fines are a real possibility.

Criminal Insolvency Law

Criminal Insolvency Law penalises behaviour which prohibits insolvency proceedings in due form. This includes insufficient accounting, not paying social security fees and, above all, delayed filing for insolvency. Apart from going after natural persons, public prosecution focuses more and more on the representatives of legal persons and their advisors (where necessary). Lawsuits in this context may often result in the verdict that the company’s representatives are civilly liable to the creditors.

Criminal Environmental Law

Criminal Environmental Law serves the purpose of preserving natural resources by penalising the pollution of soil, water and air as well as the illegal disposal of waste and the illicit running of certain facilities. Apart from these criminal acts as defined in the “Strafgesetzbuch” (penal code), there are several others, which can be found in side law, such as the “Bundesnaturschutzgesetz” (federal law for nature protection), the “Atomschutzgesetz” (atomic energy law) or the “Pflanzenschutzgesetz” (plant protection law). It must be noted that even an abstract hazard already constitutes a punishable offense.

Criminal Medical Law

In general, every invasive medical procedure constitutes an act of assault, unless it is sanctioned by a valid form of informed consent. Therefore, informing the patient about risks and benefits of a medical procedure is of vital importance, since this is also the starting point of every legal examination. Apart from the existence of a valid form of informed consent, the procedure must be carried out skilfully (de lege arte). In the past couple of years, malpractice cases and hygienic problems gained more and more public attention. Often, these lawsuits are not limited to civil damage claims but also trigger public prosecution, which focuses not only on the persons immediately responsible for criminal behaviour but also on people in management positions (e. g. in hospitals). What is more, authorities harshly prosecute more and more cases of fraudulent invoicing and cooperate with other authorities, such as the Associations of Statutory Health Insurance Physicians. In all these cases, the defendants not only risk a sentence and an entry in their criminal record, they may also lose their medical license and run the risk of an occupational ban.

General Criminal Law

The label “Allgemeines Strafrecht” (general criminal law) covers all offenses which are regulated by the “Strafgesetzbuch” (penal code). This includes offenses against property (fraud, theft, breaches of trust), assault (bodily harm, manslaughter, robbery), traffic violations (driving while intoxicated, dangerous interference with road traffic), sexual offenses (sexual abuse, rape, distribution and ownership of illegal pornography), document fraud (forgery or falsification of documents, constructive false certification), false statements (false statement made while not under oath, false accusation), libel.

Criminal Narcotics Law

The “Betäubungsmittelgesetz (BtMG)” (narcotics law) actually describes the norms of Administrative Law, which regulates the production, distribution and import/export of narcotics. §§ 29 ff of the above law form the legal basis for criminal narcotics law, in which (amongst other things) ownership, purchase and trade of forbidden narcotics are penalised. Depending on the nature of the case (e.g. armed trade, commercial trade) prison sentences of several years are possible, which cannot be suspended on probation. During our many years in this field, we have experienced the fact that the authorities fully use and sometimes even abuse their powers during prosecution. It is therefore of great importance that the defendant is fully aware of his or her procedural rights and can observe them accordingly.

Juvenile Criminal Law

The main idea behind juvenile criminal law is to educate the culprits. Other than in criminal law for adults (where sentences come in the form of fines or prison sentences), the legislative body has introduced other means of correction, such as directives (community work, social trainings), educational help, reprimands, imposing conditions (apologising to the victim, reparations) and juvenile detention. If the court does not think that any of the above measures are sufficient, it has the power to give a custodial sentence. According to § 1 “Jugendgerichtsgesetz (JGG)” (youth courts law), there is a difference between youngsters and adolescents. While juvenile criminal law always applies to youngsters (14 to 18 years of age), it only applies to adolescents (18 to 21 years of age), if the moral and cognitive development of the defendant matches that of a youngster.

Representation of the victims

As a victim or a witness, it is possible to seek legal assistance; in some cases it is highly recommended. The victim generally has the task to give a witness account and describe in all detail what he or she had experienced. The witness will be confronted with many questions by the court, the prosecutor as well as the defence attorney. From the defence’s point of view, the victim is a witness for the prosecution, which is why he or she usually has to face unpleasant questions. Having a lawyer at your side makes things much easier, also psychologically. He or she cannot answer the questions for the witness but can protect him or her from unjust questions or at least support the witness. Irrespective of the fact that a victim can also be a witness, victims have further rights which do not apply for “regular” witnesses. While a witness is not allowed to examine the files, the victim’s lawyer has the right to request this (according to § 406e “Strafprozessordnung (StPO)” (code of criminal procedure)). However, the victim itself only receives “information and copies”. This is also a reason why it makes sense to consult a lawyer who is familiar with victims’ rights. Only after a lawyer has examined the files can the victim receive an evaluation of the possible success of the trail, which is often a great psychological relief. If the prosecution decides to drop the case against the culprit, there are still circumstances under which the victim can force the prosecution to take up the case again. In some cases the prosecution points to the possibility of a private lawsuit, which forces the victim to decide whether he or she wants to pursue the matter further. If the offense is prosecuted, the victim can take an active part in court by filing an ancillary suit (§ 395 “Strafprozessordnung (StPO)” (penal code)), through which the victim has more or less the same rights as the prosecution, the defence and the defendant. In an ancillary suit, an adhesive procedure is used to claim civil damages, such as compensation for loss, pain and suffering.

compliance

„He had to knock his head against some trees, before he realised that he was barking up the wrong one.“ (Wilhelm Busch)

We can help you stop barking up the wrong tree so you can recognise the criminal risks of your economic behaviour. Compliance means that you know about the relevant laws and guidelines and act accordingly. The task is to be aware of the connections between various areas of the law and to be able to evaluate legal consequences. Structures and processes within the company need to be analysed and evaluated from a legal point of view. Only a successful compliance consultation can prevent long and expensive criminal and summary proceedings, which can also have far-reaching consequences for the management of a company, as some persons may be banned from taking up a leading position. We will work with you on a compliance concept, which may include the introduction of trainings and entrepreneurial principles as well the development von control mechanisms and guidelines how to deal with registered offenses.

The penal system

If a trial ends with a prison sentence for the defendant, inmates and their family and friends suffer from massive psychological stress due to the enormous number of restrictions. The legal regulations of the penal system are difficult to grasp for prison inmates, which often leads to the fact that they do not exercise their rights. What is more, specific knowledge is necessary with regard to privileges and early release from prison.