Germany's anti-bribery laws go the distance (Part 1)
Monday, April 14, 2014 at 7:28AM
Julie DiMauro in Act on Combating International Bribery, EUBestG, European Union Anti-Corruption Act, FCPA, Germany, IntBestG, Markus Funk, OOECD Anti-Bribery Convention, Organisation for Economic Co-operation and Development, Siemens AG, UK Bribery Act

This post, the first of two parts, is based on an article that first appeared in the Magazine of the Deutsch-Amerkanische Juristen-Vereinigung by T. Markus Funk. Mr. Funk is a partner at Perkins Coie specializing in global anti-corruption compliance and internal investigations. The article is here

The OECD Working Group on Bribery said in 2011 that Germany had assumed a "leading position in the investigation and prosecution of foreign bribery cases."

In its June 2013 Annual Report, the OECD ranked Germany second in total number of bribery cases since 1999 (after the United States), with the UK ranked a fairly distant third.

German anti-corruption laws have these features:

In 1998, Germany signed onto anti-corruption protocols issued by the European Union and the OECD. Taken together, the European Union Anti-Corruption Act (EUBestG) and Germany's implementation of the OECD's Anti-Bribery Convention, called the Act on Combating International Bribery (IntBestG), greatly expanded Germany's anti-corruption focus.

The EUBestG prohibits offering and receiving bribes within the territory of the EU. The IntBestG prohibits the bribing of both domestic and foreign public officials.

German enforcement efforts since the implementation of these laws has been impressive. Between 2005 and 2010, 69 individuals were sanctioned for corruption-related offenses, including 20 who were tried criminally.

Since 2007, six companies have been found liable under German law for corruption-related offenses. 

One of the most notable of these enforcements involved Siemens AG, which resulted in the industrial conglomerate paying almost €600 million ($833.2 million) to German authorities for bribes in a number of countries to secure public-works contracts.

Siemens paid a fine of €395 million ($569 million) to the Office of the Prosecutor General in Munich in December 2008 after previously paying €201 million ($285 million) to the Munich Prosecutor in October 2007.

Siemens also paid about $800 million in fines and disgorgement to the U.S. Department of Justice and the Securities and Exchange Commission, still the largest payout in FCPA enforcement history.

The OECD called Germany's action against Siemens a "striking example" of how to prosecute a case based on "breach of trust" rather than outright bribery. Using this strategy, individual defendants were convicted of breach of trust for establishing slush funds to be used for bribes, while Siemens was found liable as a company for the bribery offenses.

In Part 2, we'll examine basic compliance steps companies should consider when doing business in Germany.

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Julie DiMauro is the executive director of FCPA Blog and can be reached here.

Article originally appeared on The FCPA Blog (https://www.fcpablog.com/).
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