Clifford Chance

Germany proposes harsher penalties for corporates

22 March 2018

The long-awaited coalition agreement in Germany may have important implications for the law on corporate penalties. Under current proposals, the maximum amount of pecuniary penalties which may be imposed will increase to 10 per cent of a corporate's revenue. The plans also include incentives to cooperate with authorities and new rules in relation to internal investigations.

No single party secured a majority in the German parliamentary election in September 2017, leading to the formation of a coalition between the Christian-Democratic Union (Christlich Demokratische Union Deutschlands, CDU), Christian-Social Union in Bavaria (Christlich-Soziale Union in Bayern, CSU) and the Social-Democratic Party (Sozialdemokratische Partei Deutschlands, SPD). The coalition partners presented their coalition contract on 7 February 2018. Amongst the important features of this contract are proposals for comprehensive reform of the law on the penalties which may be imposed on corporates (in particular in relation to criminal misconduct committed by employees) and separate new regulations governing the judiciary.

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