At the beginning of the government, the coalition was still in agreement on the issue of stricter sanctions against companies for rotten meat and diesel scandals, now the Union has finally buried the corresponding draft of the Association Sanctions Act.

The CDU legal politician Jan-Marco Luczak said on Tuesday evening.

When it came to this question, “we were completely wrong”, he said during a discussion event at the German Lawyers' Conference on the subject of “legal policy before the federal election”.

Corinna Budras

Business correspondent in Berlin.

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    The project failed, among other things, due to the handling of internal investigations, i.e. investigations that companies carry out themselves in order to track down misconduct by employees. According to the present draft law, the results of this could have been confiscated by the public prosecutor's office because the company could not rely on the defense lawyer privilege, argued Luczak. In his opinion that would have been counterproductive. Such examinations would then no longer have taken place in the future. The lawyer made it clear that this was not negotiable for the Union.

    This blockade met with harsh criticism from the responsible Federal Minister of Justice, Christine Lambrecht (SPD). She pointed out that there was a "crystal clear" agreement in the coalition agreement. “We finally wanted to create effective and deterrent sanctions for the few criminally acting companies that endanger people through criminal offenses, risk jobs and distort competition,” she told the FAZ and keeps the law. "The Union parliamentary group has refused any parliamentary discussion of the draft law passed by the joint federal government," she criticized. “This is a breach of the coalition agreement for which I have no understanding whatsoever. That shows how little the Union has learned from scandals.“Anyone who wants to learn serious lessons from corruption scandals and windy deals can no longer oppose laws for more integrity and responsibility.

    Draft provided penalties based on sales

    With the “Law to Strengthen Business Integrity”, the coalition wanted to make companies more accountable for the criminal activities of their employees.

    The VW diesel scandal recently revealed how difficult this is under the current legal situation.

    While the penalties in America amounted to a double-digit billion amount, and the first responsible employees have already left prison, Germany is still in the middle of coming to terms with the process: The company itself was prosecuted under the Administrative Offenses Act and had to pay a fine of a good 2.3 billion euros numbers.

    According to Lambrecht's plans, that should change: Similar to antitrust law, fines should in future be based on company sales; this increases the threat potential. Prosecutors should be required to investigate. So far they have had a margin of discretion. The draft law also provided for relief: companies should be able to exempt themselves from liability if they can demonstrate compliance structures and help to solve crimes through internal investigations.

    The draft law, which the coalition approved last autumn, is now shelved. Many companies and associations are likely to respond with relief; Criticism of the project had grown louder and louder in the past few months. Justice Minister Lambrecht, on the other hand, complains that Germany is still lagging behind international standards. The OECD recently called for the implementation of a law on sanctions for criminally acting companies as an important step in the fight against corruption.