Germany has proposed legislation, likely to be ratified this Fall, that would mark a major change in how the government there enforces criminal violations in the corporate sector. The Corporate Sanctions Act, or CSA, would, according to Alisia Grenville, Head of Group Compliance at the Oerlikon Group, allow for criminal prosecutions of companies, not just individuals.
This is a controversial change because historically there has only been criminal liability in Germany for individuals.
The CSA will now allow criminal prosecutions and conviction in cases in which corporate officers or directors commit crimes on the corporation’s behalf, and, crucially, if the entity did not take responsible precautions to prevent employees and agents from engaging in the wrongdoing. This seriously increases the importance of having a compliance program.
It’s especially so given potential fines of 20% of the last three years annual turnover.
Listen in to this podcast to learn more about the proposed law and its extraterritorial reach.