August 26, 2020 /
In 1991, a married couple concluded a notarized contract of inheritance by which they mutually appointed each other as heirs and also agreed that one of their three children should receive a plot of land with a house, as he had agreed to support his parents in their old age. So far, horrendous penalties for large companies, often in the billions, have mainly come from the USA, while companies in Germany usually face significantly lower penalties. Justice Minister Lambert of the SPD wants to change this and ensure that companies will have to pay significantly higher penalties to the German authorities in future.
Significantly more severe penalties for intent & negligence
To this end, the minister wants to introduce a law to “Strengthening integrity in the economy” which provides for penalties of up to 10 percent of a company’s annual turnover for intentional offenses. In the case of negligence, the new upper limit is 5 percent. A reduction will only be possible if the companies concerned participate in the investigation themselves.
For large companies, this move by the Federal Minister is causing unrest, particularly in the legal departments, as the potential future penalties under the new law would increase twenty-fold.