Section 19 AWG Regulatory Offence Proceedings

By Dr. Julius Hagen, Attorney at Law

Receiving a notice of allegations or a fine

Proceedings under section 19 AWG may concern negligent conduct, inaccurate information or a breach of procedural duties. Each offence has its own requirements and fine range. Even a case without a criminal allegation may have serious financial consequences for the company.

If you are invited to respond to an allegation, we establish what is alleged and whether you should comment. Once a formal administrative fine notice has been served, the objection period is generally two weeks. The objection must be lodged with the authority that issued the notice. Under section 22(3) AWG, this is usually the main customs office, although statutory exceptions apply. A pending BAFA licensing application is a separate procedure.

Errors in a BAFA application

False or incomplete factual statements in a licensing procedure may lead to a regulatory fine. This also applies to information provided for a Nullbescheid, in which BAFA confirms that the transaction examined does not require an authorisation. It does not provide general clearance for later transactions involving the same product.

We compare the application and attachments with the technical data, recipient and intended end use. The key questions are which statement is alleged to be wrong, who submitted or used it and what that person knew. If false information was used to obtain an authorisation, a criminal allegation may arise as well.

Breaches of export duties

Other allegations concern duties to present goods to customs, make a declaration or provide information and records. The allegation needs to identify which duty the person is said to have breached and when. We examine how the export was actually carried out.

An allegation of negligence turns on whether the person could have avoided the error by exercising the required care. Handovers between departments, training received and the person's authority to approve transactions may be relevant. A supervisory breach or a fine against the company requires its own legal basis.

When the matter may become a criminal case

Section 19(1) AWG covers negligent commission of specified acts criminalised by section 18 AWG. Section 19 AWG also contains separate regulatory offences. Whether an error occurred and what consequences it carries can therefore be assessed only by examining the particular offence.

In certain sanctions cases involving listed dual-use goods, gross negligence is itself criminal under section 18(8a) AWG. Before admitting an organisational failure or a particular state of knowledge to the authorities, you should establish which provision applies in the version in force at the time.

Requirements for voluntary disclosure

Section 22(4) AWG provides for non-prosecution of specified negligent breaches under section 19(3) to (5) AWG. The breach must have been discovered through internal controls and reported voluntarily to the competent authority. Appropriate steps must also have been taken to prevent recurrence for the same reason. The authority must not already have begun investigating that breach.

The rule does not cover breaches under section 19(1) or (2) AWG or provide immunity for sanctions crimes. Before a disclosure, we establish whether the offence falls within the provision, whether the report can still be voluntary and whether the remedial steps are sufficient. Those conditions should be supported by records.

How much the fine could be

The fine range for an individual regulatory offence follows section 19(6) AWG and the general rules. Section 19(7) and (8) AWG contains a special rule for corporate fines: the specified cases connected with section 18(1) AWG carry a maximum of EUR 40 million. That maximum does not apply to every inaccurate BAFA application. Under the general rules, the statutory ceiling may be exceeded to remove the financial benefit obtained.

We represent you when responding to allegations and challenging a fine, examining the grounds for contesting both liability and the amount. We also consider possible confiscation and consequences for later licensing procedures. Where several individuals or companies are involved, we establish whether their interests allow joint representation.