Corporate Fine against a Company

By Dr. Julius Hagen, Attorney at Law

Corporate fines without a separate corporate criminal offence

Germany has no separate corporate criminal offence in the strict sense. A company may nevertheless face a fine under section 30 OWiG where a management figure commits a criminal offence or administrative offence that breaches duties owed by the company or is intended to enrich it. A breach of operational supervisory duties under section 130 OWiG may also lead to an association fine.

The defence must therefore address two levels together: the underlying offence and the organisation in which it is said to have been enabled, facilitated or left unchecked. The authorities may examine not only emails or payments, but also responsibilities, approvals, controls, training and the company’s response once the issue became known.

Section 30 OWiG: attribution through a management figure

Section 30 OWiG links a corporate fine to the conduct of specified management figures. This includes authorised representatives, senior authorised signatories and persons responsible for directing or controlling the business. A fine against the company requires the criminal offence or regulatory violation to have breached duties owed by the company or to have been intended to enrich it.

The defence must therefore examine the person’s actual function and the connection to a corporate duty. Formal office alone does not answer every question, and it is equally insufficient to say in general terms that the person acted for the company. Decision-making authority, internal rules, economic benefit and the specific breach must be identified.

Association fines in independent proceedings

Under section 30(4) OWiG, the fine against the company may be imposed independently. This is possible where no proceedings are initiated for the underlying criminal offence or administrative offence, proceedings are discontinued or punishment is waived. The end of, or failure to initiate, the individual proceedings therefore does not automatically resolve the company’s exposure.

In independent proceedings, the notice is directed against the legal entity or association itself. The company must organise its own procedural position, access to the file and defence. Section 88 OWiG also assigns the administrative authority responsibility for participation in the proceedings and the appointment of defence counsel.

Section 130 OWiG: supervision and corporate organisation

Section 130 OWiG concerns the failure to take required supervisory measures. It applies where a violation of a duty owed by the business owner occurs and proper supervision would have prevented or materially impeded it. Supervision includes more than individual checks; it also covers the selection, appointment and monitoring of suitable supervisors.

In practice, the focus is the organisation as it operated. The review should cover approval authority, required control steps, the escalation of warnings, training, four-eyes controls, spot checks and documented responses. A compliance narrative assembled after the event is no substitute for examining what actually happened.

Fine levels and the economic benefit

The amount is not determined solely by the nominal loss. Under section 17(4) OWiG, the fine should exceed the economic benefit obtained from the administrative offence. In a section 30 case, the benefit, avoided costs, duration of the conduct, economic significance and importance of the breached duty may therefore affect the assessment.

Calculating the benefit is often a separate point of dispute. Revenue, margins, saved expenditure and hypothetical lawful alternatives must be kept distinct. A sound defence examines the calculation base, the relevant period and the causal link between the alleged conduct and the claimed corporate benefit.

The fine notice, objection and court review

A fine notice against the company identifies the allegation, the evidence relied on, the fine and any additional consequences. An objection may be lodged within two weeks after service. The defence must therefore establish immediately when and to whom the notice was served and which legal entity or association is named as the person concerned.

An objection should not be considered separately from the factual and file review. The scope, reasons, further evidence preservation and the risk that a parallel defence of management may harm the company’s position must be assessed. The matter may then proceed to further administrative and, where applicable, court review.

Compliance, internal investigation and cooperation

Once an issue is reported or an investigation begins, the company must preserve evidence and decide whether an internal investigation is required. Email reviews, employee interviews and reports may clarify the facts, but they can also create conflicts, data-protection issues and later seizure risks. The mandate, access, documentation and legal relationship should be defined before the work begins.

Cooperation with the authorities does not automatically follow from an internal investigation. It must be aligned with the defence objective, the evidence, the procedural stage and the company’s interests. Improved controls, training and remedial measures may be relevant to the assessment of the company’s conduct; they do not replace the examination of the underlying offence and supervision position.

Separate defence for the company and management

The company’s interests in regulatory proceedings do not necessarily coincide with those of the managing director or employee whose conduct is said to have triggered the allegation. The company may deny a breach of duty while the individual defence requires a different account of responsibilities or personal knowledge. Information from an internal investigation may help the company’s defence while exposing an individual.

Before the mandate is accepted, it must therefore be clear who the client is, who may receive internal information and which communications remain confidential. Where interests conflict, separate defence strategies and clear information boundaries are required. A corporate fine is therefore not only a calculation issue; it is also a question of procedural and communication architecture.