report relies mainly on the anonymous case information provided by the federal ministry to the OECD Working Group on Foreign Bribery in February 2013.
Inadequacies in Legal Framework Germany is one of the few Parties to the OECD Anti-Bribery Convention which has not ratified the UN Convention against Corruption (UNCAC).226 It has also failed to ratify the two Council of Europe conventions on corruption. This hampers international cooperation in foreign bribery cases with countries that are not Party to the OECD Anti-Bribery Convention.227 Although the institution of criminal liability for corporations would increase the variety and strength of sanctions available against companies for bribing abroad, the German government has not endorsed its introduction.
Inadequacies in Enforcement System In 2008, improvements were made to whistleblower protection in the public sector, however, similar standards of protection have still not been established in the private sector.228 The consequences for companies found guilty of engaging in corrupt practices are not severe enough. A register of companies which have been engaged in corrupt practices does not exist in Germany despite a number of draft bills proposing its establishment. Such a register would be used to support the debarment of companies found guilty of corrupt activity from winning public procurement contracts. Export credit support is currently not systematically withheld from companies convicted of corruption offences. The OECD Working Group on Bribery in their Phase 3 report on Germany noted that “sanctions imposed to date against individuals have generally been within the lower range of available sanctions and that most prison sentences have been suspended,” they added that, “these sanctions may not always be fully effective, proportionate and dissuasive.”229
Recent Developments In October 2012, the German Bundestag (Parliament) began the process to adopt an amendment to the Ordnungswidrigkeitengesetz (Act of Regulatory Offences) which would increase the maximum monetary fine that can be imposed on legal persons for offences under the act, including foreign bribery offences, from €1 million to €10 million. Power to investigate and prosecute most criminal and administrative offences are devolved to the Länder (regions) and the federal authorities have no supervisory powers. Many provinces have chosen to establish specialised prosecution units, and cooperation and information exchange between these units has increased steadily over the years. This is to be commended and the results can be seen in the leap forward in terms of the number of investigations commenced in 2012.
Recommendations for Priority Actions Ratify the UNCAC and Council of Europe anti-corruption conventions. Introduce criminal liability for corporations. Adopt and enforce the amendment to the Act of Regulatory Offences to increase sanctions available against legal persons. Increase the level of sanctions available for individuals. Establish a central register for the purpose of debarring corrupt companies from public contracts. Introduce improved whistleblower protection for the private sector.
226 Japan, Germany, Czech Republic and New Zealand are the only Parties to the OECD Convention who have not yet ratified the United Nations Convention against Corruption, see www.unodc.org/unodc/en/treaties/CAC/signatories.html. 227 The Council of Europe treaties, www.conventions.coe.int/Treaty/Commun/ListeTraites.asp?CM=8&CL=ENG. 228 The “Dienstrechtsneuordnungsgesetz” (Law with new regulations for the civil service) was passed by the Bundestag on November 12, 2008, and the “Neues Beamtenstatusgesetz” (New Law regulating the status of civil servants of the Länder) on June 17, 2008. These new Laws allowed civil servants to report serious crimes, including corruption, directly to a public prosecutor instead of to their immediate superior. 229 The OECD Working Group on Bribery, Phase 3 Report on Implementing the OECD Anti-Bribery Convention in Germany, March 2011, page 5, see also pages 28-36, www.oecd.org/daf/anti-bribery/antibriberyconvention/Germanyphase3reportEN.pdf.
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