With the upcoming introduction of the new Corporate Sanctions Act, Dr. Christoph Klahold, Member of the Board at DICO – Deutsches Institut für Compliance e.V. (German Institute for Compliance) and Senior Advisor at BCG Consulting Group, and Dr. Eike Bicker, Partner at Gleiss Lutz Hootz Hirsch, provided the committee with an overview of the draft bill as well as the required action items to ensure sound compliance and proper preparation.
Based on the current draft of the bill, sanctions of up to 10% of a group’s annual turnover can be imposed on companies either for criminal offenses committed by senior management or for omission of adequate compliance measures in the event that any other employee has committed a crime violating corporate duties.
This tightened yardstick will be balanced by incentivizing carrots in form of reduced fines for compliance, internal investigations, and cooperation with the prosecutor. The new law will have significant impact on foreign, and in particular, US companies which operate in Germany.
The meeting included an overview of the key and new provisional aspects of the Corporate Sanctions Act as well as impact on corporate responsibility. Furthermore, the framework of the sanctions as well as the further impacts on companies and directors within the context of internal investigations was discussed. The committee members concluded with key takeaways and required next steps to prepare for the future.