1. Introduction

On 28 June 2025, the German Accessibility Reinforcement Act (Barrierefreiheitsstärkungsgesetz, BFSG) entered into force with the objective of digital inclusion. People with disabilities, handicaps and elderly people should be given equal access to products and services that are important for participation in life in society. This entails new obligations for companies. Violations may result in fines and other sanctions. 

2. Who is affected?

The Act applies to companies that place the products specified in the BFSG on the market or render services after 28 June 2025. This includes, in particular, banking services for consumers, telecommunications services, electronic ticketing services, self-service terminals such as ATMs or ticket machines, hardware systems and their operating systems for consumers (computers, tablets, notebooks), devices with interactive performance capabilities such as smartphones and smart tvs, e-books and e-readers. 

In addition, the requirements of the BFSG also apply to all electronic commerce services. Thus, every company is concerned that sells its products or services via an online shop.

This applies in principle to all companies operating in the relevant areas. In case of services, only micro enterprises are exempted that offer employment to less than ten people and have an annual turnover or an annual balance sheet total of no more than EUR 2 million. However, they should receive advisory services in order to be able to provide services that are accessible to everyone. Companies, that manufacture, import or distribute products, must also meet the requirements of the BFSG as micro enterprises. 

Accessibility requirements, however, must only be met if their compliance does not require any fundamental change in the essential characteristics of a product or a service. The manufacturer or service provider must document such an assessment and submit it to the competent market surveillance authority upon request.

In addition, the accessibility requirements apply only insofar as their compliance would not result in a disproportionate financial burden on the company. Companies are obliged to carry out and document an appropriate assessment before providing a product or service and to inform the competent market surveillance authority immediately.

3. What needs to be done?

The BFSG transposes the EU Directive 2019/882 ("European Accessibility Act", shortly EAA) into German law. It obliges the addressees to make the products and services covered accessible und provide information. 

3.1 Ensuring accessibility

Products and services must meet specific requirements for accessibility. They are barrier-free according to the legal definition in section 3 (1) sentence 2 BFSG if they can be found, accessed and used by people with disabilities in the usual manner, without any particular difficulties and generally without external help. Regarding the specific requirements, the BFSG refers to the Regulation on the Accessibility Requirements (BFSGV) (in German).

Products must contain components, functions and characteristics that enable people with disabilities to access, perceive, operate, understand and control the product. The same applies to the product packaging, user instructions and warnings. For instance, they must be made available via more than one sensory channel, must be easy to find and linguistically understandable and must be displayed in an appropriate font size.

Services must provide for functions, procedures and possible changes in the performance that are tailored to the needs of people with disabilities. This relates, in particular, to information on the functioning of the service. Comparable requirements for the comprehensibility and perceptibility apply here as for product packaging.

If services are offered online, the corresponding websites, including mobile apps, must also be designed to be perceptible, operable, understandable and robust. This includes ensuring interoperability with assistive technologies, such as screen readers.

In addition to these general requirements, the BFSGV contains numerous additional regulations regarding certain products and services, such as telecommunications services, banking services or e-books. 

When fulfilling the requirements of the BFSGV, companies must observe the state of the art. For products and services that comply with harmonised standards or technical specifications, it is presumed that they meet the requirements of the BFSGV. 

Manufacturers and providers may only place their products and services on the market and/or offer them if they meet the accessibility requirements. Traders must monitor compliance with these obligations of the manufacturer and may only make a product available on the market if it is compliant. If there is reason to assume that a product does not meet the accessibility requirements, traders may not distribute it.

3.2 Information obligations

In addition to the implementation of the accessibility requirements, service providers are also obliged to provide information on how these requirements are actually met. Additionally, this information must contain at least a general description of the service in an accessible format, descriptions and explanations that are required to understand the performance of the service, and the indication of the competent market surveillance authority.

This information can be included in the General Terms and Conditions used, but may also otherwise be made available, e.g. via a separate link on the website, as far as this is clearly perceptible.

3.3 Effects on GTC & data protection declarations

Insofar as a product or service must be made accessible without barriers pursuant to the BFSG, all contents that functionally belong to the product or service must also be accessible without barriers. For instance, this may concern GTC, but also data protection declarations. 

In this case, it must be ensured in particular that there is a text structuring through headings, there are alternative texts for embedded images or other media, a clear, comprehensible language is used, the font size and contrast are appropriate, and the compatibility with screen readers is guaranteed.

4. Implementation deadlines and transitional provisions

In principle, companies have had to meet the new accessibility requirements since the Act came into force, thus, since 28 June 2025. Partially, transitional provisions take effect. By 27 June 2030, services may be provided using products that have been used lawfully by the service provider already before 28 June 2025. Agreements on services concluded before 28 June 2025 must be adapted by 27 June 2030 at the latest.

Self-service terminals that companies used to provide services before 28 June 2025, may continue to be used until the end of their economic useful life, but for no longer than fifteen years after they are put into use.

5. Sanctions

Negligent and wilful violations of certain requirements of the BFSG are subject to fines of up to EUR 10,000 in minor cases and up to EUR 100,000 in serious cases. The specific amount of the fine is based on the circumstances of the individual case. 

The market surveillance authorities of the federal states verify compliance with the requirements of the BFSG. This task should be carried out by the "Market Surveillance Authority of the Federal States for the Accessibility of Products and Services" (Marktüberwachungsstelle der Länder für die Barrierefreiheit von Produkten und Dienstleistungen, MLBF) centrally in the future. In addition to the imposition of fines, market withdrawals of non-compliant products and a prohibition of service provision are imminent.

Administrative offence proceedings can be initiated ex officio, at the request of a consumer, an association recognised under the German Act on Equal Opportunities of Persons with Disabilities (Behindertengleichstellungsgesetz) or a consumer protection association. Competitors may also take action against alleged violations by way of a warning under competition law. In this case, the assertion of claims for injunctive relief and damages is imminent.

6. Recommended course of action

Companies should verify whether they are addressees of the obligations of the BFSG. If necessary, they should check their digital offers for accessibility and adapt them where appropriate. An accessibility audit or a quick check may help to identify and to remedy weak points in the technical implementation of accessibility requirements or of information obligations.  

However, it can also make sense for companies that do not fall within the scope of the BFSG to improve the accessibility of their products and services. In addition to an image gain by supporting inclusion of disadvantaged people, this may also lead to a measurable increase in sales, by reaching new customer groups.

Kristin Trittermann, LL.M.
Mathias Zimmer-Goertz

The Corruption Directive-D is intended to overcome obstacles that have been identified in cooperation between the authorities of the various Member States. The existing instruments, i.e. the Council Framework Decision 2003/568/JHA and the Convention on the fight against corruption involving officials of the European Communities or officials of Member States of the European Union, are not comprehensive enough in the opinion of the Council, as corruption is prosecuted differently from Member State to Member State. The recitals of the Corruption Directive-D state, among other things, that:

[…] These instruments are, however, not sufficiently comprehensive, and the current criminalisation of corruption varies across Member States hampering a coherent and effective response across the Union.

"[…] Corruption is a transnational phenomenon that affects all societies and economies. Measures adopted at national or Union level, should recognise this international dimension. […]"

In Chapter 2 "Corruption Offences", the Corruption Directive-D provides for minimum standards for

• offences (see 1),
• penalties and measures for natural persons and/or legal persons (see 2), and
• a catalogue of mitigating circumstances (see 3).

1. Offences under the Corruption Directive-D

The following offences are proposed:

• Bribery in the public sector, Art. 7 Corruption Directive-D,
• Bribery in the private sector, Art. 8,
• Misappropriation, Art. 9,
• Trading in influence, Art. 10,
• Abuse of functions, Art. 11,
• Obstruction of justice, Art. 12, and
• Enrichment from corruption offences, Art. 13. 

Articles 7 to 9, Article 12 and Article 13 define minimum standards for offences already contained in the German Criminal Code (Sections 331 et seq., 299, 266, 246 (2), 240 and 261 of the German Criminal Code). In this respect, adjustments may need to be made at most. Necessary adjustments with regard to the definition of advantage (see 1.1) and the effects of the definition of "public official" (see 1.2) are to be emphasised.

Articles 10 and 11, on the other hand, define minimum standards for criminal offences that are not yet known in this form in German criminal law and would therefore have to be newly introduced. Of particular note here is the trading in influence (Art. 10) (see 1.3). Unlike the European Commission's proposal of 03 May 2023, the Corruption Directive-D does not provide for attempted criminal liability (see 1.4).

1.1 The "undue" advantage 

Art. 7 defines advantage differently from Sections 299 and 331 et seq. German Criminal Code. While any advantage is sufficient for criminal liability under Sections 299 and 331 et seq. German Criminal Code, Art. 7 requires an undue advantage. The German Criminal Code already recognises this addition from Sections 108e and 108f German Criminal Code. According to the explanatory memorandum to Section 108e German Criminal Code, it is intended to take account of the special nature of bribery of members of parliament, as there are benefits in the political arena that appear to be permissible under general parliamentary practice. However, it is doubtful whether this principle can also be applied to the other corruption offences under the German Criminal Code. 

1.2 The definition of "public official"

The term "public official" is used throughout Art. 7 et seq. and is legally defined in Art. 2 para. 2. Public officials are accordingly Union or national officials of a Member State or a third country as well as persons who have been entrusted with public functions under national law and carry out such functions or persons who have been entrusted with public functions for an international organisation or international court and carry out such functions.

The term ‘national official’ according to Art. 2 para. 2 lit. a) ii) covers any person holding an executive, administrative, or judicial office at national, regional or local level. Thus, the Corruption Directive-D assimilates any person holding a legislative office to a national official. According to these guidelines, the German legislator would have to abandon the current differing criminal law treatment of elected representatives and public officials and establish a harmonised system.

1.3 Trading in influence, Art. 10

Art. 10 criminalises the so-called trading in influence. In contrast to the bribery offences under the German Criminal Code, an offence is to be introduced in which the advantage is not promised or granted to a public official. The advantage is promised to a person who "exerts illicit influence over a decision or measure to be taken by a public official in the exercise of that official’s functions" with a view to obtaining an undue advantage from that public official. As a result, a preparatory act in a tripartite constellation of persons is criminalised, which the German Criminal Code has known for the first time since the introduction of Section 108f German Criminal Code and which we have already examined here.

1.4 Attempted misappropriation

Unlike the Proposal for a Directive of the European Commission on combating corruption dated 03 May 2023, the Corruption Directive-D does not provide for attempted criminal liability. The reason for this could be the criticism of the introduction of attempted misappropriation.

2. Penalties and measures for natural and legal persons

For natural persons, Art. 15 provides for minimum standards for a maximum term of imprisonment (at least two years to four years as a maximum). In addition, it will be possible under Article 15 para. 4 to impose further sanctions such as fines, the removal, suspension and reassignment from a public office, or withdrawal of permits and authorisations to pursue activities that resulted in or enabled the relevant offence.

For legal persons, the turnover-related fine (Art. 17 para. 3) is to be emphasised in particular. According to this, the maximum level of such fines should not exceed 3% or 5% of the total worldwide turnover of the previous financial year of the legal person, or alternatively at least EUR 24 million or EUR 40 million, depending on the offence.

3. Mitigating circumstances

Art. 18a contains a catalogue of mitigating circumstances that can be transposed into national law. This includes, in particular,

• the implementation of internal controls and compliance programmes to prevent corruption (both prior to or after the commission of the offence), and
• the voluntary self-disclosure and the initiation of remedial measures.

In particular, the consideration of compliance programmes in the assessment of fines now corresponds to established case law. 

4. Outlook for companies

As a result, companies are likely to face higher sanctions in cases of corruption. Companies should monitor further developments in order to be able to adapt their compliance requirements in good time if necessary. 

Dr Oliver Ofosu-Ayeh

1. Introduction

Since 18 June 2024, the "inadmissible representation of interests" by mandate holders has been a criminal offence.

The newly-added section 108f of the German Criminal Code (Strafgesetzbuch, StGB) is to close a loophole regarding criminal liability which became particularly apparent in the aftermath of the Mask deal decision by the German Federal Court of Justice (BGH)¹. Politicians of the Bundestag (German Parliament) and of several German state parliaments received six-figure commissions in exchange for helping companies make lucrative mask deals during the Covid crisis. This, however, went unpunished because section 108e StGB merely criminalises activities in the bodies of the parliament or parliamentary parties, i.e. activities performed during parliamentary work in a plenary session, in the German Parliamentary Committees and in the working groups of the parliamentary parties.²

The goal of the new section 108f StGB is to penalise the ability of mandate holders to exert their influence when they use it for the benefit of third parties in exchange for payment. The explanatory memorandum states in this context:³

"Based on their position, mandate holders regularly have special relationships and privileged access to ministries, authorities and other bodies which are subject to their parliamentary checks. This goes hand in hand with the risk of commercialising the corresponding opportunities to exert influence for the benefit of third parties in return for payment and thus the risk of blurring lines between monetary interests and the mandate. Mandate holders using their roles entrusted to them in the interest of public welfare for their own benefit by trading their influence may undermine the trust in parliamentary democracy and its elected representatives."

Section 108f StGB aims to mitigate this risk.

2. New legal framework - section 108f StGB

Under section 108f (1) StGB, it now is a criminal offence for mandate holders to demand, allow themselves to be promised or accept an undue material benefit for themselves or a third party in return for performing or refraining from performing an act during their mandate to represent interests of a provider of benefits or a third party. Sentence 1 only applies [...] if such representation of interests in return for payment violated the relevant provisions relating to the legal status of the mandate holder.

Examples of "relevant provisions" for members of the Bundestagin section 108f (1) sent. 2 StGB are the provisions of sections 44a et seq of the Members of the Bundestag Act (Abgeordnetengesetz, AbgG).

Section 108f (2) StGB, in turn, penalises the party granting a material benefit.

From now on, both accepting (section 108f (1) StGB) and granting (section 108f (2) StGB) a material benefit "during a mandate" are covered by law, meaning that − unlike in section 108e StGB − no immediate connection with the parliamentary decision-making process is required for criminal liability.

2.1 Section 108f as a pre-emptive measure to fight corruption

Unlike the other criminal law provisions against corruption (sections 331 et seq, 299 et seq and 108e StGB), section 108f StGB constitutes what is called a"pre-emptive anti-corruption delict" (Korruptionsvorfeldbekämpfungsdelikt)⁴. This means that mandate holders make themselves liable to prosecution as soon as they confirm that they may influence the decision of a competent official in favour of a benefit provider in exchange for an undue material benefit. The major difference to the definition of corruption-related criminal offences applied so far is that the service in return must be a material benefit, i.e. not just any advantage at all.

2.2 Reference to the Members of the Bundestag Act

Criminal liability under section 108f StGB requires that the representation of interests in return for payment "would violate the relevant provisions relating to the legal status of the mandate holder" (section 108f (1) sent. 2 StGB). It does not matter whether relevant provisions were actually violated. Neither is an additional connection to the mandate and "taking advantage" of the mandate required because a connection to the mandate already exists due to the fact that such representation of interests is subject to parliamentary law provisions and would violate them.⁵

As a result, mandate holders may now also be subject to criminal sanctions (e.g. section 44a AbgG) for a (potential) violation against relevant provisions, in particular of the Members of the Bundestag Act and the Members of Parliament Acts of the various states. At the same time, the corresponding provisions also become relevant for the provider of benefits because also section 108f (2) sent. 2 StGB requires such violation.

3. Outlook

Companies should use this new risk of criminal liability as a reminder to update their corruption prevention provisions and, in particular, to revise their business partner due diligence. 

Dr Oliver Ofosu-Ayeh
Dr Jochen Pörtge
Franziska Rentel

¹ BGH, decision of 5 July 2022 – StB 7–9/22.
² BT-Drs. 18/476, page 8.
³ BT-Drs. 20/10376, page 1.
⁴ Statement no. 23 of the German Federal Bar regarding the draft law to change the German Criminal Code – criminal liability of the inadmissible representation of interests (BT-Drs. 20/10376), page 4.
⁵ BT-Drs. 20/10376, page 8.

This right to report such violations is protected, inter alia, by Section 39 of the HinSchG, which provides that "Agreements that restrict the rights of whistleblowers or other persons protected by this Act are invalid".

Agreements that are likely to prohibit the reporting of violations are typically confidentiality agreements, also known as non-disclosure agreements (NDAs). They are often found in employment contracts, collective bargaining agreements or works agreements. However, they are also frequently included in contracts with other companies or persons who do not have an employment relationship with the person who is to benefit from the confidentiality. However, the HinSchG not only protects the employees of a company, but also those persons who may obtain information about breaches in connection with their professional activity or in the run-up to a professional activity (see Section 1 (1) HinSchG). The scope of protection is therefore very broad, so that initially all confidentiality and non-disclosure agreements are likely to be affected.

Such agreements typically require that information obtained during or prior to a contractual relationship be used only for its intended purpose, or generally prohibit such information from being disclosed to third parties. It depends, of course, on the precise structure of the agreement. For example, if the wording of the agreement allows reports to be made to internal bodies, the right to report a breach internally will not be affected, but external reports are likely to be affected. The general restriction on disclosure of information, including internally, therefore inevitably restricts the right under the HinSchG to report breaches that occur during the contractual relationship. Nothing remains of the right to report violations if such an agreement generally prohibits the disclosure of internal information to others.

Section 6(2) HinSchG makes it clear that information which is subject to a contractual obligation of confidentiality may nevertheless be passed on or disclosed to the competent authority under the conditions of the HinSchG. In addition, Section 39 HinSchG allows the entire confidentiality obligation to be annulled.

Non-disclosure agreements that do not take into account the rights arising from the new HinSchG are ineffective pursuant to Section 39 HinSchG and are therefore null and void (Section 134 BGB). In most cases, there will also be no room for reinterpretation or extend-ed contractual interpretation in order to save the remaining content of the agreement. This is because confidentiality agreements are regularly pre-formulated for a large number of contracts (Section 305 (1) BGB). They are therefore subject to the control of the general terms and conditions, which excludes a reduction of the confidentiality agreements in order to preserve their validity (Section 306 (2) BGB). They cannot therefore simply continue to exist with the proviso that the person obliged to maintain confidentiality may disclose everything permitted by the HinSchG, but must keep everything else confidential. On the contrary, the new HinSchG carries the risk that confidentiality agreements which do not take into account the protection of the person making the disclosure will be null and void. This in turn means that the person who has promised confidentiality under such an agreement is no longer bound by it and can theoretically disclose information freely, unless this is prohibited by other provisions (such as Section 4 of the German Trade Secrets Act or Section 201 of the German Criminal Code).

There appears to be no impact on contracts concluded before the new law came into force. As the law does not expressly provide for retroactive effect, it cannot be assumed, also for constitutional reasons, that the legislator intended to apply retroactively to older contracts, so that these should not be affected. However, it should be checked whether future confidenti-ality agreements, or the templates or models on which they are based, take sufficient account of the rights arising from the HinSchG, i.e. whether they comply with the require-ments of Section 6 of the HinSchG. At present, we assume that minor amendments will be sufficient to avoid the threat of Section 39 of the HinSchG and the associated ineffectiveness of the confidentiality agreement as a whole.

Fabian Eckstein

The team headed by the Hamburg lawyer and tax advisor is particularly well connected in the financial sector and specialises in representing corporate interests in tax disputes and criminal proceedings as well as vis-à-vis supervisory authorities. It works for several financial institutions in the investigation and defence of cum/ex and cum/cum transactions, regularly advising on tax compliance and tax transparency matters as well as the associated regulatory questions. Internal investigations regarding other criminal offences as well as compliance matters in the context of money laundering prevention and sanctions compliance are also key advisory areas. All lawyers in the team are qualified as Certified AML & Fraud Officers.

Martin Seevers, LL.M. Tax (USA) (55) specialises on preventing, supporting and resolving tax conflicts in the financial sector at the interface of law, tax, compliance and anti-financial crime. He particularly advises on tax and corporate criminal law, anti-financial crime and financial sanctions as well as related compliance issues and internal investigations. He represents companies and individuals in criminal and administrative fine proceedings in and out of court, as well as vis-à-vis financial and other authorities (e.g. BaFin).

Julian Niederlein (36), a licensed tax law specialist, advises particularly on preventing and avoiding conflicts at the interface of tax criminal law and the law of administrative offences. He further specialises on the representation of companies and private individuals in tax dispute and tax procedural law.

Guido Storck, LL.M. Corporate Criminal Law (42) advises banks, insurances and companies on all questions of tax and corporate criminal law, as well as on any related issues that may arise.

"The complexity and increasing regulation of our globalised, digitalised business life mean that private individuals and companies can find themselves facing claims under criminal or administrative proceedings at any time," says Dr Guido Krüger, Co-Managing Partner of ADVANT Beiten, adding: "We are delighted to have Martin Seevers and his team on board as highly experienced experts who are established in the market and can provide comprehensive advice to both companies and private individuals in all areas of corporate and tax criminal law. With the new team in Hamburg, we complement our advisory portfolio perfectly and strengthen our cross-location team across various seniority levels."

Martin Seevers comments: "ADVANT Beiten, with an excellently positioned tax team, a high effectiveness in dispute resolution, corporate criminal law & compliance, as well as a proven track record in legal tech, provides an ideal platform for our tax and corporate criminal law practice. It allows us to not only provide legal advice on comprehensive internal investigations with an international dimension as well as complex compliance matters but also assist our clients with the implementation of necessary compliance measures, from a single source. I am very much looking forward to this new challenge."

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Pörtge has worked at Pinsent Masons before joining ADVANT Beiten as Equity Partner.

Jochen Pörtge advises his clients on issues of criminal compliance and risk and crisis management including corporate defense, particularly on measures to avoid corruption, money laundering prevention and on tax crime matters. He is considered a proven expert in advising on preventive compliance and regularly accompanies internal investigations. He has many years of expertise in the energy, healthcare and financial services sectors. Prior to joining Pinsent Mason in 2018, Jochen Pörtge has worked with the Clifford Chance criminal law team for eight years.

"We are pleased to have gained Jochen Pörtge, a recognised and established expert in the market, for our firm," says Philipp Cotta, Managing Partner of ADVANT Beiten, adding: "The areas Compliance and White Collar Crime are essential components of our full service advisory approach on a national and international level. In Jochen Pörtge, we have found an excellent partner who, with his professional and personal background, is a perfect match for us, and whose expertise will help us expand this area again."

Jochen Pörtge comments: "I am delighted to be able to integrate my key advisory areas corporate defence, criminal compliance and internal investigations strongly into the firm at ADVANT Beiten. Both nationally and internationally, ADVANT Beiten offers an ideal platform to develop existing and new business."

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
Frauke.Reuther@advant-beiten.com

Philipp Cotta
Managing Partner
ADVANT Beiten
+49 (89) 3 50 65 – 1342
Philipp.Cotta@advant-beiten.com

Grave compliance infringements can justify the termination of an employment relationship. When the grounds for termination only come to light during a compliance investigation by an external third party, the employee whose employment has been terminated will also bear the costs of the investigation where there was a specific suspicion of wrongdoing, and the investigatory measures were necessary for his termination.

Facts of the case

The employer and employee brought a dispute before the BAG concerning a claim for damages for the repayment of the costs of an investigation in connection with allegations of expense account misuse and the submission of false claims. The employee was a member of the management board of his former employer (annual gross salary of approximately EUR 450,000.00). After the company received several anonymous tips about alleged compliance infringements, the company decided to launch an investigation to clarify the allegations and mandated a specialist law firm to perform the compliance investigation. The law firm charged approx. EUR 200,000.00 for the report of their investigation. The company terminated the employee’s employment without notice. The employee fought the dismissal in court and lost. As part of a counterclaim, the company claimed the reimbursement of the investigation costs from the employee. At first instance, the employer failed in its claim, however, the Regional Labour Court (LAG) ordered that the former employee pay EUR 66,500.00. According to the LAG, the costs of the investigation were to be borne by the employee at least until the letter of termination was issued. The employee appealed.

The judgment

The BAG denied the claim for damages. Indeed, an employer can claim the reimbursement of costs arising due to the necessary involvement of a law firm when said firm is mandated to look into a specific suspicion of significant wrongdoing and the employee is found guilty of a serious, intentional breach of duty. In the view of the BAG, where there is a specific suspicion of significant misconduct by the employer, the necessary expenses incurred by the injured party to avert impending detriment is part of the damages to be compensated. However, the right to compensation is not without limits: compensation claims are only possible where they relate to measures that a reasonable, commercially-minded person would consider appropriate in the circumstances and either necessary to eliminate the problem or to avoid further damage. In the case in question, the company could not demonstrate that the costs claimed were necessary for the termination of the employment agreement. The claim for reimbursement failed due to the company’s failure to provide sufficient evidence.

Consequences for practice

The BAG remains true to its case law and recognises the possibility, in principle, to claim compensation and agrees with the LAG on the basis for such a claim: the lower Court referred to the judgment of the BAG of 28 October 2010 in Case 8 AZR 547/09 (reimbursement of detective costs) and affirmed the right to claim reimbursement, in principle. In that case, the BAG held that an employee had to reimburse the employer for the costs of a detective who had been engaged by the employer to investigate a breach of duties under the employment contract. The employer in that case had mandated a detective with surveillance of the employee in light of a specific suspicion and the employee was subsequently found to have committed a deliberate breach of his duties.

Practical tip

None of this helped the company in the present case. It simply was not able to show which specific activities were performed or investigations carried out, when they were performed and to what extent they were performed due to a specific suspicion against the former employee. The need for “no stone to remain unturned” and to ensure “every corner of the company is checked” in a compliance investigation by an external third party, is understandable from the point of view of those keen to clean up the issue. However, this tabula rasa approach does not really help when one thinks about the end of the process and later wants to take recourse against the convicted employee. Claims for damages can only be prepared when there is a specific suspicion of serious misconduct and when the necessary investigative measures can be attributed to the facts supporting the termination of employment.

Martin Biebl

What is the EU Whistleblowing Directive?

The Directive determines new compliance duties. Specifically, companies must create opportunities for employees and third parties to anonymously report alleged and actual irregularities (= internal whistleblower system). The idea is that the company's management will thereby become aware of (alleged) irregularities and be able to react. The national legislation must to transpose the Directive. The corresponding draft bill is now available and can be downloaded here (in German): Link.

Who is affected?

The EU Whistleblowing Directive applies to all companies with 50 employees or more and to companies with a turnover of EUR 10m per year or more. Companies in the financial services sector must establish internal whistleblowing systems regardless of the number of employees.

Furthermore, the EU Whistleblowing Directive now provides extensive protection for employees. They can report irregularities both to their own company as well as to external bodies (authorities) without having to fear labour law sanctions. This is especially true if there is no internal whistleblowing system.

Which violations may employees report?

Employees, customers, suppliers and other third parties may ‑ as of today ‑ report violations of EU law (e.g. data protection law), violations of national law (e.g. working time violations) as well as violations of internal policies to the internal or external whistleblowing system.

What do affected companies have to be prepared for?

The legislator has the explicit goal that especially medium-sized companies deal more actively with the topic of compliance and take first measures. In order to enforce these goals and increase the pressure, authorities must now provide their own, so-called external whistleblowing systems.  In this way, authorities are to become aware of wrongdoings within companies. Employees are also allowed to report grievances directly to the public if companies or authorities do not follow up on their tips. All in all, companies must prepare themselves for the wind blowing a little harder from the legislator which will focus in particular on grievances and breaches of rules within the private sector.

Are there new liability risks?

Yes, there are. Compliance violations often lead to personal liability of those involved. Compliance violations may also lead to personal liability of (uninvolved) directors, unless they have taken precautionary measures, such as establishing an internal whistleblowing system. The breach of the new obligation to establish such an internal whistleblowing system further increases the liability risks.

How must reports be handled under data protection law?

The Whistleblowing Directive stipulates that data processing may not violate the General Data Protection Regulation. This does not make it any easier to establish whistleblowing systems in practice. After all, the Whistleblowing Directive protects the individual whistleblower, while the GDPR protects the accused in addition to the whistleblower. This may lead to conflicts.

Do affected companies have to act now and prepare the whistleblowing system?

Companies should apply the necessary judgment. Specifically, it is good advice to talk to an expert about the initial situation in one's own company and to establish one's own internal whistleblowing system with extra time before the new regulations come into force on 17 December 2021, i.e. in the 2nd or 3rd quarter of 2021. Here, the commissioning of an external compliance trust agency which can provide such a whistleblowing system as an external service provider (at low cost), is an option. Then the management would be exempt from liability while the company fulfils the new obligations.

Dr Maximilian Degenhart

Even if application procedures are meant to be uncomplicated from the point of view of the Federal and State Governments, if applications are to be examined only superficially and thus aid is to be paid out quickly, the application requirements must be known and observed precisely (cf. No. 1). Incorrect or incomplete information may not only result in the recovery of the amounts paid out but also entail a considerable risk of criminal liability for subsidy fraud (see No. 2). This applies not only if the misstatements are intentional. For a criminal liability, reckless, i.e. grossly negligent, acts are already sufficient (see No. 2.3)!

1. Basic prerequisites for applying for emergency aid

The details of who can apply for emergency aid vary from one federal state to another. Smaller businesses, freelancers, (solo) self-employed persons and farmers with up to 10 employees who have a German business establishment or management headquarters in Germany and are registered with a German tax office can apply for up to EUR 15,000 from federal funds (see the numerous contributions in the BEITEN BURKHARDT Corona Information Center (LINK) and the publication of the BMWi (LINK). In their emergency aid programmes, the federal states are extending the circle of those eligible to apply in some cases to companies with up to 250 employees, such as Bavaria, and are increasing the subsidies to up to EUR 60,000 in some cases, as in the emergency aid programme in Brandenburg (see the BB Short News of 27 March 2020 LINK).

Both the emergency aid provided by the Federal Government and the State Governments is aimed at securing the economic existence of the companies. The emergency aid is intended to prevent liquidity shortages arising due to corona-related restrictions and ongoing operating expenses.

The applicant must have suffered economic difficulties as a result of the corona pandemic in particular which actually threaten the existence of the company. It is usually not sufficient that the applicant has only suffered a drop in sales that does not threaten its existence. A "liquidity shortage" is thus deemed necessary for the Federal Government's aid "if, as a result of the corona pandemic, the ongoing income from business operations is unlikely to be sufficient to pay the liabilities from ongoing material and financial expenses (e.g. commercial rents, leases, leasing instalments) in the three months following the application" (for Bavaria BayStMiWi LINK. For instance, according to the "Brief Facts on the Corona Emergency Aid Programme of the Federal Government", the applying company must not have been in financial difficulties as early as 31 December 2019 (see BMWi LINK).

In addition to a liquidity shortage, the emergency aid programmes of the federal states also recognise other reasons as threatening their existence. In this respect, it is imperative that the requirements are thoroughly and conscientiously examined when applying for aid, and that the existence of these prerequisites is precisely documented internally in order to avoid unpleasant surprises at a later date.

2. Risk of the accusation of fraud

Particularly in view of the information and assurances required when an application is submitted, there is a not inconsiderable risk of an allegation of fraud if a subsequent review reveals that the prerequisites for emergency aid were not met. False statements at the time of application or improper use of the aid generally fulfil the objective criminal offence of subsidy fraud (see Nos. 2.1 and 2.2). From a subjective point of view, intent is not necessarily required but reckless behaviour is sufficient to make it a criminal offence (see No. 2.3).

2.1 Fraud with regard to facts / application prerequisites

For instance, anyone who provides incorrect or incomplete Information to a subsidy provider about facts relevant to subsidies (section 264 (1) no. 1 German Criminal Code (BGB)) or who, contrary to the legal provisions governing the award of subsidies, fails to disclose such facts (section 264 (1) no. 3 German Criminal Code (StGB)) will be sanctioned for subsidy fraud.

Since the emergency aid is a benefit which, in the case of federal aid from federal funds and in the case of state aid from state funds, is granted to businesses or enterprises without market compensation and serves to promote the economy, it fulfils the definition of a subsidy in section 264 (8) sentence 1 no. 1 StGB.

Pursuant to section 264 (9) StGB, all factual circumstances defined by law or on the basis of a law by the grantor of a subsidy as subsidy-relevant (section 264 (9) no. 1 StGB) or on which the granting, approval, reclaiming, continuation or retention of a subsidy or a subsidy advantage is legally dependent (section 264 (9) no. 2 StGB) are of relevance to subsidies.

But which details in the applications are now relevant to subsidies in this sense? In some cases, the applications leave it at the blanket statement that all information in the application is relevant to subsidies, in others the facts relevant to subsidies are specifically stated. In particular, it should be considered that the assurance about the existence of an economic situation threatening the existence of the company and the liquidity shortage caused by the corona pandemic is a fact relevant to subsidies. However, information on the number of full-time employees, the amount of funding applied for or state aid already received or applied for is also of relevance to subsidies. Every applicant should therefore verify carefully whether it is really in an economic situation that threatens its existence, which was triggered by the corona pandemic, and what amount of subsidy is actually needed to maintain the liquidity of the business.

2.2 Assignment of emergency aid

In addition to deceiving the applicant about the requirements for filing an application, the improper use of emergency aid that has been obtained in principle lawfully can also be punishable. In this respect, under section 264 (1) no. 2 StGB, anyone who uses a monetary benefit whose use is restricted by legal provisions or by the subsidy provider with regard to a subsidy in contravention of the restriction on use is sanctioned.

As a matter of principle, corona emergency aid may only be used to overcome the liquidity shortage and remedy the economic situation that is threatening the company's existence. This means that the subsidy may only be used for current operating expenses (e.g. rent, leasehold, loan and leasing instalments) but not for private living expenses (such as renting a private apartment) (see BMWi LINK). In this context, the restrictions related to emergency aid should also be kept in mind and the benefits received should be used solely within this framework. Particular attention must also be paid, for example, to all decisions relating to distributions to shareholders.

2.3 Intention is not required - gross negligence is sufficient!

The high risk of criminal liability arises above all from the fact that the offence of subsidy fraud does not necessarily require intent but that the offences of the relevant section 264 (1) nos. 1 to 3 StGB can also be committed recklessly (cf. section 264 (5) StGB). Recklessness is an increased form of negligence and is characterised by a particular indifference or gross carelessness. Thus, when applying for emergency aid, particular care must be taken to ensure that the facts from which the prerequisites for the application are derived are carefully examined. While the intentional fulfilment of the criminal offence under section 264 (1) StGB can be sanctioned with imprisonment for up to five years or a fine, the threat of punishment for reckless committal is still imprisonment for up to three years or a fine (section 264 (5) StGB). In addition, there is the personal liability of managing directors or board members (as corporate body (Organ)) towards the company itself.

2.4 Possibility of a withdrawal from the offence with exemption from punishment

As long as the emergency aid applied for has not yet been granted, the applicant acting intentionally or recklessly can avert a criminal liability if it prevents the emergency aid from being granted (section 264 (6) sentence 1 StGB), e.g. by withdrawing the application. If the emergency aid is not granted without the offender's intervention, it will become punishable if it voluntarily and seriously tries to prevent the grant of the subsidy (section 264 (6) sentence 2 StGB).

The time slot given for this is, however, only small due to the rapid disbursement of the emergency aid.

3. Practical advice

Even though the awarding authorities currently only carry out regular plausibility checks, and sometimes even no checks whatsoever on the content, so that aid can be disbursed quickly and unbureaucratically, ex-post checks have already been announced for the future. These refer both to the existence of the prerequisites for application and the appropriate use of the aid (see for instance Saxony-Anhalt LINK). In this context, requests for information may also be made to tax offices and tax authorities (see for instance Hesse LINK).

Companies that want to apply for assistance today should therefore be aware of the situation tomorrow: The competent authorities, including their departments focusing on the areas of sanctions, will closely examine numerous applications in the next few years as part of the "handling" of the crisis situation and will check information for its plausibility. In doing so, these authorities will be able to draw on a substantial pool of experience from previous review situations. Due to generous statutes of limitations, we expect that applications will be reviewed over many years and that the detailed reviews missed at the beginning be "wound up" eventually. In such situations, there is no reason why authorities should not immediately report to the public prosecutor's office any facts which, in their opinion, give rise to initial suspicion of subsidy fraud. For instance, the "Brief Facts on the Federal Corona Emergency Aid Programme" expressly states that applicants must expect criminal prosecution for subsidy fraud if they make false statements intentionally or through gross negligence (see BMWi LINK).

In order to minimise the risks associated with the application and use of emergency aid, both the existence of the prerequisites for emergency aid and its verification and the appropriate use of the funds received should be carefully and comprehensibly documented in the event of a subsequent review and a subsequent charge of criminal liability.

Jörg Bielefeld

Timo Handel

Alexander Schmid

1. The prerequisites for the temporary suspension of the obligation to file for insolvency

Section 1 sentence 1 COVInsAG suspends the obligation to file for insolvency pursuant to section 15a German Insolvency Code (InsO) until 30 September 2020. In addition, the Federal Ministry of Justice and Consumer Protection (BMJV) is authorised to extend the suspension by statutory order until 31 March 2021 at the latest (see section 4 COVInsAG).

Nevertheless, the obligation to file for insolvency during this period is only waived if the insolvency is based on the consequences of the spread of the SARS-CoV-2 virus, i.e. the COVID-19 pandemic, and at the same time there are prospects of eliminating an existing insolvency (section 1 sentence 2 COVInsAG). A legal presumption for the existence of these requirements is stipulated by section 1 sentence 3 COVInsAG in the event that the debtor was not insolvent on 31 December 2019.

Insofar as the reasons for insolvency, in particular an inability to pay, are not based on the COVID-19 pandemic, the obligation to file an insolvency petition and a possible criminal liability in case of a breach of this obligation continue to exist. The same applies if, despite being based on the COVID-19 pandemic, there is no prospect that the insolvency can be eliminated, i.e. it is not merely temporary. In this respect, a prognosis must be made which should urgently be documented in writing because of the criminal consequences. This also applies, of course, to the reason why the (temporary) insolvency is based on the COVID-19 pandemic.

2. No criminal liability for delay in filing for insolvency

If the prerequisites for the temporary suspension of the obligation to file an insolvency petition are fulfilled, a criminal liability for failure to file an insolvency petition (section 15a (4) and (5) InsO) ceases to exist during this period. It is precisely the person who violates his duty to file an insolvency petition who is punishable. However, this duty is temporarily suspended so that it cannot be violated.

It should be kept in mind, though, that after the suspension period has expired, the obligation to file an application is revived. If by then a reason for insolvency due to the COVID-19 pandemic has not been eliminated, an application for insolvency must be filed. Since section 1 sentence 1 COVInsAG only suspends the obligation to file an application, it is obvious that an application for insolvency must be filed immediately after expiry of the suspension period if the reason for insolvency has already existed for three weeks by then (see section 15a (1) sentence 1 InsO). In this respect, the time limits and the continued existence of the reason for insolvency must be continuously monitored and assessed, at any rate at the end of the suspension period, and any necessary steps must be taken to counteract the risk of criminal liability for delay in filing for insolvency.

3. No "get out of jail free" card

Even if the temporary suspension of the obligation to file for insolvency already takes away great pressure and a risk of criminal liability which should not be underestimated, this does not eliminate all risks of criminal liability. The provisions of the COVInsAG do not constitute a "get out of jail free" card. In addition to the risk of criminal liability for delay in filing for insolvency, a company in crisis is exposed to a large number of other criminal liability risks for the persons involved, in particular the managing directors and executive board members. But they are not suspended by COVInsAG.

3.1 Non-payment of social security contributions (section 266 German Criminal Code (StGB)

In the event of insolvency, it regularly happens that the business operator no longer pays the social security contributions for its employees or does not pay them on time. In this case there is a considerable risk of criminal liability according to section 266a StGB which is not suspended by the COVInsAG. Rather, the obligation to pay social security contributions in good time continues to apply regardless of the suspension of the obligation to file for insolvency. Although it is basically possible to apply for a contribution deferral, the National Association of Statutory Health Insurance Funds (GKV-Spitzenverband) has stated that such a deferral should only be granted "when all other measures from the various aid packages and support measures of the Federal Government have been exhausted". (see GKV-Spitzenverband, Press Release of 25 März 2020). Although the Federal Court of Justice (FCJ) assumes that criminal liability pursuant to section 266a StGB is excluded for the duration of the insolvency application period (see FCJ, decision of 30 July 2003 - 5 StR 221/03, NStZ 2004, 283), whether this results in a further suspension of criminal liability pursuant to section 266a StGB on account of section 1 COVInsAG is, however, questionable and not certain, even if the meaning and purpose of section 1 COVInsAG speak in favour of this. It is therefore urgently recommended that in the case of temporary insolvency, the business operator contacts the collection agency, works towards an extension of the deadline and explains to the agency why it is not possible to pay on time, although it has made a serious effort to do so, stating the amount of the contributions to be paid (see section 261 (6) sentence 1 StGB). This should be thoroughly documented by the business Operator.

3.2 Commitment of fraud* in the conclusion of new transactions (section 263 StGB) *(Eingehungsbetrug ‑ entering into an agreement with the intention to deceive the other party)

There is also a particular risk with regard this respective type of fraud, the so-called "Eingehungsbetrug" (section 263 StGB). The temporary suspension of the obligation to file for insolvency is intended precisely to help the companies concerned to continue their business activities (BT Printed Matter 19/18110, p. 3). If, however, new business is conducted in a state of insolvency, in particular business where the insolvent does not have to pay in advance with regard to his payment obligation, there is a risk of fraud (section 263 StGB) if he does not inform his contractual partner of this fact. The case law of the FCJ assumes in principle "that the suppliers would no longer have delivered the ordered goods if they had been aware that they would no longer receive payment for them" (FCJ, judgement of 11 December 1997 - 4 StR 323/97, BeckRS 1997, 30004704). Hence, also in this respect attention must be paid to a careful documentation of the forecast for the expected recovery of solvency as a result of the use of aid packages and the expected recovery of the profitability of the business activity of the company, whereby solvency must be recovered before the maturity of the contractual partner's claim.

3.3. Further risks

Despite the suspension of the obligation to file for insolvency, the bankruptcy offences (sections 283 et seq. StGB) are still of relevance which, among other things, concern the removal of assets (section 283 (1) no. 1 StGB). But also risks from a violation of the book-keeping duties (section 283b StGB), fraudulent preference of creditors (section 283c StGB) and fraudulent preference of debtors (section 283d StGB) must be kept in focus. In particular, it must be carefully reviewed whether the consequences of the suspension of the obligation to file an insolvency petition, as provided for in section 2 COVInsAG, may permit certain actions.

4. Conclusion

The temporary suspension of the obligation to file for insolvency has brought relief to many companies whose sales collapsed overnight as a result of the corona pandemic. Even if this eliminates criminal liability for delaying the filing of insolvency, those affected must not feel safe as a large number of criminal law risks remain. For this reason, even in the event of only temporary insolvency as a result of the corona crisis, all business activities must be subjected to critical analysis and review. This applies in particular to the conclusion of new transactions. If a notification of temporary insolvency is not sent to the business partners, it must be ensured that at least the expected resumption of solvency at the time of the maturity of the claim is documented in a valid and comprehensible manner.

In view of the prerequisites for suspending the obligation to file for insolvency (section 1 COVInsAG), it is also advisable to carefully review and document in writing the circumstances leading to the existence of the prerequisites in order to avoid unpleasant surprises later on. With regard to the suspension of the obligation to file for insolvency expiring on 30 September 2020 and, in the event of an extension, no later than 31 March 2021, the deadlines for a possible revival of the obligation to file for insolvency must also be closely monitored.

Jörg Bielefeld

Timo Handel

Alexander Schmid