Bribery Act - Germany Gets Ready For Stricter Criminal Laws

Author:Mr Wolfgang Rehmann and Diana Heimhalt
Profession:Taylor Wessing
 
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In its cabinet session on 21 January 2015, the German government adopted the draft bill on combating corruption1 of the Ministry of Justice and Consumer Protection. The bill is intended to reform the German Criminal Code in order to accommodate the mandatory requirements imposed by the European Council and the United Nations Convention Against Corruption of 31 October 2003. Preventing and combating corruption in all its forms is regarded as one of the state's central tasks by the German government, including the effective fighting of cross-border corruption. The government is also working on a draft bill on active and passive corruption in the healthcare sector.

Draft bill on combating corruption

The new bill tightens the penalties on passive and active corruption in business transactions, now a criminal offence. Corruption in business transactions means that an employee or agent of a commercial undertaking is bribed, by contrast to the bribing of public officials which is an offence as well. Under the current law, bribing an employee or agent of a company is only a criminal offence if it is done in order to buy an undue advantage in competition; by way of example, the purchasing manager in a company is paid bribe money by a supplier and in return awards the contract to the supplier rather than a less expensive competitor. If there is no distortion of competition, corruption is currently not a criminal offence.

Based on the EU Council Framework Decision2, however, corruption that does not involve a distortion of competition but a breach of duty in relation to the employer shall also be an offence. The new, extended Sec. 299 StGB (German Criminal Code) also covers cases where bribe money buys a breach of duty by an employee or agent of a company outside of any competition context. These are duties that the employees or agents owe to the business proprietor, which may in particular be grounded in law or in contract. Merely accepting the advantage or merely withholding the fact of the benefit from the employer, in other words a breach of the company's compliance policies, is not sufficient to constitute such a breach of duty. The advantage rather has to manifest itself in some sort of return service for the breach of duty committed in the briber's interest, involving the receipt of goods or services. Breaches of duty that only cause internal disruptions are not an offence by this definition, as they are not duties involving the receipt of goods or services. The bill explains the reasoning behind the amendment of Sec. 299 StGB as follows: Sec. 299 serves not only to protect the functioning of competition but also to safeguard the employer's interests where the exchange of goods is concerned. The amendment more strongly protects the employer's interest in the loyal and uninfluenced discharge of duties by his employees and agents relating to the exchange of goods and services. An "advantage" per the legal definition exists where the receiver has no legal claim to receive the benefit.

Corruption in the healthcare sector

Ever since a 2012 decision of the Enlarged Criminal Panel of the Federal Court of Justice (to be discussed below), the political parties in Germany largely agree that corruption in the healthcare sector should be combated more seriously by means of a legislative reform. So far, opinion was divided on how and especially in which act of legislation the amendment should be crafted. On 15 January 2015 the state of Bavaria submitted a bill for an act combating corruption in the healthcare sector.3

Background

The Enlarged Criminal Panel of the Federal Court of Justice decided in March 20124 that for purposes of SHI doctor services, physicians in their own practice - as opposed to physicians working in public hospitals - are neither public officials nor agents of the health insurance funds within the meaning of Sec. 299 StGB. In the case decided by the FCoJ, a drug representative working for a pharmaceutical enterprise was practicing a bonus system under the name "prescription management" for doctors who prescribed the drugs she was selling. The physician was to receive 5% of the manufacturer's price as a reward for prescribing drugs made by her employer. The payments were documented as fees for fictitious scientific lectures. Based on this bonus system the accused handed out cheques to different SHI doctors in 16 cases, for a total sum of EUR 18,000. The lower court had convicted the accused of corruption in business transactions. The FCoJ overturned the judgment.

Under the old law (which is currently still in force), the giving of benefits to doctors working in their own practice to encourage them to prescribe specific drugs or drugs from a particular pharmaceutical company was and is not a criminal offence in Germany, be it under Sec. 299 StGB or as an offence committed in public office under Sec. 331 ff. StGB (active and passive corruption in public office).

Earlier bills

In the previous legislative period, the Hamburg senate introduced a draft bill for a new offence "passive and active corruption in the healthcare sector", to be added to the Criminal Code as new Sec. 299a, to the German...

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