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German American Law: German Parliament Passes Corruption Statute

German Parliament Passes Corruption Statute
by Alexandra Kastner, Washington DC, Stuttgart*

Germany has been one of the European countries accused of tolerating corruption by business and even encouraging corruption by allowing the deductibility of bribes from taxable income. On June 26, 1997 the German Bundestag passed changes to the Penal Code (Strafgesetzbuch) in order to combat corruption. These changes take the sting out of the most serious accusations against German corruption policies. They include:

(1) Aggravated bribery of government officials
would lead to imprisonment of a maximum of ten years and
in the case of judicial officers of a maximum of fifteen
years. Corrupt activities in the civil sector would be
punishable with up to five years of imprisonment.

(2) Activities to induce the provision of governmental
services would be punishable. Unlike its predecessor,
the new law no longer requires proof of an advantage
procured through the bribe.

(3) The law redefines and expands the term officials
and also addresses the issue of benefits provided an
official by a third party. In addition, the law
authorizes penalties that remove any economic advantage
gained through corruption.

(4) The act adds a new criminal part called "Criminal
Offenses against Competition" (Straftaten gegen
den Wettbewerb)
to the Penal Code that address
conspiracies by bidders in procurement proceedings.

The statute complements the German Government's May 26, 1997 ratification of the European Union convention on corruption. While the new law focuses on corruption within Germany and relative to German government agencies and courts, a separate Bundestag resolution of June 26, 1997 states that corruption is punishable also with respect to officials of the European Union, the Organization for Economic Development and the European Council. As part of the reform package, German tax law will no longer permit the deduction of bribes.**


* The author is a German law graduate and was in the summer of 1997 an intern with Berliner, Corcoran & Rowe, LLP in Washington, DC, as part of her professional training as a Rechtsreferendar.
** "Bundestag verabschiedet Gesetz zur Korruptionsbekämpfung," 32 Recht 1 (June 27, 1997).
August 7, 1997

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