Category Archives: Compliance

Association Fines Code – the latest legislative endeavor to promote compliance

VerbStrG or Association Fines Code is the title of the latest legislative endeavor to promote compliance in Germany. The North Rhine-Westphalia state government drove it forth, presented it at the fall Ministerial Conference for Justice on 11/14/2013, and soon the draft will be introduced to the Federal Council of Germany. “Associations”, i.e. any type of organization, as well as societies, would be made culpable. Administrative fines (up to 10 % of the revenue), exclusion from grants, exclusion from public contracts, publication of the fine (“pillory”), even “capital punishment” (dissolving the entity) can be imposed. But not if the company took preventive measures (which then simply didn’t work out perfectly): In these cases the court may reduce the fine or even refrain from imposing a penalty. According to the reasoning for the draft, the law is intended to create “incentives” so medium-sized companies will also adopt a compliance system. The first detailed article in professional journals on this topic is by Prof. Dr. Volker Roemermann and can be read in issue 1 of the GmbH-Rundschau 2014 (GmbHR 2014, Pg. 1).