Max Planck Institute for Foreign and International Criminal Law

State regulation of corporations is traditionally carried out in the form of economic pressures applied by means of private law and commercial administrative law. In recent decades, however, public sanctioning law has enjoyed increasing popularity as a means of combating the "social evils" caused by corporations. Comprehensive sanctioning of corporations is the subject of persistent demands in the public and jurisprudential spheres as a result of the numerous recent economic scandals (at corporations such as Enron in the USA and Siemens in Germany). In addition to sanctioning, there has been a recent trend towards attempting to prevent violations of the law before they are committed. In light of the state’s limited options and resources, the possibility of co-opting corporations has taken center stage in the debate on state-private co-regulation. Compliance programs, which include internal corporate guidelines and structures designed to prevent and detect crime, represent an essential element of the corporate side of these kinds of measures.

The specific subject of this research project is the current development in the area of white collar crime and the law of non-criminal regulatory offenses in Germany and the USA with respect to the legal requirements of corporate criminal responsibility, the types of possible sanctions, and the corresponding significance of compliance measures. The available research to date takes only isolated aspects of compliance measures and of corporate sanctioning into account. An isolated analysis of individual elements, however, frequently yields a distorted picture, because, for example, sentencing regulations in the USA often serve to correct weaknesses in substantive law.

The goal of this project is to develop a concept of state-private regulation in a comprehensive system of corporate responsibility, including sanctions and corporate compliance measures. The project will prepare a legal policy recommendation in which compliance measures will be legislated as part of a reform of the German law of corporate sanctioning. The law of corporate sanctioning in Germany and in the USA as well as the significance of compliance measures in the two systems are studied as preliminary issues.

Methodologically, the study follows a traditional comparative legal approach. The USA provides a good comparison to Germany, first, because of its long experience with the criminal sanctioning of corporations, and second, because of its already far-reaching implementation of compliance measures in numerous areas of the law. In the first section, German and American legislation, literature, case law, and empirical data will be studied. These sources will be analyzed and presented with regard to substantive, sanctioning, and procedural regulations. The comparative law section, which follows the two country reports, subjects the national regulations to a comparative analysis with respect to similarities and differences. Finally, based on the results of the legal comparison, the third section will develop a reform proposal.

The results to date show that in the USA criminal punishment has become a central element in state regulation of corporate behavior. In the aftermath of the introduction in 1991 of the compliance approach as part of the sentencing guidelines, the approach has gained great influence on legislation and the practice of law. Today, the importance of compliance programs far exceeds the goals originally pursued in the area of sentencing. Via the active inclusion of corporations, the approach proves to be an effective method of creating corporate structures that deter the commission of crime and facilitate their detection.

This project is a doctoral dissertation supervised by Prof. Dr. Ulrich Sieber, University of Freiburg.