Corruption as business practice? Criminal responsibility of enterprises in the European Union
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Corruption as business practice? Criminal responsibility of enterprises in the European Union Wolfgang Hetzer
Published online: 10 October 2008 © ERA 2008
Abstract Using the recent Siemens case and the particularities of the German system as the starting point, this paper demonstrates how serious, useful and urgent the debate on the punishment of companies has become in the prosecution of corporate crime. The article looks beyond the existing legal situation and, looks at the policy initiatives on this field, and proposes some strategies to combat corporate crime and its different forms in the EU. Keywords Corporate liability · corporate criminal law · corruption 1. Introduction Not long ago serious charges were brought against a number of Siemens employees. It is suspected that for years they had been diverting large sums of money into slush funds.1 The money is thought to have been used to bribe potential customers. Several members of staff, some in senior positions, were arrested. The fallout from these suspicions extends far beyond this particular case. The details that have arrived in the public domain so far suggest the existence of major problems. It is apparently not only German industry which is beset by them. Abroad, corruption still seems to be viewed either as a peccadillo or necessary evil. Major corporations involved in largeDr. Wolfgang Hetzer () European Anti-Fraud Office (OLAF), Rue Joseph II 30, 1049 Brussels, Belgium e-mail: [email protected] This is an updated version of the presentation given by the author at the ERA conference on Combating corruption and fraud in the EU, held in Trier on 10–11 April 2008. 1) At the time of writing the press were talking about a (provisional?) figure of € 420 million (Süddeutsche Zeitung, edition No. 287 of 13. 12. 2006, p. 1). Meanwhile (November 2007) figures go beyond 1,3 billion Euros.
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scale projects, such as power stations, dams or airports are particularly susceptible. This is alarming for a number of reasons. While some companies operating all over the world may find that greasing palms makes it easier for them to do business, these backhanders have devastating consequences for economies in Africa, Asia, Eastern Europe and Latin America. Bribery and baksheesh make any attempts to escape poverty appear hopeless. Corruption encourages organised crime, undermines democracy and prevents economic growth. In African countries it is said to have led to capital flight on a massive scale. According to the United Nations, the cost of investment in corrupt states is 20 % higher. The enormous sums involved (several million euro each year) suggest that corruption may even be systematic. The events at Siemens show how high the price of contracts is, if the line between right and wrong is blurred even in the upper echelons of a company. At the beginning of December 2006, shortly after the prosecution service’s investigations became public, Siemens reported that the company was expecting a tax increase of €168 million for the
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