German corporate fines reform: internal investigations and compliance frameworks as key mitigating factors

The reforms also propose to markedly increase financial exposure for companies related to wrongdoing by persons in leading positions. The maximum corporate fine would rise to EUR 40 million where the underlying offence is an intentional criminal offence.

The draft was introduced in May 2026 as part of a legislative package implementing Directive (EU) 2024/1203 on environmental crime. However, the proposed amendments to Section 30 OWiG go beyond the requirements of the Directive and would apply to corporate fines irrespective of the underlying offence.

What is changing?

The most visible change is the proposed increase in maximum fines under the German OWiG. Where the underlying offence is an intentional criminal offence, the current maximum of EUR 10 million would rise to EUR 40 million; where the underlying offence is a negligent criminal offence, the maximum would be EUR 20 million. However, under German law, a corporate fine comprises a punitive component and a disgorgement component. The statutory caps only apply to the punitive component. Thus, the overall fine may exceed the statutory maximum where necessary to disgorge the economic benefit derived from the offence.

The change to Section 30 OWiG is significant since it is the main provision for corporate fines as Germany does not recognize corporate criminal liability.

New sentencing criteria

The draft bill also, for the first time, introduces sentencing criteria. This was commonly viewed as a shortcoming under the current regime as much discretion was left to authorities and courts. This sometimes led to very different outcomes across authorities and courts. The draft bill now intends to achieve more legal certainty by introducing binding sentencing criteria.

Key factors for determining the fine in individual cases include the significance of the offence, the allegation towards the entity, and the economic circumstances of the entity. When determining the fine, circumstances that speak in favour of and against the entity have to be weighed. For this, the draft bill contains a non-exhaustive catalogue of seven such circumstances as examples including extent, duration and implications of the act but also motive of the actor and previous offences.

Furthermore, the draft bill explicitly recognizes as mitigating factors the company's own efforts to uncover the offence and mitigate the damage. Most notably, the draft bill requires genuine efforts in this respect but does not go into further detail about what genuine efforts are. Companies are hence well advised to make sure their investigation is run by experienced individuals and with proper governance so that there can be no discussion about the genuineness of their efforts when it comes to potential fines. This is especially important since there are examples in the German market where the independence and impartiality of internal investigations have been questioned by authorities, with investigations criticized as one-sided and ultimately disregarded. The proper setup and implementation of the investigation will become even more important under the new sentencing guidelines. Engaging external counsel may help demonstrate the independence and quality of the company’s investigative efforts.

Finally, the draft bill recognizes as mitigating factors further measures to prevent and detect misconduct. With respect to such pre- and post-offence measures, companies’ compliance frameworks – including monitoring systems, whistleblowing channels, and investigative processes – may be considered, provided they are effectively implemented in practice.

Conclusion

The proposed reform of Section 30 OWiG marks a significant shift in German corporate sanctions law that will likely have a major impact on internal investigations in Germany including subsequent remediation measures and also strict compliance frameworks. In line with international enforcement trends, the fourfold increase in maximum fines, combined with a statutory sentencing framework, creates clear incentives to invest in effective compliance frameworks and professional internal investigations.

Companies should review and, where necessary, enhance their compliance frameworks and ensure robust and well-documented internal investigations in case of potential misconduct.

Ensuring that corporate compliance programs keep up with evolving rules on corporate criminal liability was one of eight key challenges identified for 2026 in the A&O Shearman Cross-border White Collar Crime and Investigations Review 2026.