Navigating a tax fraud (Steuerermittlung) or other white-collar criminal investigation (Wirtschaftsstrafverfahren) in Germany is a daunting experience even for a German citizen, let alone for foreign executives. The German legal system operates under an inquisitorial civil law framework that differs significantly from US or UK common law jurisdictions. Whether your company just experienced a dawn raid by German customs (Zoll), by a German tax investigation unit (Steuerfahndung) or the German criminal police, is faced with a freeze on corporate accounts, or received a formal notice from the German public prosecutor (Staatsanwaltschaft), understanding the distinct features of German criminal procedure is vital to building an effective defense strategy from day one. Here is what non-German defendants and their foreign legal counsel need to know when facing white-collar allegations in Germany.
There Is No Corporate Criminal Liability in Germany
Unlike the United States or the United Kingdom, German criminal law strictly adheres to the principle that only natural persons—such as managing directors, board members, or executive employees—can commit crimes. A corporation cannot be criminally indicted.
However, this does not mean corporations escape scatheless. Under Section 30 of the Act on Regulatory Offenses (OWiG), authorities can impose administrative fines of up to ten million Euros on a company if an executive commits a crime that violates corporate duties or enriches the business. Furthermore, court-ordered asset recovery (Vermögensabschöpfung) and pre-trial asset freezes (Vermögensarrest) can paralyze a company’s local operations by seizing bank accounts and corporate assets directly.
German Dawn Raids and In-Country Inquiries
A corporate dawn raid (Durchsuchung) by German prosecutors and tax investigators (Steuerfahndung) is often the first time a foreign client learns of an investigation. During a raid, German authorities frequently attempt to interview employees on the spot.
In Germany, employees are regularly questioned as witnesses rather than targets. This is a strategic pivot point: under German law, individuals have a robust right to silence if their answers might incriminate themselves, and anyone targeted as an accused (Beschuldigter) has an absolute right to remain silent and consult a defense lawyer before making statements. Foreign clients must be strictly advised not to submit informal explanations or hand over extra documentation immediately, as uncoordinated early statements can rarely be corrected later.
Cross-Border Complications: Interpol and Asset Forfeiture
White-collar investigations in Germany rarely stop at national borders. German prosecutors actively coordinate with international authorities, utilizing European Arrest Warrants, Interpol Red Notices, and cross-border asset seizures. If an executive is flagged by an international alert, they face immediate detention risks upon crossing international borders or arriving at European airports. Defending against these measures requires deep expertise in both German criminal procedure and international extradition law.
The Crucial Role of Independent German Defense Counsel
Because German white-collar cases often trigger concurrent liabilities—including tax penalties, asset forfeiture, labor law consequences, and personal director liability—defense strategies cannot be handled in a silo.
Furthermore, under the German Code of Criminal Procedure (Strafprozessordnung, StPO), full access to the official investigative file (Akteneinsicht) is exclusively granted to locally admitted defense counsel. Foreign co-counsel cannot obtain these files directly. To protect a client’s global interests, US and UK attorneys must partner with local German defense counsel immediately to secure the case files, evaluate the evidentiary threshold, and coordinate an interdisciplinary defense that spans criminal, corporate, and tax law.
Strategy and Initial Steps
If you or your client are facing scrutiny from German authorities, time is of the essence. Do not respond to inquiries, do not talk to police or prosecutors (in fact, don’t talk to anybody at all about the matter), and also do not attempt any compliance cleanups before having obtained legal advice from a German defense lawyer (Strafverteidiger).
German defense lawyers at SE Legal deal with all areas of German criminal law. Their main expertise is white collar crime (i.e. business, corporate, compliance, tax), but they also represent clients with regards to narcotics law cases and illegal immigration. They are versant in the law of international extradition proceedings.
If you require advice or legal representation in a Germany related case, please call +49 941 463 7070 in order to contact German lawyer Bernhard Schmeilzl, LL.M. (Leicester), Of Counsel International Affairs with SE Legal.
