A first look at the coalition agreement from a compliance perspective

Particularly noteworthy compliance-related issues are the criminal sanction law and the implementation of the EU Whistleblower Directive. 

Changes expected in corporate sanctions and compliance obligations

According to the coalition agreement, "honest companies" are to be protected from unlawful competitors.

Therefore, the rules on corporate sanctions, including the level of sanctions, shall be revised to improve legal certainty for companies regarding compliance obligations and to create a precise legal framework for internal investigations.

This suggests that the changes in corporate sanctioning and compliance obligations could become comprehensive and quite profound.  

It is to be expected that a specific legal basis will be created for corporate sanctions. The abstract objective of improving legal certainty for companies with regard to their compliance obligations and the creation of a precise legal framework for internal investigations are very much to be welcomed. It remains to be seen how this will be implemented in detail. 

In the former grand coalition, a corresponding legislative process had failed due to differences between the coalition partners after the former German Government had introduced the draft of an Association Sanctions Act in the German Parliament in the fall of 2020.

Implementation of EU Whistleblower Directive to be addressed

The EU Whistleblower Directive, which entered into force on 16 December 2019, sets out common standards for protecting whistleblowers. Member states have until 17 December 2021 to implement the directive into national law. Germany will struggle to meet this deadline. 

The coalition agreement calls for the EU Whistleblower Directive to be implemented in a way that is both legally robust and practicable. The aim is not only to protect whistleblowers from legal retaliation when they report breaches of EU law, but also when reporting other significant misconduct where there is substantial public interest in exposing it. Claims against the injuring party will also be made easier to enforce. For this purpose, consulting and financial support offers are to be examined.

It is thus likely that the implementation legislation will go significantly beyond the minimum requirements of the EU Directive, as did the failed Draft Whistleblower Protection Act (HinSchG) laid before the German Parliament by the former grand coalition. 

Keep an eye on your compliance management systems

While the road from the coalition agreement to corresponding laws actually coming into force is long and unpredictable, companies are well advised to continuously review and improve their internal compliance management systems to be prepared for the future. 

From a compliance law perspective, it will remain interesting times.  

Our blog series on the impact of the coalition agreement provides in-depth information on a range of issues that will confront us over the next four years.