The judgment of the German Federal Court of Justice (BGH) of 17 July 2009 – 5 StR 394/08 concerns the limits of criminal liability where a head of legal affairs and internal audit learns of unlawful conduct within a company but fails to report it.
Facts and the defendant’s position
Berliner Stadtreinigungsbetriebe (BSR) made an error when calculating street-cleaning charges for 1999/2000. Certain expenses that should have been borne by the State of Berlin were passed on to property owners. Although the error was identified while the 2001/2002 tariff was being prepared, the responsible manager G. required the unlawful calculation method to be continued. Property owners were consequently charged approximately EUR 23 million too much.
The defendant W. headed BSR’s legal department and was also responsible for internal audit. Although he was not a member of the new tariff working group, he learned both of the earlier calculation error and of G.’s intention to continue it deliberately. Nevertheless, he neither informed the chair of the management board, to whom he reported directly, nor disclosed the illegality at the supervisory-board meeting at which the tariff was discussed.
The BGH’s reasoning
The BGH did not derive W.’s duty to act solely from his involvement in the earlier erroneous calculation. The new tariff was calculated independently, so the previous error did not automatically continue into the new period. The renewed illegality resulted from G.’s fresh and deliberate decision.
The Court nevertheless found that W. occupied a guarantor position within the meaning of section 13 of the German Criminal Code because of the responsibilities he had assumed. His duties included reporting legal violations identified in the tariff calculation. Under his employment responsibilities, W. was required to inform the chair of the management board as his immediate superior.
The judgment therefore distinguishes decision-making authority from a duty to inform. W. had no power to change the tariff or stop its implementation on his own. He did, however, know of the illegality and was able to notify the competent corporate body, thereby contributing to the prevention of the offence. His failure to discharge that duty resulted in liability for aiding fraud by omission.
The BGH also observed that compliance officers may, depending on their assigned sphere of responsibility, be guarantors responsible for preventing offences committed from within the company. The judgment does not establish blanket criminal liability for every offence committed in an organisation. The decisive factors remain the officer’s specific remit, knowledge of the wrongdoing, ability to report or intervene, and the connection between the omission and the offence.
For corporate compliance structures, the judgment demonstrates the importance of distinguishing knowledge, reporting duties and decision-making authority. The inquiry cannot stop at identifying who made the unlawful decision; it must also determine who knew of the illegality and, by virtue of their function, to whom they were required to report it.
Comparative note on Turkish law
The Turkish Criminal Code contains no general equivalence clause corresponding to section 13 of the German Criminal Code. Nor does the offence of fraud expressly regulate commission by omission. Nevertheless, the prevailing academic view and the case law of the Turkish Court of Cassation accept that silence or failure to correct an existing mistake may, under certain conditions, amount to deception. The doctrinal basis is not a general guarantor provision but the interpretation of the element of deception: misleading silence can be included where the defendant is under a legal duty to disclose the truth.
In its decision of 31 October 2022, no. 17150/18087, the 11th Criminal Chamber of the Turkish Court of Cassation stated that fraudulent conduct may be committed actively or by exploiting a victim’s mistake or incorrect understanding. An omission can constitute deception only where the defendant has a duty to inform the mistaken victim. Such a duty may arise in particular from an existing legal relationship between the parties.
The principal difference therefore lies in the doctrinal construction. German law determines the duty to prevent the prohibited result through section 13 and bases accessorial liability on that guarantor position. Turkish law reaches a comparable outcome through interpretation of the deception element of fraud. In both systems, mere knowledge is insufficient: there must be a specific duty to inform, a genuine opportunity to comply with that duty, and a connection between the deception and the pecuniary loss.
Decisions
BGH, Judgment of 17 July 2009 – 5 StR 394/08 (full text, HRRS)
Turkish Court of Cassation, 11th Criminal Chamber, 31 October 2022, 17150/18087 (decision search)