Germany Raises Corporate Fine Caps And Formalises Corporate Assessment Criteria

On 29 April 2026, the German Cabinet adopted a draft bill implementing Directive (EU) 2024/1203 on the protection of the environment through criminal law (the Environmental Crimes Directive). Whilst transposing the Directive is the primary legislative purpose, the bill also introduces two broader reforms to Germany's corporate penalty framework under section 30 of the Administrative Offences Act (Ordnungswidrigkeitengesetz, OWiG) that are of wider significance for companies operating in Germany.

Quadrupling of corporate fine caps

The bill proposes to amend section 30(2) OWiG to increase the maximum corporate fine from €10 million to €40 million for intentional criminal offences, and from €5 million to €20 million for negligent offences. Notably, the higher caps are not limited to environmental crime – they would apply to all offences for which a corporate fine can be imposed under section 30(1) OWiG, including fraud, corruption, sanctions violations and money laundering.

The practical impact of the increased cap can only be assessed in the context of Germany’s corporate penalty regime as a whole. That regime has always comprised two structurally distinct elements: a punitive component (Bußgeld), which is subject to the statutory cap now being raised; and a disgorgement/skimming-off-profits component (Vermögensabschöpfung), which is and remains uncapped. In practice, it is the disgorgement element that tends to dominate in large cases, allowing authorities to reach very significant total penalty levels. This was illustrated for example by the Volkswagen Diesel case (2018), in which the total corporate penalty reached €1 billion – comprising a €5 million fine (then the maximum for negligent behaviour) and €995 million in disgorgement. The reform to the fine cap leaves this dynamic unchanged.

The practical significance of the reform will vary considerably depending on the scale of the case. In major cases where disgorgement is the dominant component, the higher cap is unlikely to have significant impact. By contrast, in small and medium-sized cases, where the punitive component plays a more central role, the effects are likely to be more substantial. In these cases, the increased cap may raise prosecutorial and regulatory expectations as to appropriate fine levels, resulting in a more acute impact on affected parties. This asymmetry should be taken into account by companies and their advisers when assessing exposure and preparing defence strategies.

The bill addresses a structural inconsistency in existing German law whereby corporate fines for administrative (non-criminal) offences in certain sectors could already exceed those available for serious criminal conduct. The new caps seek to correct that imbalance.

The proposed increase also reflects a broader EU legislative shift towards higher and harmonised corporate fine thresholds. Across a growing number of instruments, the EU legislature has converged on a common benchmark of at least €40 million or 5% of worldwide annual turnover for the most serious offences – a figure that appears in the Environmental Crimes Directive (on which the present bill is primarily based), the Directive on criminal offences and penalties for the violation of Union restrictive measures (Directive 2024/1226) and the Anti-Corruption Directive adopted on 29 April 2026 (Directive 2026/1021) alike, with Member States free to choose between the two methods. The convergence on the same benchmark across all these instruments is striking and points to a deliberate and consistent policy choice at EU level.

Formalised criteria for corporate fine assessment

Arguably the more significant reform from a corporate compliance perspective is the proposed introduction of a statutory framework for calculating corporate fines in a new section 30(2a) OWiG.

Under the current law, no general statutory rules govern how corporate fines are assessed, with the matter left to prosecutorial discretion and case law. The German Federal Court of Justice held (judgment of 9 May 2017, 1 StR 265/16) that compliance measures must be taken into account when assessing a fine, but the precise mitigating or aggravating weight of compliance systems remained unclear and was applied inconsistently.

The new provision would require that fines be assessed on the basis of three factors: the significance of the offence; the reproach attributable to the company; and the company's economic circumstances. A non-exhaustive list of circumstances to be taken into account in the overall balancing exercise includes:

• the seriousness, extent, duration and manner of execution of the offence and its effects;
• efforts by the company to uncover the wrongdoing and repair the damage caused;
• compliance measures taken before or after the offence; and
• the company's size and profitability.

The codification of compliance and cooperation as explicit mitigating factors is a meaningful – and, from the companies' perspective, a welcome – development: companies will, for the first time, have a degree of legal certainty and be able to point to a statutory basis for the proposition that genuine compliance investment and cooperation with authorities should reduce their penalty exposure. In this respect, the German reform is consistent with the broader EU legislative trend. Most notably, Article 16 of the Anti-Corruption Directive (2026/1021) expressly recognises effective compliance programmes and voluntary disclosure as mitigating circumstances for legal persons. The Sanctions Violations Directive (2024/1226) and the Environmental Crime Directive (2024/1203) similarly incorporate cooperation with authorities as a mitigating factor across EU criminal law.

This brings Germany closer to the corporate cooperation frameworks familiar from the US and the UK. That said, unlike those regimes, the new provision does not establish a numeric baseline or structured discount mechanism, which means that quantifying the benefits of cooperation will remain challenging in practice, and that a company’s decision on whether to cooperate will continue to require careful consideration on a case-by-case basis.

Next steps

The bill has now been forwarded to the Bundesrat (representing the 16 German states) and will then proceed to the federal parliament (Bundestag). Germany will accordingly not meet the EU transposition deadline of 21 May 2026. However, given that the European Commission may initiate infringement proceedings and ultimately impose financial penalties on Member States that fail to transpose an EU Directive in time, the domestic legislative process can be expected to move swiftly. We will continue to monitor developments.

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