Foreign trade criminal law
Customs Criminal Law
Self-disclosures
AWV - Messages
Foreign trade criminal law & customs criminal law
Foreign trade criminal law and customs criminal law are parts of commercial criminal law to which schirach.law devotes particular attention. Customs law and foreign trade law play a decisive role in a globalized economy. Violations of customs and foreign trade regulations have serious consequences in terms of fines and criminal law. In this respect, foreign trade criminal law and customs criminal law are of central importance for companies and private individuals who are involved in international trade or import and export personal goods. Due to its intensive involvement in these areas of law, schirach.law has built up a high level of practical expertise and can advise quickly and effectively.
Importance of foreign trade law and foreign trade criminal law
Foreign trade law regulates a country's economic trade with other countries, taking particular account of its own security, foreign, economic and trade policy interests. In order to protect these interests effectively, state intervention is necessary, which restricts free economic trade to the extent required. As the global political situation is constantly changing and therefore foreign trade policy must also be continuously adapted, foreign trade law is also subject to frequent changes.
Private individuals and companies are therefore often faced with complex legal challenges in the area of foreign trade law and foreign trade criminal law. The lack of compliance measures and inadequate employee training , for example, can cause difficulties. However,international trade relations and the complexity of international contracts and agreements also increase the risk of legal disputes.
Prohibitions and authorization requirements
Restrictions in foreign trade law usually take the form of bans or authorization requirements. In addition, economic operators may be required to submit certain accompanying documents or report certain transactions as part of monitoring measures. The current foreign trade law restrictions for Germany as an economic territory originate from both national and EU regulations. The national regulations include the Foreign Trade and Payments Act (AWG) and the Foreign Trade and Payments Ordinance (AWV). In addition, national foreign trade law is increasingly influenced by overriding EU law. In some areas, such as dual-use goods, national regulations therefore often only have the character of supplementary provisions.
The customs administration monitors compliance with restrictions on foreign trade. The customs administration monitors the movement of goods and also has extensive powers in the areas of services, capital and payment transactions. Among other things, it is responsible for prosecuting and punishing administrative offenses under foreign trade law. The prosecution and punishment of criminal offenses under foreign trade law, on the other hand, is the responsibility of the public prosecutor's offices.
Foreign trade reporting obligations
Capital and payment transactions with third countries are subject to various reporting obligations and restrictions. The reporting obligations of the Foreign Trade and Payments Ordinance (AWV) are of great interest to the German Bundesbank as well as to the Federal Government and trade associations, particularly for statistical purposes. With the help of these reports, the balance of payments of the Federal Republic of Germany and the shareholdings of foreigners in domestic companies can be determined, among other things. For this reason, the competent authorities consistently monitor compliance with the reporting obligations. Any violation can be punished with a fine of up to 30,000 euros.
Companies and private individuals are required by law to submit monthly or annual reports on foreign trade transactions to the Deutsche Bundesbank. The "Bundesbank Extranet" is available for the secure electronic submission of reports, which enables submission via the General Reporting Portal Statistics (AMS). Reports in paper form are no longer accepted. schirach.law supports you in preparing these reports correctly and submitting them on time.
Notifications of foreign shareholders and participations
The stock statistics from the direct investment survey provide information on the amount and structure of cross-border equity investments of 10% or more of the capital or voting rights. It thus shows the interdependence of the German economy with the global economy. Companies and natural persons submit the report once a year and submit it electronically to the Deutsche Bundesbank.
Companies and natural persons who directly hold 10% or more of the shares or voting rights in a foreign company with a balance sheet total (converted) of more than EUR 3 million are also subject to a reporting obligation. This regulation is referred to as K3 reporting. If a directly held foreign company is dependent on a German investor, for example through a majority shareholding, the other foreign shareholdings that are dependent on this foreign company must also be reported. On 04.12.2024, the Federal Cabinet adopted amendments to the Bureaucracy Relief Ordinance which will come into force on January 01, 2025. A reporting obligation for foreign assets will only apply from a balance sheet total of 6 million euros.
Domestic companies are also subject to a reporting obligation if 10% of the company shares or voting rights are attributable to a foreigner or several economically connected foreigners. This regulation is referred to as a K4 notification. In addition, there is a reporting obligation if 50% of the company shares or voting rights are attributable to a domestic company or private individual that is in turn dependent on a foreigner. Domestic branches and permanent establishments of foreign companies are also subject to K4 reporting. However, there are exceptions to this rule. For example, the reporting obligation does not apply if the balance sheet total of the domestic company or the business assets allocated to the branch do not exceed EUR 3 million (EUR 6 million from January 1, 2025).
Notification of payments
Domestic companies, banks, public bodies and private individuals are obliged to report monthly payments of more than EUR 12,500 or the equivalent. They may receive these payments from foreigners or on their behalf from residents or make them to foreigners or on their behalf to residents.
Within the meaning of the Foreign Trade and Payments Ordinance (AWV), reportable payments include transfers, direct debits, cheques, bills of exchange, cash payments as well as offsetting and clearing. The transfer of goods and rights to companies, branches and permanent establishments is also subject to the reporting obligation.
Only transactions received from foreigners or for their account from residents(incoming payments) or made to foreigners or for their account to residents(outgoing payments) are subject to reporting requirements. "Residents" refers to any institutional unit that has its registered office in Germany, regardless of the nationality of natural persons. The decisive factor is the place where the activity relevant to foreign trade is carried out. Domestic" includes the German economic territory, while "foreign" includes all other countries. "Foreigners" are therefore institutional units abroad. Accordingly, all payment transactions between residents and non-residents must be reported, regardless of where the account is held. Incoming and outgoing payments fall under Z4 reporting. If the payments are in connection with securities and financial derivatives, Z10 reports must be submitted.
Payments up to a value of EUR 12,500 and payments for the import and export of goods are exempt from this obligation. Payments for the granting, taking out or repayment of loans for which the originally agreed term or notice period is no longer than twelve months are also not subject to the reporting obligation. On 04.12.2024, the Federal Cabinet adopted amendments to the Bureaucracy Relief Ordinance which will come into force on January 01, 2025. In future, foreign payments will only have to be reported if they exceed 50,000 euros.
Self-disclosure exempting from punishment in foreign trade law
A central provision in foreign trade law is the possibility of self-disclosure in accordance with Section 22 (4) of the Foreign Trade and Payments Act (AWG). This provision allows companies and private individuals to disclose violations of foreign trade law and, under certain conditions, avoid the consequences of fines. schirach.law knows the exact requirements and ensures that no mistakes are made when preparing the voluntary disclosure.
With the entry into force of the Act on the Modernization of Foreign Trade Law, Section 22 (4) of the Foreign Trade and Payments Act opens up the possibility of a self-disclosure exempting from sanctions in the event of negligent violations. According to Section 22 (4) AWG, prosecution as an administrative offense is suspended in the case of negligent violations within the meaning of Section 19 (3) to (5) AWG if the violation is discovered as part of self-monitoring, reported to the competent authority and appropriate measures are taken to prevent further violations.
A report is considered voluntary if the competent authority has not yet started an investigation into the violation. Pursuant to Section 397 (1) AO, an investigation is deemed to have commenced if an authority takes measures that are clearly aimed at taking action against a person under criminal or fine law, even if this person has not yet been named.
Pursuant to Section 22 para. 4 sentence 1 AWG, a violation must have been discovered in the course of self-monitoring, which means that the discovery must take place within the sphere of the person concerned. This follows from the reverse conclusion of Section 22 para. 4 sentence 2 AWG, which excludes self-disclosure as soon as official investigations have been initiated.
In addition, Section 22 para. 4 sentence 1 AWG requires that suitable measures are taken to prevent similar violations in the future. This provision serves to remedy the misconduct committed and to ensure that a legally compliant situation is restored.
Whether exemption from fines can be achieved through a voluntary disclosure depends crucially on whether the conduct is classified as negligent.
Importance of customs criminal law
Customs law - in particular criminal customs law - plays a central role, especially for companies that trade in goods on a large scale. With the steady growth in cross-border trade, the number of investigations in criminal customs law is also increasing. In addition, private individuals can also come into contact with criminal customs law when traveling due to possible non-declaration of cash or irregularities in the handling of excisable goods.
Customs criminal law is a special form of criminal tax law. The German Fiscal Code (AO) defines customs offenses as criminal offenses that are punishable under the tax laws (Sections 369 ff. AO). These include customs evasion (Sections 3 (3), 370 AO), favoritism (Section 369 (1) No. 4 AO), breach of customs regulations (Section 372 AO), commercial, violent and gang smuggling (Section 373 AO), tax evasion (Section 374 AO) and tax stamp forgery (Sections 148, 149 StGB, Section 369 (1) No. 3 AO).
In addition to customs offenses, criminal customs law also includes customs offenses in accordance with Section 377 of the German Fiscal Code (AO). These are minor violations of the legal system for which the legislator has not deemed it necessary to make them punishable. Administrative offenses are only punishable by fines, which can amount to up to 50,000 euros and may even result in a trade ban. Administrative offenses under criminal customs law include reckless tax evasion under Section 378 AO, tax jeopardy under Section 379 AO, excise tax jeopardy under Section 381 AO and jeopardizing import and export duties under Section 382 AO.
The defense against allegations of customs offences has several special features compared to other criminal proceedings. Due to the cross-border nature of the case, it is often difficult to clarify the facts of the case. In addition, the legal matter is complex and extensive. Customs criminal and fine proceedings can have serious consequences. In customs criminal proceedings, there is a risk of both fines and prison sentences. In addition, company fines may be imposed or even business bans may be imposed.
Self-disclosure exempting from punishment under customs law
Customs criminal law also recognizes the voluntary disclosure exempting from punishment under tax law in accordance with Section 371 AO. However, exemption from punishment only applies in the case of allegations of customs evasion. Other possible criminal offenses, such as breach of customs regulations, smuggling or customs theft, remain unaffected by this. If the voluntary declaration is unsuccessful, there is no exemption from prosecution. In this case, the voluntary disclosure can only be taken into account as a mitigating factor.
Our services
Violations of foreign trade law and customs law lead to considerable sanctions. schirach.law offers preventive advice by identifying risks and developing strategies to avoid violations. In doing so, we provide our clients with comprehensive information on the legal framework and the possible consequences. Another important aspect is the definition of compliance measures. We implement internal guidelines and processes to ensure compliance with legal regulations.
schirach.law also accompanies customs audits. In some cases, customs audits, particularly in the case of complaints, result in administrative offense proceedings and fines. Criminal charges also sometimes arise. Accordingly, we provide support in dealing with problematic issues. In addition, we assist our clients with foreign trade audits and advise them on voluntary declarations exempting them from prosecution and on the disclosure of violations.
schirach.law advises and defends managing directors, board members and senior employees in customs and criminal law matters. Those affected are often not only exposed to criminal prosecution, but also have to reckon with liability notices and possible recourse claims from their employers. As part of the defence, schirach.law prepares an analysis of the individual situation and develops tailor-made strategies to minimize the legal risks. We also help to avoid personal sanctions for the management. In addition, we develop strategies to avoid corporate sanctions, for example to prevent entries in the central trade register or the denial of foreign trade and customs authorizations.
