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Germany Deferred Prosecution Agreement: What It is and What It Means for Businesses

In recent years, many companies have faced legal troubles for their involvement in corruption and bribery schemes. The German government has taken a strong stance against these offenses and has implemented measures to combat them. One such measure is the Deferred Prosecution Agreement (DPA), which offers companies the chance to avoid criminal prosecution in exchange for certain concessions.

So, what exactly is a DPA? It is an agreement between the government and a company that allows the company to avoid criminal charges by meeting certain conditions. In Germany, DPAs are a relatively new development, having only been introduced in 2019. However, they have quickly become an important tool for prosecutors in cases involving corruption and white-collar crime.

Under a typical DPA, a company must admit wrongdoing, pay a fine, cooperate with investigators, and implement changes to its compliance and monitoring programs. In exchange, prosecutors agree to suspend criminal charges for a set period of time, typically up to three years. If the company meets all the conditions of the DPA, the charges are then dropped.

The benefits of a DPA are obvious for companies facing criminal charges. Avoiding a conviction can prevent damage to a company`s reputation, save it from costly legal fees, and help it avoid sanctions such as a ban on participating in government contracts. For prosecutors, DPAs offer a chance to hold companies accountable for their actions while also promoting cooperation and reform.

Since the introduction of DPAs in Germany, several high-profile cases have been resolved using this method. In 2019, German engineering firm Bilfinger SE agreed to pay a €35 million ($39.5 million) fine and implement anti-corruption measures in order to avoid criminal prosecution for bribery allegations. The following year, Airbus SE agreed to pay a record-breaking €3.6 billion ($4.1 billion) in fines and penalties in a DPA that resolved allegations of corruption in several countries.

It is worth noting that not all cases are eligible for a DPA. Prosecutors will typically only consider a DPA if they believe that the company is cooperative and committed to reform. Additionally, the terms of a DPA will vary depending on the specific circumstances of the case.

The introduction of DPAs in Germany represents a significant shift in the country`s approach to white-collar crime. By offering companies a chance to avoid criminal charges, while still holding them accountable for their actions, German prosecutors hope to promote a culture of compliance and transparency in the business world. Companies that take steps to prevent corruption and bribery will be more likely to avoid legal troubles, while those that engage in illegal activities will face serious consequences.

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