Key Takeaways
- In a decision under Section 421(1) No. 3 of the German Code of Criminal Procedure (StPO), the Mannheim Regional Court waived asset forfeiture because the proceedings — at least regarding the forfeiture — would have involved an “unreasonable effort.” This was done in exchange for the company paying a significantly lower monetary amount.
- The ruling demonstrates that, contrary to widespread belief, forfeiture decisions are not necessarily rigid or unnegotiable. There is the possibility of resolving the case consensually, similar to a “deal.”
Our firm recently obtained a decision under Section 421(1) No. 3 StPO before a regional court, in which the court waived the intended forfeiture of €1.55 million from our client, a company, in exchange for a payment of €150,000 to the injured party.
This is a highly practice-relevant ruling with significant signal value, particularly for the defense of corporate clients.
The Case
The criminal proceedings concerned allegations that the executives of a corporate group had misused grant funds, which were intended for project partners, by redirecting them within an intra-group cash pooling mechanism to finance the corporate group.
The party subject to potential forfeiture had allegedly received portions of the grant funds through this mechanism, without being personally involved in the misconduct.
The Decision
The court waived the forfeiture under Section 421(1) No. 3 StPO, reasoning that, as far as the forfeiture was concerned, the proceedings would have required an “unreasonable effort.”
The Key Aspect
The court conditioned the fulfillment of these requirements on a voluntary partial repayment by the party subject to forfeiture to the EU. A settlement agreement, by contrast, was not required; arranging one would have been difficult due to the lack of direct legal relationships.
Practical Relevance
Following reforms to the law on asset recovery, there had been some misunderstandings suggesting that forfeiture is inherently “unnegotiable.”
In reality, this is not the case. Section 421 StPO allows not only for a complete waiver of forfeiture but also for a partial, monetary-based waiver. The German Federal Court of Justice (BGH) had already confirmed this in its decision of August 2, 2018 (Az.: 1 StR 311/18 – LG Mannheim, NStZ 2018, 742 ff., with noteworthy commentary by Schneider).
The present decision should provide practitioners with even greater incentive to take proactive measures in cases of threatened forfeiture, for example through actions or agreements with the injured party. Such measures often correspond to a “victim-offender mediation” under Section 46a StGB. As this decision demonstrates, this approach is particularly relevant even in cases where the legal effect of Section 73e(1) StGB cannot apply.
It is persuasively argued that such a legal arrangement in favor of the (alleged) injured party is sufficient to justify an “unreasonable effort” for continuing the proceedings under Section 421(1) No. 3 StPO, since the interest in forfeiture is naturally reduced by voluntary compensation—especially in the context of a settlement.
Note: Out of respect for our client’s requested confidentiality, we are unable to publish the full decision or case number.
