Penalties and non-penal consequences in customs criminal law

Penalties and non-penal consequences in customs criminal law

1. discontinuation of criminal proceedings

If the degree of guilt (in the case of customs and excise duty criminal proceedings, therefore, as a rule, the amount of the tax evasion that has occurred) does not stand in the way of this, the criminal proceedings may be discontinued in accordance with Section 153a of the Code of Criminal Procedure (StPO). The defendant has the option of terminating the proceedings by paying a fine and allowing the criminal action to be extinguished.

The discontinuation of proceedings pursuant to Section 153a of the Code of Criminal Procedure does not constitute proof of guilt, nor can the payment of the condition be interpreted to mean that the defendant has actually evaded taxes. The period for payment of the condition is set at a maximum of 6 months and can be extended once by 3 months. The amount of the fine is based on the amount that would be assessed in the case of a penalty order (see below). Pursuant to Section 12 No. 4 of the Income Tax Act (EStG), the fine paid does not reduce income and is therefore not deductible.

A discontinuation without conditions pursuant to Section 153 of the Code of Criminal Procedure (StPO), Section 398 of the Fiscal Code (AO) can only be considered in cases of minor tax evasion. The discontinuation is at the discretion of the authorities and depends not only on the amount of evasion, but also on other characteristics of guilt.

2. penalty order

If the degree of guilt is such that the proceedings cannot be discontinued, but the case is still relatively minor, the proceedings can be terminated by a penalty order. If the person concerned does not lodge an objection to the penalty order served on him within the time limit, the order becomes final and constitutes a criminal conviction. In the event of an objection, a main hearing is held and the penalty order takes on the function of an indictment.

In the penalty order, a fine or a suspended prison sentence of up to one year can be pronounced. The fine is usually calculated on the basis of the amount of tax evaded. The number of daily sentences tends to increase progressively for low amounts of evasion and degressively for high amounts.

3. fine

The amount of the fine is calculated by multiplying the daily sentences by the amount of a daily sentence. The amount of the daily sentence is based on the "net income" that the offender has or could have on a daily basis, in accordance with section 40(2) sentence 2 of the Criminal Code. Net income is the amount remaining to the offender after deduction of statutory benefits (tax and social security contributions), extraordinary burdens and, in the case of offenders not subject to social security contributions, expenses for life and health insurance. Further deductions are not eligible, e.g. interest and redemption payments for a home. If the offender does not make use of existing earning opportunities or does not make sufficient use of them, or agrees on lower than usual remuneration for his work, he may not be placed in a better position as a result in the assessment of the fine. Maintenance payments of the offender shall be taken into account appropriately, even if they are not proven (AStBV [St] 2012 No. 86). The minimum amount of a daily sentence is 1 EUR, the maximum amount is 5,000 EUR. This results in a range of fines from EUR 5 to EUR 21,600,000.

4. particularly serious case and imprisonment

In particularly serious cases, however, the minimum penalty is already 6 months imprisonment. A particularly serious case is, among other things, already regularly present if under use of counterfeited or falsified vouchers taxes were continuously evaded. Another so-called standard example of a particularly serious case is when taxes are evaded to a particularly large extent (or corresponding tax advantages are obtained). In its ruling of December 2, 2008 (BGHSt 53, 71), the German Federal Court of Justice (BGHSt 53, 71) ruled that a particularly serious case is one in which tax is evaded to an extent of EUR 50,000 or more and in which the tax claim is jeopardized to an extent of EUR 100,000 or more. This case law was obviously approved by the legislator (cf. BGH, decision of May 5, 2011 - 1 StR 116/11 = NStZ 2012, 162), but still contains contradictions in detail (cf. BGH, decision of December 15, 2011 with comment by Grießhammer, NZWiSt 2012, 154 et seq.).

In the opinion of the Federal Court of Justice, a custodial sentence is possible from an evasion amount of 50,000 euros, apart from special aggravating or mitigating circumstances. From 100,000 euros, a custodial sentence is the rule, although this can still be suspended. Above an amount of 1,000,000 euros, a suspended sentence (up to 2 years) is generally no longer a possibility (see most recently BGH, judgment dated February 7, 2012 - 1 StR 525/11: The BGH overturned the conviction of a tax evader to a total suspended prison sentence of 2 years by the Augsburg Regional Court because the sentence, which in the view of the Senate was too lenient, no longer represented a fair compensation for guilt. The convicted man had evaded more than EUR 890,000 and EUR 240,000 respectively through two acts. The "particularly weighty reasons for mitigation" required by the Federal Supreme Court were not present; in particular, the duration of the proceedings of three and a half years was regularly not sufficient in economic criminal cases to justify a more lenient sentence. See BGH, judgment of December 2, 2008, 1 StR 416/08).

In addition to the amount evaded, other reasons for assessing the penalty also play a role (cf. AStBV [St] 2012 No. 77). In particular, the following must be taken into account to mitigate the penalty:

• acting out of self-inflicted coercion or distress or for someone else's benefit,
• active assistance in the investigation of the crime,
• "unsuccessful" self-disclosure,
• confession,
• restitution (payment of evaded taxes),
• inexperience with taxes or low level of education, insofar as these circumstances have influenced the crime.

On the other hand, the following are regularly taken into account as aggravating circumstances:

• acting for profit, gross self-interest or greed,
• unscrupulous and reckless actions,
• tax evasion over a longer period of time,
• previous suspensions under conditions and relevant previous convictions (but cf. § 51 BZRG),
• particularly reprehensible execution (e.g. forgery of documents, false affidavit pursuant to Section 95 AO, inducement of third parties - in particular dependent persons - to participate, manipulation of books and receipts, violation of accounting and retention obligations with regard to business documents - cf. BGH, judgment of July 28, 2010 - 1 StR 643/09, accounts in a false or fictitious name),
• violation of special declaration and payment obligations, e.g. in the case of wage and sales tax,
• obstructing the investigation of the crime (e.g. destroying or setting aside evidence, influencing witnesses, deliberately misleading the investigating authorities),
  active conduct to thwart the tax claim (e.g. transfer of assets abroad).

5. extra-criminal consequences and secondary consequences of tax evasion

Criminal and extra-criminal consequences can have more serious effects than the penalty itself. As a measure of safeguarding and correction, the court may, already in the criminal proceedings, impose a ban on practicing an occupation, profession, trade or business. The duration of the ban is one to 5 years, but in rare exceptional cases it can even be pronounced for life, Section 70 (1) sentence 2 StGB.

Convictions in customs criminal proceedings can also have an impact on authorizations and permits under customs law. For example, customs law permits are regularly dependent on the applicant or permit holder fulfilling certain personal requirements. Such requirements are, for example, that " no serious or repeated infringements" of customs regulations have been committed, Art. 145 (1) (a) Union Customs Code (Art. 253c in conjunction with Art. 14h Customs Code Implementing Regulation), or that the applicant has been convicted of a serious criminal offense in connection with his economic activity, Art. 24 Union Customs Code-IA (Art. 253b (3) (c) Customs Code Implementing Regulation). According to the official regulations of the Federal Ministry of Finance, the European concept of "offences against customs regulations" applies to all offences under customs law and related areas of law.

Accordingly, tax and customs evasion are among these offenses. Convictions in customs criminal proceedings thus provide the main customs office responsible for licenses and permits with knowledge of any misconduct on the part of the applicant or license holder. For example, with regard to an imminent granting of AEO status, after gaining this knowledge, a rejection or non-acceptance of the application, Art. 32 Union Customs Code IIA [Art. 14f Customs Code Implementing Regulation], but also a revocation of the already granted AEO status, Art. 34 Union Customs Code IIA [Art. 14v Customs Code Implementing Regulation], can be considered, since the behavior underlying the conviction allows conclusions to be drawn about the reliability of the customs trader. In the case of revocation, special consideration should be given to the fact that this has immediate effect, Art. 28 (3) Union Customs Code [Art. 9 (3) Customs Code, Art. 14v (2) (1) Customs Code Implementing Regulation].

For members of the legal and tax advisory professions, doctors, pharmacists, architects, bank employees, civil servants and employees of the public service, there is a risk of professional and disciplinary consequences.

Lawyers, notaries, tax consultants and auditors must, in the worst case, expect to be disbarred pursuant to Section 114 (1) No. 5 BRAO, Section 90 (1) No. 4 StBerG, Section 19 (1) No. 3 WPO or removed from office pursuant to Section 97 (1) BNotO in the event of a conviction for a tax offense or a tax misdemeanor.

Physicians must face the withdrawal of their license to practice medicine pursuant to § 5, Subsection 2, in conjunction with § 3, Subsection 1, No. 2. § 3 Para. 1 No. 2 BÄO due to unreliability or unworthiness to practice the medical profession. The revocation of the license to practice medicine shall be effected by the competent state authority according to state law pursuant to Section 12, Paragraph 4, Sentence 1 BÄO. In the case of pharmacists, the revocation of the license to practice medicine is governed by §§ 6 Para. 2 in conjunction with 4 Para. 1 Sentence 1 No. 2 BApO.

In the case of architects, a deletion of the entry in the list of architects initiated by the court of honor can be considered in accordance with the state laws on architects (Quedenfeld/Füllsack-Bach, Verteidigung in Steuerstrafsachen, 4th ed., marginal no. 1172).

For bank employees, a tax offense or misdemeanor may result in the revocation of the license pursuant to §§ 33 para. 1 nos. 2 and 3 in conjunction with 35 para. 2 no. 3 KWG.

A civil service relationship ends ipso iure pursuant to Section 41, Paragraph 1, Sentence 1, No. 1 BBG in the event of a conviction for an intentional offense and a custodial sentence of at least one year. In the case of a conviction for certain offenses, in particular bribery, 6 months imprisonment is already sufficient. The entitlement to salary and pension ends pursuant to Section 39 BBG. An application for clemency pursuant to Section 43 BBG against the loss of civil servant rights promises little chance of success. Consequences under civil service law are also possible in the event of sentences of lesser severity. This also applies in the case of a voluntary declaration exempting from punishment.

Administrative consequences of tax misconduct may include: passport refusal or revocation, consequences under weapons and hunting laws, prohibition of entry to areas of an airport that are not generally accessible, deportation of a foreigner and prohibition of a trade due to unreliability.

Finally, tax misconduct can result in exclusion from public contracts. Section 3 (1) No. 15 of the Corruption Register of the State of Berlin provides for registration if Section 370 of the German Fiscal Code (AO) has been violated. According to Section 3 (2) No. 3 KRG, this even applies if the proceedings have been finally discontinued on condition pursuant to Section 153a StPO. However, the latter provision is likely to massively violate the presumption of innocence pursuant to Article 6 (2) ECHR.