AWG violations and embargo violations

The Foreign trade law In Germany, the Foreign Trade and Payments Act (AWG) and the Foreign Trade and Payments Ordinance (AWV) govern economic transactions between domestic and foreign countries. This includes the movement of goods and services, capital and payment transactions, as well as the movement of foreign assets and gold between domestic residents. These regulations are primarily governed by the Foreign Trade Act (AWG) and the Foreign Trade and Payments Ordinance (AWV). 

Playing Embargoes Sanctions play a role, restricting (partial) or completely prohibiting (total) free foreign trade with certain countries. These affect the export and import of goods and services. Total embargoes are rare; partial embargoes are much more common. The purpose of such embargoes is security policy, primarily intended to maintain peace. Violations of embargoes are subject to fines and penalties and are prosecuted accordingly.

Embargoes can relate to various aspects of trade transactions. For example, there are country-specific embargoeswhich are directed against a country or specific groups of people within a country. This is particularly common in arms embargoes. Furthermore, there are goods-related embargoes, which are independent of the country and primarily result from regulations. One example of this is the so-called Dual-Use Regulation of the European Union (Council Regulation (EC) No. 428/2009 (Dual-Use) of 5 May 2009 setting up a Community regime for the control of exports of dual-use items and technology). In addition, personal embargoes This results in a prohibition on providing financial assets or other economic resources to certain groups of people or organizations listed on government sanctions lists. These groups may not receive any financial assets or other economic resources.

A current example is the extensive sanctions that the EU has imposed against Russia since 2022. EU sanctions against Russia have been in place since 2014; in 2022, these were expanded with further massive sanctions. These include travel bans and the freezing of funds and assets of certain individuals. Furthermore, the Russia sanctions Institutions such as political parties and companies in the military or defense sector. In addition, there are export and import restrictions on goods to and from Russia, as well as bans on the provision of certain services.

Foreign trade regulations

In the Foreign Trade Act (AWG) The Act regulates economic trade relations between the Federal Republic of Germany and foreign countries. The law aims to regulate foreign trade, establish import and export restrictions, and enforce trade embargoes. Among other things, it stipulates the monitoring and enforcement of arms embargoes and economic sanctions against states. Violations of the Foreign Trade Act also constitute a violation of the Fiscal Code (AO).

The Foreign Trade Act (AWG) binds both private individuals and organizations and companies participating in international trade. According to Section 1, Paragraph 1 of the AWG, the movement of goods, services, capital, payments, and other commercial transactions with foreign countries, as well as the movement of foreign assets and gold between domestic residents, are generally free. This principle is subject to the restrictions prescribed by the AWG or a legal regulation based on the AWG.

Risk of criminal or administrative proceedings

In the case of violations of the AWG, the AWG distinguishes between acts that are merely classified as administrative offenses (Section 19 AWG) and those that constitute criminal offenses (Sections 17 and 18 AWG).

One crime according to Section 17 AWG is given if someone intentionally violates sanctions or economic embargoes decided by the UN Security Council or the EU Council. According to Section 17 Paragraph 7 of the Foreign Trade and Payments Act (AWG), this provision applies to all German citizens, regardless of the country in which the offense was committed. The offense is punishable by a prison sentence of between 1 and 10 years. This penalty is increased according to Paragraphs 2 and 3 of the provision if the offense is committed for the secret service of a foreign power, for commercial purposes, or as a member of a gang. In less serious cases or in cases of reckless conduct, however, the penalty is reduced. 

The Criminal provisions of Section 18 AWG encompass various offenses. These include, among others, violations of a ban on import, export, or transit, as well as the transfer, delivery, and provision of certain goods or services. Furthermore, the violation of regulations requiring licensing for exports, imports, and investments is regulated, as is the illegal handling of frozen funds or economic resources blocked by sanctions. The smuggling of certain goods and military espionage are also regulated in Section 18 of the Foreign Trade and Payments Act (AWG). These offenses carry a prison sentence of between three months and five years, and in rare cases, a fine.

As Administrative offense according to Section 19 AWG Various offenses are also punished. This is particularly the case when a crime under the Foreign Trade and Payments Act is committed negligently. For example, this is conceivable if incomplete information is provided when applying for export licenses or if errors occur in operational processes that result in a violation. Furthermore, Section 19 (2) of the Foreign Trade and Payments Act also sanctions intentional false statements or incomplete statements. This can lead to serious economic disadvantages and is punishable by fines of up to €500,000. 

In addition to the imposed penalties, possible consequences include confiscation of profits and sales, as well as criminal consequences such as entries in the central trade register and even a ban on trading.

Section 23 of the AWG contains a general Obligation to provide information for companies participating in foreign trade, in order to monitor compliance with the Foreign Trade and Payments Act (AWG) and the legal regulations issued under it. According to Section 23 (1) AWG, the Main Customs Office and the Federal Office for Economic Affairs and Export Control (BAFA), among others, can request the submission of business documents. Section 23 (2) AWG allows for access to the business premises of the companies required to provide information. The AWG also regulates the Monitoring of freight, mail and travel traffic by the customs authorities. Goods originating from this area must be presented and, if necessary, made available to customs for inspection.

Investigations for violations of the Foreign Trade Act can result from tip-offs from banks, customs inspections, unclear export declarations, or deviations in import and export controls. However, complaints from business partners, former employees, or competitors can also trigger the initiation of criminal proceedings.

In order to avoid criminal consequences, the AWG offers the possibility of Voluntary disclosureThis must be voluntary and complete and is only effective if no investigations have already been initiated by the authorities. It should be noted that in this case, all profits made from the crime must be repaid. 

If you are a suspect in an investigation, it is always advisable to contact a lawyer experienced in AWG proceedings. You should also leave it to a lawyer to assess whether filing a voluntary disclosure is appropriate.

Behavior during a house search

It often happens that the accused only becomes aware of criminal proceedings for violations of the Foreign Trade and Payments Act (AWG) during a house search. In AWG proceedings, these searches are usually carried out by Customs or the Customs Investigation Office.

In case of a house search, you should definitely Quiet preserve and cooperate, as resistance can be considered an aggravating factor in later court proceedings. In any case, it is advisable to Right to remain silent as an accused person and not to provide any information. It is essential that a search is carried out at the moment of the search. lawyer  The officers should then be instructed to wait until the lawyer arrives before conducting the search. However, in case of doubt, they should at least Witnesses consult. 

Let the search warrant and provide a copy, as this will state which rooms and objects are being searched. You can submit these items voluntarily, but you should object to their seizure. If necessary, they will then be confiscated. You should ensure that this is recorded in detail and obtain a copy. Accompany the officers during the search and check whether they are looking for any items other than those listed in the warrant. Intentional or grossly negligent violations of the search regulations will render the obtained evidence unusable.

Risk of arrest and arrest warrant

Violations of the Foreign Trade and Payments Act (AWG) can be punished with significant prison sentences. Therefore, there is always a risk that an arrest warrant will be issued against the accused, that they will be arrested, and that they will be remanded in custody pending the main hearing. This requires strong suspicion and grounds for detention, such as a risk of absconding, a risk of repetition, or a risk of obstruction of justice. Unfortunately, in cases involving offenses with an international connection—such as AWG violations related to export and import—investigating judges quickly conclude that there is a risk of absconding.

Upon arrest, the accused person must be brought before a judge no later than the following day. A lawyer must then be consulted. It is strongly recommended to choose a lawyer experienced in defending defendants in pretrial detention, and especially in proceedings related to the impounding of foreign nationals.