Compliance guide: The duty of supervision under regulatory law, Sections 30, 130 OWiG

The actions of the management board of an AG or the management of a GmbH are also the focus of regulatory law. The legal framework for the actions of managing directors is also subject to fines under regulatory law. Particular mention should be made of the duty of supervision under regulatory law, Sections 30, 130 OWiG.

§ Section 130 of the Administrative Offenses Act (OWiG):

(1) Any person who, as the owner of a business or enterprise, intentionally or negligently fails to take the supervisory measures necessary to prevent infringements of obligations incumbent on the owner in the business or enterprise, the violation of which is punishable by a penalty or fine, shall be deemed to have committed an administrative offense if such an infringement is committed which would have been prevented or made considerably more difficult by proper supervision. The necessary supervisory measures also include the appointment, careful selection and monitoring of supervisors.

(2) …

(3) If the breach of duty is punishable by a fine, the administrative offense may be punishable by a fine of up to one million euros. If the breach of duty is punishable by a fine, the maximum fine for the breach of supervisory duty shall be determined by the maximum fine threatened for the breach of duty. Sentence 2 shall also apply in the event of a breach of duty that is simultaneously punishable by a penalty and a fine if the maximum fine threatened for the breach of duty exceeds the maximum fine pursuant to sentence 1.”

A fine can be imposed both on the member of management who violates the duty of supervision and on the company.

Scope of the duty of supervision

The requirements derived from the aforementioned provisions (§§, 130, 30, 9 OWiG), which should not be underestimated, are exemplified by a judgment of the Bavarian Supreme Court (BayObLG) from 2001 (NJW 2002, 766). The subject of this ruling was the necessity of import licenses for textiles (sweatshirts, children’s clothing, T-shirts and blouses). The BayObLG stated:

“The contractor can fulfill his monitoring obligation pursuant to § 130 para. 1 OWiG by appointing a supervisor to monitor the employees in his business. If the business owner does not know or understand essential provisions applicable to his business operations, he must either acquire the knowledge required for the monitoring task in order to be able to fulfil his duty himself, or he must organize an internal control system that he has monitored externally, for example by a tax consultant or auditor.

(…)

This is because such checks generally uncover emerging violations in good time. In addition, employees generally work more diligently if they know that they are being monitored.”

The BayObLG (in deviation from the decision at first instance) then comments as follows on the frequency of the checks it considers necessary:

“Furthermore, the opinion of the district court judge that the managing director would have fulfilled his supervisory duty with an inspection of the witness in the form of a random check by a competent third party “at most once a year” is incorrect. … What is therefore required is at least one inspection that covers such a significant part of the staff’s activities that, on the one hand, it is perceived by the staff as an inspection and, on the other hand, is likely to uncover any infringements with a high degree of probability. Accordingly, even in companies where the staff have proven to be reliable, only simple regulations are to be observed and the risk of infringements is to be classified as average at most, at least monthly checks must be carried out.”

Increased monitoring obligation in the event of infringements

If violations have already occurred, the BayObLG considers even more extensive controls to be necessary. The unanimous opinion is that there is an increased duty to monitor after violations have occurred or in the case of important protected goods and difficult legal issues.

Breach of supervisory duty only if supervisory measures would actually have prevented the breach in question

However, before a breach of the duty of supervision can be established, considerable requirements must be met to ensure that the supervisory measures would actually have prevented the infringements, as a decision by the Higher Regional Court of Frankfurt (NJW-RR 1993, 23) shows:

“In this respect, merely stating that the omitted supervisory measure would have largely prevented the risk of infringements is not sufficient. Rather, it must be examined what concrete effect the individual reasonable supervisory measures that were omitted in breach of duty would have had and whether the infringement would have been avoided with sufficient certainty as a result (see BGH, WuW/E 1799 (1800) – Revisionsabteilung).”