German Lawmakers Crack Down on Subsidy Fraud

Stricter Laws and Harsher Penalties Aim to Combat Widespread Abuse of Government Subsidies

BERLIN, GERMANY - In an effort to curb the rampant misuse of government subsidies, German lawmakers have introduced a series of reforms aimed at preventing individuals and organizations from exploiting public funds. The new measures come in response to a string of high-profile cases where subsidies were diverted for personal gain or used to fund illegal activities.

Tougher Penalties for Subsidy Fraud

Under the revised legislation, individuals and entities found guilty of subsidy fraud can face imprisonment ranging from three months to five years, depending on the severity of the offense. In particularly egregious cases, penalties can be as long as 10 years in prison.

New Provisions for Plea Agreements

The law also introduces new provisions for plea agreements, allowing prosecutors to negotiate settlements with accused individuals or organizations. The goal is to encourage cooperation and prevent lengthy trials, while still ensuring that those responsible for fraud are held accountable.

Stricter Rules for Pre-Trial Settlements

Additionally, the German Code of Criminal Procedure has been amended to include stricter rules for pre-trial settlement, allowing prosecutors to dispense with prosecution in cases where the perpetrator’s guilt is minor and there is no public interest in pursuing charges.

Key Provisions at a Glance

Penalties for subsidy fraud: imprisonment ranging from three months to five years, or up to 10 years in particularly serious cases
Plea agreements: prosecutors can negotiate settlements with accused individuals or organizations
Pre-trial settlement: prosecutors can dispense with prosecution in minor cases where there is no public interest
De minimis rules:
- Money laundering: no de minimis rule applies
- Terrorism financing: penalty range decreased for low-value transactions (€50 or less)
- Fraud: especially serious cases may be excluded if asset components are of minor value (€50 or less)

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