11
Mon, Feb. 08, 2010
Illegal Information on Tax Evasion
AK - Mannehim. German authorities once again were in the delicate position of weighing to buy illegally obtained information on German tax evaders in one of the world's notorious tax havens, thereby potentially rendering themselves liable to prosecution and risking courts to bar the evidence in later criminal proceedings against evaders.
The first case occurred in 2008 with data obtained in Liechtenstein and ended with a quite publicly staged arrest of then Deutsche Post chief executive Klaus Zumwinckel. Unlike Zumwinckel, other tax evaders chose the court room over striking a deal with prosecuters, and lost, at least for now.
Those defendants had argued against the use of the acquired information since its collection had been illegal and in violation of international conventions on judicial assistance.
The Bochum Circuit Court found no reason to quash the evidence, prompting defendants to seek redress before Germany's Federal Constitutional Court which should decide the issue some time in 2010.
The new case involving data from Switzerland is quite similar, but this time the state government of North-Rhine Westphalia rather than Germany's federal intelligence service purchased the information for 2.5 million Euros. The legal problems surrounding the purchases are largely identical, including aspects of procedural, constitutional and public international law.
In Germany, some aspects of procedural integrity concerning collection of evidence have not yet evolved as it has in the American criminal law system. German courts usually balance the interest of Germany's criminal law system in the prosecution of offenders against the defendant's rights and the procedural integrity. Moreover, the unlawful collection of evidence has to violate the defendantīs legal sphere in order to be blocked, meaning it has to have violated a procedural right that exists for the express purpose of safeguarding a defendantīs rights.
With respect to public international law, the Bochum court did not follow the defendantīs arguments because the violation during the collection phase and the court doubted even the occurrence of such a violation. It considered the alleged violation insufficient to bar the evidence from use in a trial. Only when the use of the information itself would amount to a breach of international law, it held, would the poisoning of the evidence follow.
With regard to procedural and international law aspects, its decision may not withstand the scrutiny applied by the Federal Constitutional Court. This author discusses vulnerabilities of the ruling in an article appearing in the International Enforcement Law Reporter
AK - Mannehim. German authorities once again were in the delicate position of weighing to buy illegally obtained information on German tax evaders in one of the world's notorious tax havens, thereby potentially rendering themselves liable to prosecution and risking courts to bar the evidence in later criminal proceedings against evaders.
The first case occurred in 2008 with data obtained in Liechtenstein and ended with a quite publicly staged arrest of then Deutsche Post chief executive Klaus Zumwinckel. Unlike Zumwinckel, other tax evaders chose the court room over striking a deal with prosecuters, and lost, at least for now.
Those defendants had argued against the use of the acquired information since its collection had been illegal and in violation of international conventions on judicial assistance.
The Bochum Circuit Court found no reason to quash the evidence, prompting defendants to seek redress before Germany's Federal Constitutional Court which should decide the issue some time in 2010.
The new case involving data from Switzerland is quite similar, but this time the state government of North-Rhine Westphalia rather than Germany's federal intelligence service purchased the information for 2.5 million Euros. The legal problems surrounding the purchases are largely identical, including aspects of procedural, constitutional and public international law.
In Germany, some aspects of procedural integrity concerning collection of evidence have not yet evolved as it has in the American criminal law system. German courts usually balance the interest of Germany's criminal law system in the prosecution of offenders against the defendant's rights and the procedural integrity. Moreover, the unlawful collection of evidence has to violate the defendantīs legal sphere in order to be blocked, meaning it has to have violated a procedural right that exists for the express purpose of safeguarding a defendantīs rights.
With respect to public international law, the Bochum court did not follow the defendantīs arguments because the violation during the collection phase and the court doubted even the occurrence of such a violation. It considered the alleged violation insufficient to bar the evidence from use in a trial. Only when the use of the information itself would amount to a breach of international law, it held, would the poisoning of the evidence follow.
With regard to procedural and international law aspects, its decision may not withstand the scrutiny applied by the Federal Constitutional Court. This author discusses vulnerabilities of the ruling in an article appearing in the International Enforcement Law Reporter
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Wed, Jan. 27, 2010
No Internet Fears at Supreme Court
CK - Washington. German top courts are less fearful of the Internet than German politicians, voters and lower courts. Fearless, and knowledgeable, too. Time and again, they correct knee-jerk reactions from lower courts and parliamentarians.
When a convicted criminal sued a public radio service to have it remove references to his full name in 1993 reports stored online in the station's archive, the Federal Supreme Court in Karlsruhe reversed the lower courts and decided in favor of the radio service on December 15, 2009.
The lower courts assumed that by serving his sentence, the plaintiff had acquired a heightened interest in his constitutionally protected personality rights which outweighed the public interest in learning his identity. The national public radio was supposed to redact its online archives.
The supreme court for civil matters held, however, that German constitutional protections of press freedom outweigh that individual's interest, and that data protection laws do not affect the continued availability of journalistic data properly handled at the time of the crime.
To prevent chilling effects on the press caused by lower courts, the court, in this matter, VI ZR 227/08, clarified its constitutional balancing test. Redaction may still be needed when the crime is insignifant and an ancient report only serves the curious.
CK - Washington. German top courts are less fearful of the Internet than German politicians, voters and lower courts. Fearless, and knowledgeable, too. Time and again, they correct knee-jerk reactions from lower courts and parliamentarians.
When a convicted criminal sued a public radio service to have it remove references to his full name in 1993 reports stored online in the station's archive, the Federal Supreme Court in Karlsruhe reversed the lower courts and decided in favor of the radio service on December 15, 2009.
The lower courts assumed that by serving his sentence, the plaintiff had acquired a heightened interest in his constitutionally protected personality rights which outweighed the public interest in learning his identity. The national public radio was supposed to redact its online archives.
The supreme court for civil matters held, however, that German constitutional protections of press freedom outweigh that individual's interest, and that data protection laws do not affect the continued availability of journalistic data properly handled at the time of the crime.
To prevent chilling effects on the press caused by lower courts, the court, in this matter, VI ZR 227/08, clarified its constitutional balancing test. Redaction may still be needed when the crime is insignifant and an ancient report only serves the curious.
Sat, Jan. 09, 2010
Gerglisch in German Courts
CK - Washington. Gerglisch will become an official language in German courts. Fearing the sound of international litigation being sucked into Anglo courts and into arbitration, a statutory change is in the works.
The courts feel well equipped to handle the linguistic challenge and look forward to establishing special panels that--similar to commercial panels--consist of one judge and two laypersons. The Cologne circuit has already laid the ground work and permits hearings in English.
Until the amendments to the constitutional statute for the judiciary, Gerichtsverfassungsgesetz, pass, however, written submissions and opinions must be in German. FAZ newspaper summarizes, in German, the legislative project which already authorizes parties to state a language preference in their choice of forum clause.
CK - Washington. Gerglisch will become an official language in German courts. Fearing the sound of international litigation being sucked into Anglo courts and into arbitration, a statutory change is in the works.
The courts feel well equipped to handle the linguistic challenge and look forward to establishing special panels that--similar to commercial panels--consist of one judge and two laypersons. The Cologne circuit has already laid the ground work and permits hearings in English.
Until the amendments to the constitutional statute for the judiciary, Gerichtsverfassungsgesetz, pass, however, written submissions and opinions must be in German. FAZ newspaper summarizes, in German, the legislative project which already authorizes parties to state a language preference in their choice of forum clause.
Sun, Jan. 03, 2010
German Business Law Negotiations: Chapter
CK - Washington. Instead of a potentially biased, too friendly review, here is the index of my book chapter as recently published in Wegerich (ed), Business Laws of Germany, vol. 2, West, New York (2009), ISBN 9780314900050:
CK - Washington. Instead of a potentially biased, too friendly review, here is the index of my book chapter as recently published in Wegerich (ed), Business Laws of Germany, vol. 2, West, New York (2009), ISBN 9780314900050:
CHAPTER 18. NEGOTIATIONS IN GERMANY: THE BUSINESS LAW PERSPECTIVEI summarized, in German, the concept for the chapter which differs in purpose greatly from the wonderfully rich chapters of descriptions of German substantive law, in Neues Buch: Verhandeln mit Deutschen.
I. INTRODUCTION
18:1 In general
II. THE UNDERPINNINGS
18:2 In general
18:3 Unity, justice, and liberty
18:4 The lawyers
18:5 - The standard lawyer
18:6 - Differentiation among German lawyers
18:7 The German legal system
III. VIGNETTES AND ADVICE FOR NEGOTIATIONS
18:8 Hierarchy and titles; tickle the titled
18:9 Parochialism
18:10 Sign here
18:11 Do not sign this
18:12 Preconceived notions
18:13 Substantial performance
18:14 Honest mistake
18:15 - Little white lie
18:16 - Insolvency and piercing the corporate veil
18:17 Who negotiates?
18:18 Faltering negotiations
18:19 - Liability for contract still in negotiation
18:20 - Discovery
18:21 - Double-crossing litigation
IV. SUMMARY
18:22 Conclusory remarks
Mon, Dec. 28, 2009
Changes in German Estate and Probate
CK - Washington. Major changes in estate and probate law become effective on January 1, 2010. German inheritance law forms a book in the five-book civil code, Bürgerliches Gesetzbuch. The Berlin attorney general summarized the key changes in a press release of December 28, 2009.
While the statutory shares of heirs remain largely unchanged, new rules govern the forced statutory shares of disinherited statutory heirs. On the one hand, disinheriting a statutory heir will become easier and the tests clearer, mainly through a test considering crimes. On the other, more persons will benefit, in particular foster and step children.
New rules seek to protect the integrity of assets of an estate. Instead of asset sales necessitated by the old rules requiring buy-out of other heirs, the new rules permit payments to such heirs over time. The amendments apply to standard heirs and disinherited heirs with forced shares. A significant benefit to decedents and care-givers is a provision that encourages care-giving in return for an enhanced inheritance.
In addition, the statute of limitations in German inheritance matters will generally shrink from 30 years to three years. Finally, the recapture of gifts made before death will change to a staggered solution from an all-or-nothing 10-year approach so that a gift made eight years earlier will be recaptured for the computation of distributions at 2/10 of its value at the date of death.
CK - Washington. Major changes in estate and probate law become effective on January 1, 2010. German inheritance law forms a book in the five-book civil code, Bürgerliches Gesetzbuch. The Berlin attorney general summarized the key changes in a press release of December 28, 2009.
While the statutory shares of heirs remain largely unchanged, new rules govern the forced statutory shares of disinherited statutory heirs. On the one hand, disinheriting a statutory heir will become easier and the tests clearer, mainly through a test considering crimes. On the other, more persons will benefit, in particular foster and step children.
New rules seek to protect the integrity of assets of an estate. Instead of asset sales necessitated by the old rules requiring buy-out of other heirs, the new rules permit payments to such heirs over time. The amendments apply to standard heirs and disinherited heirs with forced shares. A significant benefit to decedents and care-givers is a provision that encourages care-giving in return for an enhanced inheritance.
In addition, the statute of limitations in German inheritance matters will generally shrink from 30 years to three years. Finally, the recapture of gifts made before death will change to a staggered solution from an all-or-nothing 10-year approach so that a gift made eight years earlier will be recaptured for the computation of distributions at 2/10 of its value at the date of death.
Sat, Dec. 26, 2009
Liability of Address User
CK - Washington. Bad news for commercial users of German email addresses: The renters of email address lists can be liable under competition and general spam rules for addressing email to addressees who have not agreed to receive it. The Düsseldorf court of appeals imposes liability upon the corporate entity, and personally upon the management of the corporation, to properly screen rented lists of email addresses before using them. The November 24, 2009 decision and a summary are available, in German, at the Medien Internet und Recht website.
Update: A December 29, 2009 summary, also in German, Rätze, OLG Düsseldorf: Geschäftsführer haftet persönlich für unzulässige E-Mail-Werbung, has more on the personal liability of management and the practicality of screening 360,000 acquired addresses.
CK - Washington. Bad news for commercial users of German email addresses: The renters of email address lists can be liable under competition and general spam rules for addressing email to addressees who have not agreed to receive it. The Düsseldorf court of appeals imposes liability upon the corporate entity, and personally upon the management of the corporation, to properly screen rented lists of email addresses before using them. The November 24, 2009 decision and a summary are available, in German, at the Medien Internet und Recht website.
Update: A December 29, 2009 summary, also in German, Rätze, OLG Düsseldorf: Geschäftsführer haftet persönlich für unzulässige E-Mail-Werbung, has more on the personal liability of management and the practicality of screening 360,000 acquired addresses.
Sun, Nov. 29, 2009
Business Correspondence in Germany
CK - Washington. Even minor rules can seem like major hurdles once you start exploring and compiling every potential issue. Munich lawyer Udo Schwerd exemplifies that with his thoughtful note on required disclosures in business correspondence.
Schwerd assembled statutory rules for various types of entities doing business in Germany. His compilation is so comprehensive that it looks like a road block to doing business in Germany.
The German rules do not, however, cover foreign businesses, and even for a German entity, only a small sum of specific rules apply: Mole hills, not mountains. Most of them are entirely common-sensical and none should cause writer's block.
CK - Washington. Even minor rules can seem like major hurdles once you start exploring and compiling every potential issue. Munich lawyer Udo Schwerd exemplifies that with his thoughtful note on required disclosures in business correspondence.
Schwerd assembled statutory rules for various types of entities doing business in Germany. His compilation is so comprehensive that it looks like a road block to doing business in Germany.
The German rules do not, however, cover foreign businesses, and even for a German entity, only a small sum of specific rules apply: Mole hills, not mountains. Most of them are entirely common-sensical and none should cause writer's block.
Thu, Nov. 26, 2009
Domain Name Violation: Proper Defendant?
CK - Washington. Who is the proper defendant in a domain dispute over a .de domain name? The Frankfurt district court held on November 16, 2009 in the matter 2-21 O 139/09, that the registrant of the domain and the administrative contact listed with the .de domain name are suitable targets.
The matter, commonly known as regierung-mittelfranken.de, involves an owner in Panama who kept changing administrative contacts, reports explain. DENIC, the German registry for the .de cTLD, refused to delist the domain in accordance with a judgment against an admin-C, lost in Frankfurt and has filed an appeal.
The federal supreme court in civil matters, Bundesgerichtshof, has conclusively determined when DENIC is required to honor a decision to delist a domain, and none of the proper approaches involve the admin-C, the registry argues. DENIC's position has long been criticized as improperly defeating final judgments involving .de domains.
CK - Washington. Who is the proper defendant in a domain dispute over a .de domain name? The Frankfurt district court held on November 16, 2009 in the matter 2-21 O 139/09, that the registrant of the domain and the administrative contact listed with the .de domain name are suitable targets.
The matter, commonly known as regierung-mittelfranken.de, involves an owner in Panama who kept changing administrative contacts, reports explain. DENIC, the German registry for the .de cTLD, refused to delist the domain in accordance with a judgment against an admin-C, lost in Frankfurt and has filed an appeal.
The federal supreme court in civil matters, Bundesgerichtshof, has conclusively determined when DENIC is required to honor a decision to delist a domain, and none of the proper approaches involve the admin-C, the registry argues. DENIC's position has long been criticized as improperly defeating final judgments involving .de domains.
Tue, Nov. 17, 2009
A New IP in German Law?
CK - Washington. Germany is approaching the statutory creation of a new intellectual property right, known in German as Leistungsschutzrecht.
The term combines several German words, encompasses elements of legal protection for accomplishments, services and products and is intended primarily to afford print media more control over digital reproduction, principally with respect to links and excerpts on the internet.
Some fear that authors for digital media as well as search engines would be cramped. Presently, no bill exists. Heise Online, the internet news service of a traditional publisher and a valiant defender of internet freedoms, summarizes the current state of the debate on November 17, 2009.
The new federal government in Berlin anticipates introducing such a statute. A major law journal, Kommunikation & Recht is expected to present in its December 2009 issue contrasting perspectives.
CK - Washington. Germany is approaching the statutory creation of a new intellectual property right, known in German as Leistungsschutzrecht.
The term combines several German words, encompasses elements of legal protection for accomplishments, services and products and is intended primarily to afford print media more control over digital reproduction, principally with respect to links and excerpts on the internet.
Some fear that authors for digital media as well as search engines would be cramped. Presently, no bill exists. Heise Online, the internet news service of a traditional publisher and a valiant defender of internet freedoms, summarizes the current state of the debate on November 17, 2009.
The new federal government in Berlin anticipates introducing such a statute. A major law journal, Kommunikation & Recht is expected to present in its December 2009 issue contrasting perspectives.
Mon, Nov. 16, 2009
Language Does not Imply German Jurisdiction
CK - Washington. Just because a website uses the German language, German courts may not necessarily exercize jurisdiction over a site based outside of Germany and not directing its business at customers in Germany, the Munich court of appeals ruled on October 10, 2009 in the matter 29 U 2636/09.
The decision is unavailable on the court's website--only the building is free of barriers, the site proclaims--but has been discussed on the Online & Recht site and the Rechts-News Archiv site on November 17, 2009.
According to these second-hand reports, the case involves a Swiss web site that a German party sued in Germany for trademark infringement. The court determined that the effects of the infringement may point to German jurisdiction. But it required also a nexus of the internet presentation with German consumers whom the infringement would confuse.
The Swiss site used the German language for its German-language customers and offered its wares only in Swiss currency. The language-nexus only is unsufficient for jurisdictional purposes, the court determined.
CK - Washington. Just because a website uses the German language, German courts may not necessarily exercize jurisdiction over a site based outside of Germany and not directing its business at customers in Germany, the Munich court of appeals ruled on October 10, 2009 in the matter 29 U 2636/09.
The decision is unavailable on the court's website--only the building is free of barriers, the site proclaims--but has been discussed on the Online & Recht site and the Rechts-News Archiv site on November 17, 2009.
According to these second-hand reports, the case involves a Swiss web site that a German party sued in Germany for trademark infringement. The court determined that the effects of the infringement may point to German jurisdiction. But it required also a nexus of the internet presentation with German consumers whom the infringement would confuse.
The Swiss site used the German language for its German-language customers and offered its wares only in Swiss currency. The language-nexus only is unsufficient for jurisdictional purposes, the court determined.
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