The construction sector, the privatization of former communist east German enterprises, financial malfeasance in private firms, and the awarding of public contracts represent areas of some concern. German government officials continue their efforts to actively root out domestic corruption. The German Government has announced plans to increase penalties for bribery of German officials, for corrupt practices between companies, and, under the law against unfair competition, for price-fixing by companies competing for public contracts, to establish contact points for whistle blowing, and for rotation of government personnel in areas prone to corruption. Another proposal, opposed by German industry, would create a central register of companies known for corrupt practices to be barred from bidding for public contracts. Government officials are to be forbidden from accepting gifts linked to their jobs.
Domestic bribes are legally no longer tax-deductible.
Certain German multinationals are reputed to be active in bribery in developing countries and such expenditures are still legally tax exempt. A number of German companies are beginning to push the German government to end this tax exemption. Germany supported an OECD Ministerial decision in May to negotiate, by the end of 1997, a convention criminalizing the bribery of foreign public officials. The target date for the convention's entry into force is before the end of 1998. High unemployment is the key economic problem in Germany.