In a nutshell: There is news in some ongoing criminal proceedings related to illegal ship recycling which are being pursued through the German courts. The recent decisions of the district court of Hamburg and the local court of Rendsburg may provide some clarity on the conditions under which ship sales may lead to criminal prosecutions under German law.

District court of Hamburg:

At the beginning of April 2025 the district court of Hamburg rejected the opening of main proceedings (Hauptverfahren) against two defendants who had been involved in the sale of a container ship by a Hamburg-based ship owner to a Hong Kong cash buyer in late 2016. By their assistance, the defendants were accused condoning the post-sale illegal scrapping of the ship on an Indian beach. The court decided that the German Waste Shipment Act (Abfallverbringungsgesetz) which provides the penal provision (Strafnorm) for illegal scrapping, was not applicable to the facts of this matter and thus rejected opening main proceedings (Hauptverfahren) in the case.

The applicability of the Waste Shipment Act to ship sales is an area of some disagreement. While public prosecutors in several current cases assume the application of the Waste Shipment Act to various ship sales, the counsels of ROXIN (cf. Altenburg/Kremer in wistra 2023, 133 et seqq.) argue instead that the Act can only apply if the ship was in German waters at the time that the decision to sell her was made, or any time thereafter. In any other case, the requisite element of the offense that "the shipment of waste into, out of or through the federal territory" is not satisfied.

The district court in this case referenced ROXIN's opinion, and opined that the Waste Shipment Act is only applicable to ship sales with subsequent illegal scrapping if:

1.    To leave German waters with a ship is at least planned; and
2.    At some point after being classified as waste, the ship crosses the border to exit German territorial waters.

The public prosecutor's office has appealed the district court's decision to the Hamburg Court of Appeal (Oberlandesgericht Hamburg). However, if the Hamburg Court of Appeal would confirm the decision of the district court, this would be an important indication as to how future scrapping cases may be judged. Namely, that in cases where (a) a seller sells their ship to a buyer who intends to scrap the ship (thus potentially classifying the ship as 'waste' under the Waste Shipment Act), (b) the ship is then, or at any time after the sale, located in German waters, and (c) the ship is then scrapped at a recycling shipyard which is not certified under European law; there is a risk of criminal liability attaching to the sale.

We say 'potentially classifying the ship as waste' as it remains unclear as to what specific action will trigger this classification under the Waste Shipment Act. The district court of Hamburg stated that it would consider the ship as waste under the Waste Shipment Act as from the time of the acceptance of the purchase offer. For example, in this case (according to the court's reasoning) the offer had already been accepted before the passing of the shareholders' resolution approving the sale and before the sale and purchase agreement was signed.

Local court of Rendsburg:

A criminal trial has started in the local court of Rendsburg. Similar to the previous case the ship was not sailing in German territorial waters at the time of, nor after, the sale. It has been reported that as of first day of the trial, the court had already raised some doubts regarding the public prosecutor's arguments on the application of the Waste Shipment Act to the case. The next day of the trial is set to be on 30 April 2025. A decision is expected shortly.

We will continue to keep you informed of any developments in scrapping proceedings of note. If you have any questions, please get in touch with your contact person at EHLERMANN RINDFLEISCH GADOW or with Maje Tode or Hanno Geißler.