diff --git a/codan/org.eclipse.cdt.codan.checkers/src/org/eclipse/cdt/codan/internal/checkers/ReturnChecker.java b/codan/org.eclipse.cdt.codan.checkers/src/org/eclipse/cdt/codan/internal/checkers/ReturnChecker.java
index 548eae05997..b917dece9bd 100644
--- a/codan/org.eclipse.cdt.codan.checkers/src/org/eclipse/cdt/codan/internal/checkers/ReturnChecker.java
+++ b/codan/org.eclipse.cdt.codan.checkers/src/org/eclipse/cdt/codan/internal/checkers/ReturnChecker.java
@@ -31,6 +31,7 @@ import org.eclipse.cdt.core.dom.ast.IASTForStatement;
 import org.eclipse.cdt.core.dom.ast.IASTFunctionDeclarator;
 import org.eclipse.cdt.core.dom.ast.IASTFunctionDefinition;
 import org.eclipse.cdt.core.dom.ast.IASTIfStatement;
+import org.eclipse.cdt.core.dom.ast.IASTLabelStatement;
 import org.eclipse.cdt.core.dom.ast.IASTNamedTypeSpecifier;
 import org.eclipse.cdt.core.dom.ast.IASTReturnStatement;
 import org.eclipse.cdt.core.dom.ast.IASTSimpleDeclSpecifier;
@@ -150,6 +151,10 @@ public class ReturnChecker extends AbstractAstFunctionChecker {
 				IASTStatement[] statements = ((IASTCompoundStatement) body).getStatements();
 				if (statements.length > 0) {
 					IASTStatement last = statements[statements.length - 1];
+					// get nested statement if this is a label
+					while (last instanceof IASTLabelStatement) {
+						last = ((IASTLabelStatement) last).getNestedStatement();
+					}
 					// now check if last statement if complex (for optimization reasons, building CFG is expensive)
 					if (isCompoundStatement(last)) {
 						if (endsWithNoExitNode(func))
diff --git a/codan/org.eclipse.cdt.codan.core.test/src/org/eclipse/cdt/codan/core/internal/checkers/ReturnCheckerTest.java b/codan/org.eclipse.cdt.codan.core.test/src/org/eclipse/cdt/codan/core/internal/checkers/ReturnCheckerTest.java
index 9169ac64a96..b69f416b1dd 100644
--- a/codan/org.eclipse.cdt.codan.core.test/src/org/eclipse/cdt/codan/core/internal/checkers/ReturnCheckerTest.java
+++ b/codan/org.eclipse.cdt.codan.core.test/src/org/eclipse/cdt/codan/core/internal/checkers/ReturnCheckerTest.java
@@ -255,4 +255,19 @@ public class ReturnCheckerTest extends CheckerTestCase {
 		loadCodeAndRunCpp(getAboveComment());
 		checkErrorLine(1);
 	}
+
+	//	int
+	//	fp_goto(int a)
+	//	{
+	//	if (a) {
+	//	goto end;
+	//	}
+	//	end:
+	//	return (a);
+	//	}
+	public void testGoto_Bug346559() {
+		loadCodeAndRun(getAboveComment());
+		checkNoErrors();
+	}
+
 }
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