5 August 2021
On August 1, 2021, the Transparency Register and Financial Information Act has come into force, bringing with it fundamental changes to the German Anti-Money Laundering Act (Geldwäschegesetz – GWG) for every company with its registered office in Germany. The most crucial new regulation relates to the notification obligations towards the German Register of Ultimate Beneficial Owners (Transparenzregister – Transparency Register): every company must now always notify the Transparency Register in full of the information on its ultimate beneficial owners and keep it up to date. The key exception from the reporting obligations, the "notification fiction", has been repealed without substitution. This makes the Transparency Register an independent full register, irrespective of the information available in other public registers.
The change to a full register means that references to other registers is no longer possible. Instead, all information on companies and their beneficial owners is separately and independently listed in the Transparency Register in structured data sets. Only for registered non-profit associations (eingetragener Verein) there will be an automated entry of the members of the board of directors, insofar as these can be derived from the register of associations. However, even these automated entries must be checked by the registered non-profit associations and corrected if necessary.
This change in the law will constitute the main burden for companies, because the originally intended networking and automated synchronization with other registers, in particular the Commercial Register, is thus abandoned. As a result, all companies that were previously able to rely in whole or in part on the existing transparency of the Commercial Register with regard to their UBOs must now (re)communicate all information separately and manually to the Transparency Register. Even in the case of so-called "fictitious" beneficial owners (Section 3 (2) sentence 5 GwG), management bodies such as managing directors and board members as well as any changes in their person must be reported to the Transparency Register in full and independently.
The notification obligations towards the Transparency Register must be fulfilled by all legal entities under private law with their registered office in Germany. In addition, foreign companies that are not already registered in an EU Transparency Register are affected, insofar as they acquire real estate or land in Germany (directly or through the acquisition of a property owning company).
Transitional periods only apply to companies for whose benefit a notification fiction previously applied, i.e. if all required information was previously electronically retrievable from other eligible public registers. The deadlines within which the first complete notification to the Transparency Register has to be submitted vary depending on the legal form:
|Stock Corporation (AG), Societas Europaea (SE),
Partnership Limited by Shares (KGaA)
|March 31, 2022|
|Limited Liability Company (GmbH), (European) Cooperative, Partnership||June 30, 2022|
|All other types of legal entities (e.g. Partnership (OHG),
Limited Partnership (KG), Foundation)
|December 31, 2022|
Additional transitional periods apply to the provisions on fines corresponding to the notification obligations and the obligations to submit discrepancy reports.
A series of automated prosecutions of omitted, late or incorrect Transparency Register notifications by the German Federal Administrative Office (Bundesverwaltungsamt) is imminent. We strongly advise taking the issue of the Transparency Register seriously. Incorrect or missing entries in the Transparency Register should be corrected as soon as possible. Because as soon as a hearing letter from the Federal Administrative Office is received, a fine can hardly be avoided without experienced legal advice - even if the company believed in good faith that it was complying with the legal requirements. The particular consequences of a fine, especially the resulting threat of entries in the central business register and the register for fine decisions of the Federal Administrative Office, can have a considerable impact on the company's economic progress.
We advise on all matters relating to the Transparency Register and your obligations under the German Money Laundering Act as a whole.
Please do not hesitate to contact us if assistance is needed in
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