With the German Transparency Register and Financial Information Act (Transparenzregister- und Finanzinformationsgesetz, BGBl. I 2021, S. 2083), stricter provisions of the German Money Laundering Act (Geldwäschegesetz – GwG) came into force on 1 August 2021. Legal entities under private law (e.g. AG, SE, GmbH, UG (haftungsbeschränkt), rechtsfähiger Verein (association with legal capacity), rechtsfähige Stiftung (foundation with legal capacity)), registered partnerships (e.g. OHG, KG, GmbH & Co. KG) and other legal structures (e.g. trusts, nichtrechtsfähige Stiftung mit eigennützigem Stiftungszweck (foundation with no legal capacity with a self-interested foundation purpose)) are now subject to extended reporting obligations for the disclosure of ultimate beneficial owners (wirtschaftlich Berechtigte) to the German Transparency Register.
The most important changes at a glance:
- Comprehensive disclosure obligation: The German Transparency Register has been upgraded from a subsidiary register to a full register. As a result, all legal entities subject to transparency requirements are now obliged to identify their ultimate beneficial owners (wirtschaftlich Berechtigte), to keep this information up to date and to disclose the information electronically to the German Transparency Register for registration without delay.
- No fiction of disclosure: The obligation to disclose the ultimate beneficial owners (wirtschaftlich Berechtigte) to the German Transparency Register was generally deemed to be fulfilled if the information was obtained from other publicly accessible and electronically retrievable registers (e.g. commercial register, register of associations). This fiction of disclosure expired on 31 July 2021.
- Subsequent disclosure obligation: All legal entities previously privileged by the fiction of disclosure are now obliged to actively disclose subsequent information on their ultimate beneficial owners (wirtschaftlich Berechtigte). Need to act now: The last of the statutory transitional periods for complying with this subsequent disclosure obligation expired on 31 December 2022.
- Impending sanctions: Intentional or negligent breach of the disclosure obligations is a regulatory offence and can be punished with a heavy fine. In addition, non-appealable sanctions are published on the website of the German Federal Office of Administration (naming and shaming).
Checklist: Have you complied with your reporting obligations to the German Transparency Register?
We recommend that you check now whether
- your legal entity is subject to transparency requirements;
- the information on the ultimate beneficial owners (wirtschaftlich Berechtigte) has been correctly and completely identified and disclosed to the German Transparency Register;
- the disclosed information is up to date.
Is your legal entity subject to transparency requirements and do you need assistance with electronic disclosure to the German Transparency Register? Or do you need assistance in identifying your ultimate beneficial owners (wirtschaftlich Berechtigte)?
We can assist you throughout the entire process of complying with your reporting obligations to the German Transparency Register. We are also happy to answer any other questions you may have about the German Transparency Register. Please do not hesitate to contact us at transparenzregister@raue.com
(12 October 2023)