The second act on the effective enforcement of sanctions (Sanctions Enforcement Act II) came into force on January 1, 2023. This includes not only sanctions-related measures, but also amendments to other laws, in particular the German Money Laundering Act (GwG), and has implications for the obligations of companies with regard to the transparency register.
Changes through Sanctions Enforcement Act II
- As of 1 January 2023, companies to be newly registered in the Transparency Register are required to disclose, among other things, (i) whether no person meets the requirements of an actual beneficial owner or (ii) whether such a person could not be identified when reporting a (mere) fictitious beneficial owner.
- As of 1 April 2023, real estate may no longer be acquired with cash or by making payments in cryptocurrencies or commodities. The same applies to the acquisition of shares in companies whose assets directly or indirectly include domestic real estate. In particular, corresponding evidence of compliance with the cash payment prohibition must be submitted to the notaries notarizing the transaction.
- By 30 June 2023, foreign companies must make entries in the Transparency Register not only when they (directly or indirectly) acquire new real estate in Germany, but also if they already hold (directly or indirectly) ownership of real estate located in Germany. The only exception is for foreign companies that are already entered in the transparency register of another EU state.
- By 31 July 2023, the Transparency Register will be expanded to include information on the real estate owned (directly or indirectly) by the respective company. The land registry offices in Germany will transmit the relevant information to the transparency register for this purpose. In addition, changes in the land register are to be automatically transmitted to the office keeping the transparency register.
- Organizations should use the tightening of the law as an opportunity to check whether all group companies have fulfilled their relevant transparency register obligations.
- In particular, companies should check whether real estate located in Germany is held (directly or indirectly) and whether the corresponding land register entries are up-to-date.
- It should also be ensured that entries of fictitious beneficial owners (legal representatives) in the transparency register are regularly updated.