Used Services and Cookies

Our website uses cookies to enhance your user experience. Some cookies are essential for the operation and management of the site, while others are used for anonymous statistics or personalized content. Please note that limiting cookie use may impair certain functions of the website.

More information: Imprint, Data protection

Essential cookies help make a website usable by enabling basic functions like page navigation and access to secure areas of the website or, for example, saving your cookie settings. The website cannot function properly without these cookies. This category cannot be deactivated.
  • Name:
    ukie_a_cookie_consent_manager
  • Domain:
    blomstein.com
  • Purpose:
    Stores the cookie preferences of website visitors.
  • Name:
    blomstein_session
  • Domain:
    blomstein.com
  • Purpose:
    The session cookie is essential for the basic functioning of the website. It allows users to navigate through the site and use its basic features.
  • Name:
    XSRF-TOKEN
  • Domain:
    blomstein.com
  • Purpose:
    This cookie serves security purposes and aids in preventing Cross-Site Request Forgery (CSRF) attacks. It is a technical necessity.
These cookies collect information about how you use a website, e.g. which pages you have visited and which links you have clicked on.
  • Name:
    _ga
  • Domain:
    blomstein.com
  • Purpose:
    The Google Analytics cookie _ga is used to distinguish users by assigning a unique identification number to each visitor. This number is sent to Google Analytics each time a page is accessed in order to collect user, session and campaign data and to statistically evaluate the use of the website. The cookie helps website operators to understand how visitors interact with the website by collecting information anonymously and generating reports.
  • Name:
    _ga_*
  • Domain:
    blomstein.com
  • Purpose:
    The _ga_[container_id] cookie, specific to Google Analytics 4 (GA4), is used to distinguish website visitors by assigning a unique ID for each session and each user. It enables the collection and analysis of data on user behavior on the website in anonymized form. This includes tracking page views, interactions and the path users take on the website to give website operators deeper insights into the use of their site and improve the user experience.
  • Name:
    _gid
  • Domain:
    blomstein.com
  • Purpose:
    The _gid cookie is a cookie set by Google Analytics that is used to distinguish users. It assigns a unique identification number to each visitor to the website, which is sent to Google Analytics each time the page is accessed. This makes it possible to track and analyze user behavior on the website over a period of 24 hours.
  • Name:
    _gat_gtag_UA_77241503_1
  • Domain:
    blomstein.com
  • Purpose:
    The _gat_gtag_UA_77241503_1 cookie is part of Google Analytics and Google Tag Manager and is used to throttle the request rate, i.e. it limits data collection on high traffic websites. This cookie is linked to a specific Google Analytics property ID (in this case UA-77241503-1), which means that it is used for performance monitoring and control of data collection for that specific website property.

Germany’s Sanctions Enforcement Acts

18.11.2022

On the 26th of October, the German Federal Government published the draft text of the Second Sanctions Enforcement Act (Sanktionsdurchsetzungsgesetz II – SDG II), which is set to pass by the end of this year. The proposal is the second part of the previously planned two-part legislative package and builds on the First Sanctions Enforcement Act (Sanktionsdurchsetzungsgesetz I – SanktDG I), which came into force in the end of May earlier this year.

Since the beginning of the Russian-Ukraine war, Germany has faced hurdles in achieving effective enforcement of EU sanctions. Specifically, there was a need for a clearer accordance of legal power to competent authorities, an improved coordination amongst the agencies and legal as well as administrative instruments to investigate and identify assets. In tandem, these two laws will address these deficiencies and provide teeth to EU’s economic diplomacy efforts against Russia.

This briefing will cover the key features of both legal acts and discuss the implications to private individuals and businesses.

The First Sanctions Enforcement Act (SDG I)

The SDG I primarily aims to provide competent authorities, in particular the Deutsche Bundesbank, the Federal Financial Supervisory Authority (BaFin), the Central Office for Financial Transaction Investigations (FIU), the Customs Criminal Police Office (ZKA) and the Federal Office of Economic Affairs and Export Control (BAFA), with more extensive powers in the enforcement of EU sanctions:

  • SDG I enables the competent authorities to exchange information relevant to sanctions, including personal data in compliance with data protection regulations. The competent authorities may also retrieve data from the German Transparency Register, in which the beneficial owners are recorded.

  • The competent authorities are authorised to summon and question witnesses, secure evidence, search homes and business premises, inspect land registers and other public registers to identify sanctioned persons’ assets. Additionally, these authorities may also identify and inquire information on bank accounts, safe deposit boxes and securities accounts of sanctioned persons.

  • Furthermore, to clarify ownership, SDG I places criminal obligation upon sanctioned person to report any funds and other economic resources within the scope of German law, that are subject to a limitation of disposition by EU sanctions, to the Deutsche Bundesbank or the Federal Office of Economic Affairs and Export Control. The penalty of failure to report is up to one year imprisonment or a fine. In the future, the reporting is to go to the central office for sanction enforcement.

  • SDG I also allows securing funds and other economic resources, located in Germany, pending clarification of ownership.

When it comes to sanctioned persons and identifying their assets, SDG I contains the power of criminal law instruments in an administrative setting and provides the competent authorities with more tools for an effective enforcement of EU Sanctions.

The Second Sanctions Enforcement Act (SDG II)

Building upon SDG I, the proposed Second Sanctions Enforcement Act II (SDG II) will bring forth further structural changes in sanctions enforcement and will also facilitate the fight against money laundering. The draft texts of SDG II embodies the following features:

  • SDG II will create a Central Office for Sanctions Enforcement, which will be nested under the Central Customs Authority initially and subsequently be relocated under the newly established Federal Financial Crime Authority. As discussed above, once established, a sanctioned person shall notify this office his or her assets within the scope of German law, that are subject to a limitation of disposition by EU sanctions. Moreover, the central office will be able to conduct investigations on sanctioned persons (natural or legal) as well as on assets or economic resources.

  • SDG II will set up a central register, which will record information on funds and economic resources subject to limitation of disposition by EU sanctions. All competent authorities will be able to access this register.• SDG II will set up a central register, which will record information on funds and economic resources subject to limitation of disposition by EU sanctions. All competent authorities will be able to access this register.

  • Through the SDG II the United Nations’ sanctions list will be directly applicable in Germany without the need for an implementing law.

  • Under SDG II, the Federal Financial Supervisor Authority may appoint an independent special commissioner to monitor sanctions compliance in companies within the scope of German law. The special commissioner will have broad authority to ensure that the company complies with sanctions regulations.

  • Foreign companies that acquire real estate in Germany, either directly or through share deals, are already required to notify the German Transparency Register. SDG II extends this obligation to all existing real estate ownerships. The reporting deadline is 31st of December 2023. The Transparency Register will also be connected with the national land register to allow synergy of data and information. In addition to the reporting obligations, SDG II will prohibit cash payments in real estate transactions.

  • Furthermore, SDG II tightens existing notification requirements for legal entities to the Transparency Register and implements additional notification requirements for notaries involved. It also stipulates that an entity must provide a reason for doing so if it could not identify a beneficial owner and had to rely on a legal representative. These notification obligations also exist for foreign legal entities with assets in Germany.

  • In the financial market, SDG II will have the authority to classify sanctioned persons and their legal representatives “unreliable”.

Practical Impacts

As a practical matter, SDG II places additional requirements on everyday lives. Specifically, as discussed above, SDG II will have impacts on real estate transactions and natural or legal persons who own (shares of) real estate directly or indirectly. In general, all entities organised under German law as well as foreign entities might bear additional notification obligations pursuant to SDG II.

Moreover, SDG II will most likely add additional red tape to entities which have numerous shareholders or have difficulties in identifying a beneficial owner, e.g., in a listed company, in which many individual and institutional investors own shares to the company.

Conclusion

BLOMSTEIN encourages in particular foreign companies with assets in Germany to review to what extent they are subject to new notification requirements pursuant to SDG II.

BLOMSTEIN is at your disposal at any time to answer questions on the practical implementation as well as on the scope of application of these measures. Please do not hesitate to contact Pascal Friton, Roland M. Stein, Florian Wolf, Laura Louca or Tobias Ackermann.

back to overview