Sanctions Screening in Germany: A New Era for Efficient Enforcement
Germany has taken significant steps to enhance its sanctions enforcement capabilities, focusing on improving the effectiveness of EU sanctions implementation. The creation of the Central Office for Sanctions Enforcement (ZfS) is at the heart of this effort.
Creation of the ZfS
The ZfS was established through the Sanctions Enforcement Act (Sanktionsdurchsetzungsgesetz or SanktDG) in December 2022. Its primary objectives are to investigate and prevent potential sanctions violations, as well as enforce financial sanctions targeting individuals.
Powers of the ZfS
The ZfS has limited powers, including:
- Demanding information or documents
- Interrogating persons
- Entering businesses
- Conducting searches
- Preventively seizing funds and economic resources of sanctioned individuals and entities if necessary
Counteracting Asset Concealment Risks
One of the key objectives of the ZfS is to counteract the risk of circumventing EU sanctions through asset concealment. To achieve this goal, EUDPs (EU-designated persons and entities) are under an obligation to disclose their assets subject to German jurisdiction to the ZfS.
Coordination with Other Authorities
While the ZfS has limited competencies compared to other authorities responsible for enforcing EU sanctions, its creation marks a significant shift towards more coordinated and centralized efforts to monitor and detect EU sanctions violations. The office’s role in improving the efficiency of EU sanctions is crucial, as effective enforcement can have a substantial impact on their overall effectiveness.
Future Developments
In addition to the ZfS, other authorities such as the German Federal Bank (Deutsche Bundesbank) and customs authorities will continue to play important roles in enforcing EU sanctions. The BAFA (Bundesamt für Ausrüstzung und Informationstechnologie) remains responsible for issuing licenses related to goods and technology-specific transactions.
The Financial Crime Prevention Act (Finanzkriminalitätsbekämpfungsgesetz or FKBG), set to take effect in 2024, will create the Federal Office to Combat Financial Crime (BBF). The BBF will integrate the ZfS into its structure and aim to create synergy between sanctions enforcement and anti-money laundering measures.
Conclusion
As Germany continues to strengthen its sanctions enforcement capabilities, it is clear that the country is committed to playing a significant role in the global efforts to combat financial crime and maintain economic security. The creation of the ZfS marks an important milestone in this effort, paving the way for more efficient and effective sanctions enforcement in Germany.