Corporate Transparency in Germany: An Overview
Access to Beneficial Owners’ Information
As of January 1, 2020, government authorities and persons under the legal obligation to combat money laundering have access to beneficial owners’ information within their statutory tasks. Since then, members of the public also have access, but they must prove a legitimate interest in the inspection.
European Court Ruling
A European Court of Justice judgment on November 22, 2022, found that EU rules requiring information about beneficial owners of companies or other legal persons entered in transparency registers be accessible to all members of the public in all cases is invalid. This means that the legal situation under the 4th EU Money Laundering Directive applies again, which requires members of the public to prove a legitimate interest in the inspection.
Independent Administrator’s Role
The Independent Administrator determines for companies invited to report whether they have an entry in the Transparency Register and whether this entry is plausible based on the information available or to be obtained.
Audit Reports
As of April 2023, the Independent Administrator has reviewed all entries of participating companies in the transparency register. However, audits were still pending for some participating companies at the time of their inquiry.
Restrictions on Inspection
Where a beneficial owner has legitimate interests that require protection, the office operating the register can restrict inspection of the transparency register. Beneficial owners must support this with facts to substantiate why obtaining information from the register would put them at risk of becoming victims of certain crimes (e.g., blackmail).
Fees for Inspection
A fee of €1.65 is due for each document that is inspected. The fees charged depend on the respective register but are approximately the same as the fees incurred for inspecting the Transparency Register.
Access to Financial Authorities
From January 1, 2021, law enforcement authorities and the central unit for investigating financial transactions (Financial Intelligence Unit, FIU) have been given automated access to all data in the transparency register within the context of fulfilling their duties. This option will be extended to supervisory authorities, the Federal Central Tax Office, local tax authorities, and the Office for the Protection of the Constitution at federal and State level as a result of the Transparency Register and Financial Information Act.
European Networking
EU member states are working with the EU Commission to network European transparency registers pursuant to Article 30 ff. of the amending Directive to the 4th EU Money Laundering Directive (Directive [EU] 2018/843). The result will be access to the transparency registers of all member states via a shared European platform (“BORIS”).
Key Statistics
- In 2020, parties under the reporting obligation made a total of 8,858 discrepancy reports.
- By 2022, this number had increased to 34,287.
- As of April 2023, the Independent Administrator has reviewed all entries of participating companies in the transparency register.