Transition periods for registration with the Transparency Register are expiring

Although the Transparency Register was established just over five years ago, as of October 1, 2017, it remains largely unknown to business owners or is simply ignored. This neglect of the Transparency Register can be attributed primarily to the fact that many companies were exempt from the registration requirement due to the presumption of notification (Section 20 of the Money Laundering Act [GWG], old version).

However, this fiction has come to an end as of August 1, 2021, meaning that the registration requirement applies without exception to all companies entered in a registry, registered associations and foundations, trusts, and similar legal structures (hereinafter “legal entity”).

If a legal entity fails to comply with its registration requirement or if the registration is incorrect, it faces a fine. A violation of the registration requirement constitutes an administrative offense. Fines can range up to 150,000 euros for minor violations and up to 1.0 million euros for systematic, serious, or repeated violations.

To implement the legislative amendment, the legislature has granted transitional periods of varying lengths for companies that benefited from the deemed notification until July 31, 2021, to retroactively complete their registration in the transparency register. Until the end of the respective transition period, the provisions regarding fines have been or are suspended only for these companies.

The transition periods are currently set for

• stock corporations, SEs, and KGaAs until March 31, 2023,

• GmbHs, cooperatives, European cooperatives,

partnerships until June 30, 2023, and

• all other legal forms (such as KG, OHG) until December 31, 2023.

All other legal entities are subject to the penalty provisions and should already be correctly entered in the transparency register. With the expiration of the first transition period on March 31, 2023, it is also expected that the Federal Administrative Office will conduct a systematic review of the accuracy and completeness of the transparency register. Therefore, business owners and companies should have their entries verified now to ensure they are listed in the Transparency Register and that the information provided is accurate.

Date: 24. Feb 2023