The transparency register: background and objectives

The transparency register stems from the implementation of the 4th EU Money Laundering Directive. The objective of the Money Laundering Directive and its national implementation in the Money Laundering Act (GwG) will be further advanced by the Transparency Register and Financial Information Act (TraFinG), which came into force on 01.08.2021. The aim of this is to create more transparency in order to curb money laundering and terrorist financing. There are also plans to network the European transparency registers, which required the amendment explained below. In addition, there should be clarity with regard to legal entities and their beneficial owners.

Changes in 2022

In 2017, when the directive came into force, the registration and associated transparency obligation did not apply to listed companies. These companies benefited from a general notification fiction, meaning that they were not subject to any new disclosure obligations with regard to the transparency register. The TraFinG transformed the transparency register into a full register, as a result of which the notification fictions no longer applied: Listed companies must now also identify their beneficial owners and positively notify the register. The transitional obligations for associations (in particular OHG and KG) end on 31.12.2022. For all others, these have already expired. The group of persons required to register has also been expanded: Now many foreign acquirers of German real estate must also provide information, as well as foreign trusts. In particular, share deals are now also included. Unlike before, the beneficial owners must always be submitted separately, even if they are already listed in other registers. Access to the register is made easier by an automatic access procedure.

Significance for practice

Anyone who has not made use of the transitional periods should do so as soon as possible. However, the fines are suspended until one year after the end of the transitional period. The changes are also significant for GbRs, which will be entered in the company register under the new MoPeG from 2024. As a result, they will also be obliged to register in the transparency register.

Options for action

Start-ups in particular should adhere to the strict deadlines of the TraFinG, as they are not covered by the transitional periods. Existing companies should have made an entry by no later than one year after the end of the transitional period applicable to them, otherwise they will have committed an administrative offense. The amount of the fine varies between 100,000 and 5 million euros. As the information in the transparency register must be updated in the event of changes within the company, constant monitoring is recommended. It also makes sense to implement this in your own code of conduct.

Date: 8. Nov 2022