New government coalition intends high level of transparency about beneficial owners

• New government coalition plans even more transparency about beneficial owners
• Transparency obligations for non-profit organisations planned
• Transparency Register to be linked to other German registers

The new German coalition government made up of the Social Democrats (SPD), Alliance 90/the Greens and the Free Democrats (FDP) presented its coalition agreement on Wednesday, 24 November 2021, for the legislative period 2021 to 2025. Under the title “Daring to achieve more progress – Alliance for freedom, justice and sustainability”, the 178-page coalition agreement gives an overview of the planned programme of the government, styled as the “traffic light”-coalition (based on the parties’ signature colours of red, yellow and green). The coalition agreement intends more transparency in the economy in several places (in total, the agreement contains 32 findings of the keyword “transparency”), for example regarding emission control and sustainability, genetic engineering and grants to doctors.

Transparency obligations for non-profit organisations

In addition, non-profit organisations are to become more transparent and be required to disclose their intended purpose and use of funds, and under certain conditions their donation structure and finance. The precise nature of these transparency regulations is not clarified in the coalition agreement, however. The future development must be awaited.

Plans for the Transparency Register

With regard to the German Transparency Register (Transparenzregister), the coalition, as well as the German Bundesrat (as the upper house of German parliament), expressly support in an opinion dated 26 November 2021 the EU Commission’s plan to introduce an EU Anti-Money Laundering Regulation (see our article of 26 July 2021). The coalition agreement also envisages improving the quality of data in the Transparency Register so that in future the beneficial owners are identified in the Transparency Register in all prescribed cases.

To this end, the Transparency Register is to be linked to other German registers. In particular, a link is to be created between the Transparency Register and the digital land register (Grundbuch) to prevent the concealment of the real owners of properties and land.

Evolution into a general asset register

If the plans in the coalition agreement are put into practice, the Transparency Register would evolve towards a general asset register. Such a register would list not only corporate participations but, effectively, other assets like real property, as well.

A similar development was set in motion back in September 2021 at EU level when the EU Commission launched a feasibility study on a general asset register. According to the EU Commission such general asset register should list corporate participations and real property held by private individuals or associations as well as other assets such as securities, precious metals, cryptocurrencies and artworks, plus possibly foundations and trusts set up by private individuals.