A task force to enforce sanctions is working under the auspices of the finance and economics ministries.
(Photo: dpa)
Berlin Finance Minister Christian Lindner (FDP) and Economics Minister Robert Habeck (Greens) have agreed on a draft law intended to better enforce the sanctions imposed on Russia. The two ministries submitted the draft to the internal government vote. It is to be decided by the cabinet on Monday.
A central point of the so-called Sanctions Enforcement Act: According to government circles, a duty to report, subject to a penalty and a fine, will be introduced for sanctioned persons. In the future, oligarchs would have to disclose their assets, such as real estate or luxury yachts, to the German authorities. If they don’t, they face fines or penalties.
In the past few months there have been repeated cases in which there were doubts about ownership, for example of a yacht that was in the port of Hamburg. “Oligarchs rarely appear with real names,” it was said in government circles. There are complicated corporate structures for concealment that are reminiscent of organized crime.
“We need mechanisms to identify assets in the first place,” said government circles. Among other things, the new obligation to notify should help. Assets must then be disclosed to the Federal Office of Economics and Export Control.
Top-Jobs des Tages
Find the best jobs now and
be notified by email.
If sanctioned oligarchs do not comply, fines and penalties are threatened. This would in turn allow the authorities to confiscate and dispose of the relevant assets. Initially, the assets of sanctioned individuals are only frozen. In this respect, the obligation to notify can also be a lever to actually get hold of the assets.
>> Read also: Gaps in the system – Why the sanctions against the oligarchs are not effective enough
To check who actually owns the assets and whether an oligarch has disclosed everything, the bill provides a number of new powers. The data exchange between bodies such as the Bundesbank, the financial supervisory authority Bafin or the anti-money laundering unit FIU is to be improved.
Securing assets as long as ownership is unclear
In addition, authorities such as the Federal Office of Economics and Export Control (BAFA) or the Customs Criminal Police Office and state authorities that enforce sanctions should also have access to the so-called transparency register. There, through an international exchange of data, it is recorded, among other things, who is behind trustee accounts as the actual economic beneficiary. Account inquiries at the Bafin should also be made possible.
According to information from government circles, the law should also serve to secure assets as long as ownership is unclear. This is to prevent a yacht from leaving port or a private jet taking off while the authorities are still checking whether they are attributable to a sanctioned person. These “security options” should be created by the law, it said.
The EU has been sanctioning Russia since 2014 after the annexation of Crimea. In the course of the extensive new sanctions packages, however, problems with implementation arose in many places. This applies both to the sanctions against individuals, which are primarily aimed at the Russian oligarchs, and to the bans on trade in goods.
In the case of goods sanctions, there is clarity primarily due to vague legal terms. For example, companies are still allowed to deliver humanitarian aid to Russia. This includes medical devices. However, it is not always clear to what extent this also applies to components such as these. Another example is the prohibited supply of luxury goods, where it is sometimes not clear how the value threshold is determined.
In mid-March, the federal government set up a task force to enforce sanctions, which works under the leadership of the finance and economics ministries. She has not only helped with acute decisions on sanctions, but also identified gaps in the law and the need for regulation in the past few weeks.
A part is now to be clarified by the Sanctions Enforcement Act, which is to be passed by the cabinet next week and, if possible, decided before the summer break in the Bundestag.
Second Sanctions Enforcement Act is planned
At the same time, however, the finance and economics ministries have come to the conclusion that there is still a further “need for structural change”. A second sanctions enforcement law is planned for this purpose.
This law, which is intended to have a medium-term effect, should, among other things, provide for a register for assets of unclear origin, according to government circles. In addition, responsibilities should be streamlined and a central coordination office created to enforce sanctions. However, detailed questions are still open here, which is why work on the law will take some time.
More: “We don’t know how to survive” – How Russia’s rich fear for their fortunes