Allen & Overy LLP (JD Supra Germany)
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A new era of Securities Law has begun: Electronic Securities Act (eWpG) comes into force
On 6 May 2021, the German Bundestag adopted the Electronic Securities Act (eWpG) in the form proposed by the Finance Committee. Please see full Publication below for more information.
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Regulatory Monitoring - Relevant Developments Regarding German And European Regulatory Law (UPDATED)
Our monthly regulatory newsletter monitors all relevant developments regarding German and European regulatory law in English language. Please see full Publication below for more information.
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German Federal Supreme Court allows 15% lump sum damages clauses in private follow on damages actions
In a recent judgement, the German Federal Supreme Court indicated that lump sum damages clauses in private follow on damages actions of up 15% are permissible. The decision is a clear example of judicial activism, and plaintiffs will read this as a positive sign.
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Mixed picture: Germany clarifies its FDI regime in view of high-tech and further sensitive companies
On 1 May 2021, the latest amendment of the German Foreign Direct Investment (FDI) regime entered into force, following a decision of the German government as of 27 April 2021. Please see full Publication below for more information.
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SARS-CoV-2 Occupational Health and Safety Regulation: Mandatory testing offer
After weeks of tough wrangling, the Federal Cabinet has decided to oblige companies throughout Germany to offer coronavirus tests to their employees. This obligation will be included in the SARS-CoV-2 Occupational Health and Safety Regulation and will come into force this week. Employers must then offer to their employees a coronavirus test at least once a week, unless they work from home without
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Federal Constitutional Court overturns "Berlin rent cap"
The Federal Constitutional Court (decision of the Second Senate of 25 March 2021, Ref. 2 BvF 1/20, 2 BvL 4/20, 2 BvL 5/20) has ruled that the so-called “Berlin rent cap” is unconstitutional due to lack of legislative competence of the Federal State of Berlin and is therefore void. The decision has direct consequences for existing tenancy agreements. Please see full Publication below for more...
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Whistleblower protection in Germany to be expanded beyond EU law requirements
Companies in Germany should be aware of Germany’s looming implementation of the EU Whistleblowing Directive (Directive (EU) 2019/1937). The now available first working draft bill for a Whistleblower Protection Act (Hinweisgeberschutzgesetz) (“the Draft Bill”) goes beyond what the EU Whistleblowing Directive requires. In particular, the Draft Bill provides that the whistleblower protection regime...
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Higher Regional Court judgement: risk-sharing between landlord and tenant as a result of the pandemic-related closures
On 24 February 2021, the Higher Regional Court (Oberlandesgericht) of Dresden (judgment of 24 February 2021, case no. 5 U 1782/20) took a stand on risk-sharing between landlord and tenant as a result of the pandemic-related closures – this marks the first time a higher regional court has dealt with such a case.
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Second judgment by a German Higher Regional Court on rental payments during pandemic-related closures – adjustments only possible in exceptional cases
On the same day as the Higher Regional Court of Dresden (judgment of 24 February 2021, case no. 5 U 1782/20), the Higher Regional Court (Oberlandesgericht; OLG) of Karlsruhe (judgment of 24 February 2021, case no. 7 U 109/20) passed its judgment on the effects of official closures orders on the duty to pay rent incumbent on commercial tenants. In their decision, the judges in Karlsruhe arrived...
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Rights granted abroad – Will withholding tax still be due in Germany after all?
For months now the treatment of licence fee income generated in Germany under licence agreements concluded between foreign companies where the right granted is merely listed in a public register in Germany has been causing great uncertainty among companies. And there is no end in sight. While the Federal Ministry of Finance (Bundesfinanzministerium; BMF) abandoned the position adopted in its...
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Hydrogen Strategy – German Parliament Passes Law On Material Exemption From Electricity Surcharges
On 10 June of 2020, the German Federal Ministry of Economics and Energy released its National Hydrogen Strategy (Nationale Wasserstoffstrategie) (German Hydrogen Strategy) as a part of the Covid-19 actions to strengthen the economy. The German government sees this strategy as a central component of the on-going energy system transformation and stresses hydrogen to be a versatile energy carrier,...
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German lawmaker enacts the 2020 Annual Tax Act
After the German Bundestag (lower house of German legislature) has passed the 2020 Annual Tax Act (JStG 2020, in the version of the resolution recommendation of the Finance Committee of the German Bundestag) on 16 December 2020, the German Bundesrat (upper house of German legislature) also approved the bill in its last session of the year on 18 December 2020. The JStG 2020 considers amendments of
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Covid-19 Update: Act to further shorten the residual debt discharge procedure
The German Federal Parliament approved the government draft bill for an “Act to further shorten the residual debt discharge procedure” (Federal Parliamentary Doc. 19/21981, 19/22773) on 17 December 2020 in the version of the Legal and Consumer Protection Committee (the Committee, Federal Parliamentary Doc. 19/25251, 19/25322) in the Committee version (the Covid-19 Act) on the basis of the...
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Covid-19 Update: New Lockdown - Effects of the Federal-State Resolution of 13 December 2020 on the Commercial Rental Law
On 13 December 2020, the Federal Chancellor and the Prime Ministers of the Federal States again decided, in view of the current development of the Covid-19 pandemic, to impose far-reaching measures for contact restrictions. As it did already last spring, this comprises among other measures the closure of large segments of the retail business and of the services sector. The addressees of these...
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Rights granted abroad – Withholding tax due in Germany?
Draft bill published on 19 November 2020 offers hope that an unnecessary tax discussion may be brought to an end A German tax issue has been causing great uncertainty among international corporates since spring 2020: Are licence fees received under licence agreements concluded between foreign companies taxable in Germany if the right granted is listed in a public register in Germany, but no...
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The German StaRUG-Scheme: Act on the Stabilisation and Restructuring Framework for Businesses
A short bullet point summary of the new StaRUG-Scheme and a non-reliance translation of the draft bill for the StaRUG-Scheme from German into English based on the preliminary text of the new draft legislation. Please see full Publication below for more information.
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Covid-19 coronavirus: Temporary suspension of obligation to file for insolvency in Germany
COVID-19 and its impact - The Covid-19 pandemic ("Coronavirus") currently spreading in Germany has a massive financial impact in particular in the industrial and service sectors. Small-, mid- and even large-cap companies increasingly come under financial pressure due to the lasting crisis. Please see full article below for more information.
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Covid-19 Coronavirus and Foreign direct investment control
Foreign investors who consider to acquire German companies in the coming weeks or months should pay attention the following...
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Airline insolvencies in Germany: Questions and challenges for aircraft lessors
Airlines under pressure - The market for airlines is under extreme competitive pressure. We have seen some recent examples of European airlines that have gone into insolvency proceedings (Air Berlin, Condor, Germania, Monarch, Small Planet, Flybe). Airlines are struggling with volatile commodity markets and political instabilities (trade wars, protectionism). In addition, the Covid-19-Crisis (‘
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German antitrust authority restricts Facebook's processing of user data
On 7 February 2019 the German antitrust authority (Bundeskartellamt) found that the extent to which Facebook collects, merges, attributes to and uses data in user accounts amounts to an abuse of a dominant position on the market for social networks.
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German government lowers FDI screening threshold for certain industries
Introduction - In 2004, Germany enacted a regime empowering the German government to assess and prohibit the acquisition of German businesses active in the defence and encryption sector by Non-German investors. This regime, known as sector-specific review procedure, was broadened in 2009 to cover acquisitions of any German company irrespective of industry sector,
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Internal investigations documents seised in lawful law firm raid
The much publicised raid of U.S. law firm Jones Day’s Munich office and the seizure of documents relating to VW’s internal investigation by prosecutors in an investigation of Audi AG were legal, according to German courts. A constitutional complaint by the law firm, its client (VW) and individual German Jones Day lawyers has recently failed.
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A closer look: Germany - Landmark decision of the German Federal Constitutional Court on legal privilege in internal investigations
The concept of legal privilege between a lawyer and his client is not recognised in the same way under German law as it is in common law jurisdictions. In particular, the jurisprudence of the German courts has until now been unclear as to whether documents obtained at a law firm advising its client on an internal investigation are protected from the seizure by and scrutiny of public...
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Foreign direct investment screening: Germany is getting tougher with non-European investors
On 1st of August 2018, the German government issued the first ever (precautionary) order prohibiting the acquisition of a German business by a foreign investor – the Leifeld case.
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Doing Business in Germany - A legal guideline for foreign investors
Germany is one of the most resilient economies in Europe and therefore very interesting for international investors. In the last few years, many investors from various jurisdictions have invested in Germany and in German companies. We believe that in the next few years there will be favourable conditions at place that will result in further investments in Germany. Since Allen & Overy has...
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Risk disclosure obligations – new leverage for borrowers of structured loans
The disclosure obligations arising from an implied advisory agreement between a bank and a non-consumer borrower of a structured loan have been recently spelt out by the Federal Court of Justice (Bundesgerichtshof, BGH). The court granted damages to a German municipality against a bank for the breach of such implied advisory duties.
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The Wait Is Over – Implementing Cross-Border Corporate Transactions by Carve-Out before Final Merger Control Clearance
Overview - Cross-border corporate transactions often require merger clearance by several competition authorities before they can be implemented. If the parties are working to a tight schedule and the necessary approval in just one last jurisdiction is still pending, a carve-out of this jurisdiction may be an option in order to be able to implement the rest of the transaction. This article...
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Foreign investment control in Germany: Berlin Wall rebuilt or storm in a water glass? Germany’s new rules on foreign direct investment control in light of the new approach presented by European Commission President Juncker
Speed read - Just a few weeks after Germany amended its rules on foreign direct investment (FDI) control, European Commission President Juncker announced a legislative proposal for, and the European Commission published a draft regulation dealing with, the screening by EU Member States of foreign takeovers and investments.
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UPC ratification process in Germany put on hold following constitutional complaint
In March 2017, a constitutional complaint was filed against both the German bill for ratifying the UPC Agreement and the UPC Agreement itself with the German Federal Constitutional Court (“Bundesverfassungsgericht”). Many stakeholders have been speculating on the grounds for this constitutional complaint. Now, the German Federal Constitutional Court has disclosed the main line of argumentation
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Modernisation on all fronts: Today’s Adoption of 2017 Amendments to the German Act against Restraints of Competition
The most important changes and their practical impact - The EU antitrust damages directive (2014/104/EU) (the Damages Directive) should in fact have been transposed into national law by the end of 2016—however, the ninth amendment to the German Act against Restraints of Competition (GWB), correspondingly overdue, has only now been adopted. The new provisions, which are based on the Damages...