Jones Day (JD Supra Germany)

The 17th amendment to the German Foreign Trade and Payment Ordinance ("AWV") adopted by the federal government on April 27, 2021, included—compared to the original draft—a number of changes relevant to M&A transactions with a nexus to Germany. A draft 17th amendment to the AWV was published in late January 2021. While the 17th amendment as adopted is generally in line with this draft, there...

German financial institutions may need to consider a risk framework for monitoring their customers' compliance with social and environmental standards. The German Federal Government recently proposed a draft act on corporate due diligence to prevent human rights violations in supply chains ("CDDA"). While most provisions of the CDDA are tailored to scenarios in which a company procures goods...

The Development: The Bundestag, the German legislature, amended Germany's antitrust laws to include special competition rules for digital platform "companies with overwhelming importance for competition across multiple markets." The amendments, known as the GWB Digitization Act or ARC Amendments, also substantially raise Germany's merger control filing thresholds. The Background: In recent...

The Situation: The right of German works councils to co-determine matters relating to employee health and safety takes on added significance during the COVID-19 pandemic. The Result: The works council's right of co-determination is triggered when an employer must implement health and safety protections in accordance with legislation or public safety regulations, but retains discretion in how...

The Situation: The requirement for a paper-based note for issuing securities under the German law has been an obstacle for the use of security tokens in Germany. With the release of a draft bill (the "Bill") permitting the issuance of electronic bearer bonds under German law, Germany is paving the way for digitalizing its financial markets. The Result: The Bill now proposes to remove the global...

On May 20, 2020, the German Federal government adopted the 15th amendment to the Foreign Trade and Payments Ordinance (AWV). The changes to the AWV will be effective shortly, after publication in the Federal Gazette. Prompted by the COVID-19 pandemic, the amendment expands the scope of investment review particularly in the healthcare sector...

The coronavirus (COVID-19) pandemic is a challenge for employers and employees. Companies must protect their employees' health and at the same time try to keep the business running. Not all companies can organize home-office work, and many simply have to shut down for some time. As we are starting the return-to-work phase, employers have to establish new health and safety protocols for the...

As the new year begins, it is a good time to look at key developments in German labor and employment law in 2019 and look ahead in 2020. With respect to 2019, corporate legal and human resources departments should be aware of new court rulings addressing fixed-term employment contracts, working time recording, the notorious two-week deadline for instant dismissals, and enhanced flexibility in...

Over the past few years, Germany has strengthened the AWV regime. In parallel, the relevance of Germany's foreign direct investment control investigations for M&A transactions involving non-EU investors has grown. Even investments in German targets by, say, U.S. investors have been investigated. While the new strategy paper is still a nonbinding policy document, it clearly demonstrates the...

The Situation: On August 22, 2019, the German Ministry of Justice and Consumer Protection presented the draft Corporate Sanctions Act ("CSA"), a bill that would establish corporate criminal liability in Germany. The Result: The Bundestag (the parliament of Germany) is expected to adopt the CSA, which would authorize the criminal prosecution of a company under certain circumstances, during its...

Money laundering risks in the real estate sector have moved increasingly into focus in recent years. The German Government is about to implement stricter anti-money laundering rules following the enactment of the Fourth Money Laundering Directive in 2015 ("AML Rules"). The draft legislation in particular includes extended risk assessment and reporting requirements for real estate agents ("Agents")

The Situation: The G20, a forum for governments and central bank governors from 19 countries and the European Union, had made the decision to combat money laundering and terrorism financing activities tied to the use of cryptoassets. The Action: The German Federal Ministry of Finance has published guidance on its Draft Act implementing the 5th EU Anti-Money Laundering Directive ("AMLD5").

The Situation: Under the German real estate transfer tax ("RETT") law, RETT is not only triggered on the direct acquisition of German properties, but also in case of share deals involving companies with German properties, if certain acquisition or investment thresholds are exceeded. The RETT rules are expected to be tightened significantly for share deals as of January 1, 2020. The Result: If...

The Situation: The German Federal Labor Court had to decide on the question whether a seemingly fixed-term employment is actually an indefinite employment. Prior to the latest hire, the same employee was already employed for a term of one and a half years until about eight years ago. The Result: The Federal Labor Court held that in the circumstances at hand the employment is deemed to be...

The German government lowered the threshold for acquisitions of German companies by non-EU and non-European Free Trade Association ("EFTA") acquirers. Germany has expanded its powers to block takeovers of German companies by non-EU investors by lowering the applicable thresholds and expanding the definition of critical infrastructure under the German Foreign Trade and Payments Ordinance ("AWV")

The Situation: Claims brought by insolvency administrators under Section 64 of the German Limited Liability Companies Act are not only among the most common, but also the most financially significant, claims faced by the directors of distressed German companies. The Development: In a landmark decision, the Higher Regional Court of Düsseldorf recently determined that claims brought under...

The Court Decision: On September 25, 2018, the Higher Regional Court of Berlin held that bitcoins would not qualify as financial instruments for the purposes of the German Banking Act (Kreditwesengesetz, "KWG"), thus dismissing the licensing requirement for bitcoin-related investment activities in Germany. The German Regulator's View: The decision is in contrast to the position of the German...

Some employers like the concept that employees must repay a bonus if the employee is no longer employed as of a certain date. This may be permissible in Germany, but only under narrow circumstances. On June 27, 2018, the Federal Labor Court (Bundesarbeitsgericht or "BAG") decided on a case in which a bonus provision provided for a bonus payment no later than December 1 but also repayment if...

The German Federal Labor Court (Bundesarbeitsgericht) ("BAG") held, on August 14, 2018, that it is permissible for an employer to promise employees a premium if they refuse to participate in a strike. The plaintiff in this case was an employee who participated in a union strike and then sued the employer for payment of a strikebreaker premium. The employee claimed to be entitled to the premium

The Situation: Germany prevented State Grid Corporation of China ("SGCC") from acquiring a 20 percent minority stake in 50Hertz, one of Germany's four providers of high-voltage transmission systems, as well as the acquisition of a German specialist in high-strength metal forming by a French/Chinese consortium. The Reason: Both transactions were prevented based on concerns of risk to public...

The Situation: The German Parliament has approved the Act on Model Declaratory Proceedings ("Act"), which introduces, for the first time, class action-style litigation for consumer claims. The Plan: The Act will give qualified institutions the right to raise claims on behalf of groups of consumers in order to obtain a declaratory judgment...

The Situation: As agreed in the Coalition Contract of the current German government, the Federal Ministry of Justice officially presented the Act on Model Declaratory Proceedings ("Draft Act") on May 9, 2018, after protracted last-minute negotiations within the government. The Plan: The Draft Act, if ratified, would give qualified institutions the right to raise claims on behalf of groups of...

The Situation: Due to strict investment rules governing German open-ended real estate funds, questions remained regarding whether those funds could indirectly invest in non-German real estate, via structures or vehicles qualifying as real estate funds. The Development: Based on an interpretive decision by the German Federal Financial Services Authority, German real estate funds, provided they...

The Situation: German law does not provide a means of collective redress for consumer claims. Attempts to introduce a corresponding act in the previous legislative term were made; however, no political agreement was reached on the draft act. The Plan: In 2018, Germany plans to introduce a proceeding for model claims, giving groups of consumers the right to combine their claims and sue as one....

The Situation: Market-dominant and powerful companies in Germany are subject to a number of rules that are significantly broader and stricter than the European Union's, Article 102 AEUV, which prohibits the abuse of a dominant position. The Development: A recent decision by the German Supreme Court provides guidance on a previously rarely applied prohibition on demanding unjustified benefits...

The Situation: A decision by the German Federal Court of Justice has made null and void written form defect-curing clauses in lease agreements. The Result: It is likely that more tenants and landlords will attempt to terminate lease agreements prematurely based on an alleged written form defect.

On 25 June 2017, the new German Money Laundering Act came into force, which primarily implements the 4th European Anti-Money-Laundering Directive (EU 2015/849) into German law. Among others, the Act establishes a new "Transparency Register", where the (ultimate) beneficial owners of corporate and other legal entities incorporated within Germany will be registered.

The Background: As part of the implementation of the European Anti-Money Laundering Directive (EU Directive 2015/849), a new German Money Laundering Act has come into effect.

On July 18, 2017, the German government enacted changes to the Foreign Trade and Payments Ordinance ("AWV") that significantly expand the scope of the law....

On July 11, 2017, the German Federal Constitutional Court in essence rejected actions by certain smaller trade unions against a "tariff unity" law introduced almost exactly two years before. This is a major setback for trade unions representing small but important key personnel within companies, such as pilots, air traffic controllers, train drivers, and employed physicians. The practical impact...