Transparency register and registered associations – need for action?

As of October 2017, the Transparency Register was introduced, and with the turn of the year 2022/23, this will also have a practical relevance for registered associations (e.V.). Their beneficial owners – typically the management board – must be recorded in the transparency register (at the latest) from January 1, 2023.

It is true that the legislator wanted to minimize the workload for associations with an automatic data transfer from the register of associations (Section 20a GwG). What is intended as a work relief for the honorary office and as a reduction of the bureaucratic burden can, however, lead to a fine risk for the e.V. in a large number of cases.

At first glance, there is no need for action: The registering body creates an entry in the transparency register for the registered association without the need for the association’s involvement.

In order to create the automated entries, the register-keeping authority regularly makes assumptions. The data entered on this basis (including the assumptions made) are again valid in accordance with the German Commercial Code (HGB). § 20a para. 1 sentence 4 GwG as information of the association.

The association or the board of directors is then liable for the correctness of the data – because: If these assumptions do not apply or if errors are not corrected by the e.V., a violation of the notification obligation pursuant to § 56 para. 1 S. 1 No. 55 lit. d GwG, which is punishable by a fine.

What entry does the registering authority make and what assumptions does it make?

In the case of automatic registration, all members of the board of directors of an association are recorded as fictitious beneficial owners in the transparency register (Section 20a (1) sentence 2 GwG). The data for this is taken from the register of associations. Special features, such as special rights of a member or member of the Board of Management, which result in an actual economic entitlement, are not taken into account.

If it is not clear from the register of associations in which country the respective member of the Executive Board is domiciled, Germany is always entered in the transparency register as the country of domicile.

In addition, German citizenship is automatically assumed to be the sole citizenship of the members of the Executive Board (Section 20a (1) sentence 3 GwG).

There is a need for action by the e.V. in the following cases:

• If there are actual beneficial owners (e.g. in the case of voting rights of a member of more than 25 percent, special rights, etc.), the registration of the board members as fictitious beneficial owners is incorrect and therefore a notification to the transparency register of the e.V. is required.
• If a change in the board of directors was not immediately notified for entry in the register of associations and the data on the board of directors is therefore not up to date, a notification of the e.V. to the transparency register is required.
• If the principal residence of a member of the Board of Management is abroad, notification must be arranged.
• If a member of the Board of Management has a foreign nationality or another nationality in addition to German, notification must be made.

Background

With the introduction of a transparency register as of October 2017, in principle also e.V. had to report their beneficial owner to the newly created register. The initial facilitation of the availability of the relevant data in the register of associations (so-called notification fiction) will cease to apply with the conversion of the transparency register to a so-called full register on December 31, 2022. In addition, concessionary (economic) associations are also affected by this.

As a facilitation, the legislator has provided for automatic data transfer from the Transparency Register (as shown above). Automatic registration shall take place for the first time no later than January 1, 2023.

To ”strengthen volunteerism and reduce the bureaucratic burden,” the law provides relief for registered associations. (BT-Drs. 19/30443, p. 67). Pursuant to Section 20a of the German Money Laundering Act (GwG), the office keeping the register creates an entry for registered associations on the basis of the data entered in the register of associations without requiring the association’s cooperation. After January 1, 2023, automatic registration will occur on an event-driven basis. This means that after the initial entry, the entity keeping the register must continuously update the transparency register by adopting the changes resulting from the register of associations. If an association reports changes to its board of directors to the register of associations without delay, the office keeping the register automatically transfers these reports to the transparency register. In this case, a separate notification of the information on the association directors to the Transparency Register is not required, subject to Section 20a para. 2 p. 1 not required. ( Reuter, in: BeckOK-GwG § 20a Rn. 22).

If the registered association fails to notify the register of associations, this will result in an automatic incorrect transfer to the transparency register, which can be attributed to the association. If the transparency register is inaccurate for this reason, there is a threat pursuant to Section 56 para. 1 S. 1 No. 55 lit. d GwG a fine.

Request exemption from the fees of the Transparency Register

The automatic registration of associations in the transparency register does not mean that no annual fees are charged for keeping the transparency register pursuant to Section 24 AMLA. Also the non-profit status has no influence on the obligation to pay fees. However, non-profit associations that have a corresponding certificate from the tax office can be exempted from this fee if they apply for this at the office keeping the register. (BVA, FAQ, as of May 25, 2022, page 30 f.).

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