Status: 06.05.2022 1:45 p.m
The sanctions imposed against Russian oligarchs because of the Ukraine war have often been difficult to enforce. A new law aims to change that. It could also help in the fight against organized crime.
The federal government plans to improve the enforcement of sanctions with a legislative package. In doing so, it is reacting to problems that became apparent in the implementation of the EU’s sanctions packages as a result of the Russian attack on Ukraine. The Bundestag is to vote on two legislative packages.
Part one is already being coordinated between the federal ministries. The cabinet should agree by Monday, after which the Bundestag will discuss the project. Government circles say: The aim is for the law to be passed before the summer break, which begins in July. Part two will follow later this year.
Enforcement weaknesses
This concept was developed by the Sanctions Task Force, which is headed by the Federal Ministry of Economics and Finance. The task force was set up in mid-March after it became clear that there were problems implementing the sanctions.
Since then, its task has been to coordinate the work of the numerous federal and state authorities involved, to clarify responsibilities and to help with questions. At the same time, the task force has identified weaknesses that are now to be remedied with the Sanctions Enforcement Act.
In government circles there is a lot of talk about low-hanging and high-hanging fruits. The low-hanging fruits are measures that can be implemented quickly and would immediately ease the work of authorities in tracing assets. These regulations can be found in part one of the law.
More complicated to implement, but also more effective, are the high-hanging fruits. This involves structural changes, such as how sanctions are implemented in Germany and assets tracked down. According to information from the ARD Capital Studios from government circles, these should also – to stay in the picture – be harvested.
Oligarchs should have to disclose assets
The planned measures are far-reaching. Part one of the Sanctions Enforcement Act provides for a regulation obliging sanctioned persons to report their assets. This means that a Russian oligarch who has been sanctioned, for example, would then have to disclose what real estate he owns in Germany and whether he owns a yacht or an airplane.
This obligation to report should be subject to penalties and fines. If a sanctioned person violates this, assets could even be confiscated and realised, according to government circles. This goes far beyond the previous instrument of “freezing”. A frozen property, for example, may continue to be used privately, but sale or rental is prohibited.
In addition, authorities should be given the opportunity to secure assets until the ownership situation has been clarified. For example, aircraft could be prevented from taking off if there is a suspicion that the owner is a sanctioned person.
In addition, the authorities responsible for sanctions should have access to more account data and information from the transparency register. The exchange of data between the Bundesbank and the banking supervisory authority is also to be made easier.
Significant need for structural change
For the second part, which is to be worked out in the course of the year, there are only key points so far. According to government circles, there is a clear need for structural change. Responsibilities are to be streamlined and a central coordination office set up. A special whistleblower office is also planned. In addition, a national register for assets of unclear origin is to be created.
An independent administrative procedure should enable the authorities to investigate assets of unclear origin. According to government circles, these instruments should also help in the fight against tax evasion, money laundering and organized crime.
Complicated structures and shell companies
The implementation of the sanctions made it clear once again that large assets are often hidden behind complicated corporate structures and shell companies. The constructions in the area of concealing assets and circumventing sanctions are comparable to those used in money laundering and organized crime.
For authorities, it is often only possible with great effort to identify the real owners of an asset. Again and again they even fail completely.
However, this finding is not new. Journalists have repeatedly reported on this in recent years with research projects such as the Panama Papers, the Paradise Papers or the Pandora Papers. In the course of the Russia sanctions, things are apparently moving again. But these are still only plans: The Bundestag is to discuss part one of the Sanctions Enforcement Act for the first time next week. Part two is in the works.
Eleven planes are not allowed to take off
According to the Federal Ministry of Finance, 137.9 million euros were frozen until April 29 as part of the sanctions against Russia. In Hamburg, the super yacht “Dilbar” was legally arrested.
At the request of ARD Capital Studios The Federal Ministry of Transport also announced that eleven aircraft were included in the sanctions and were not given permission to take off. These are three Antonov freighters in Leipzig, four private jets in Baden-Baden, a Boeing 747 in Frankfurt-Hahn, an Airbus A320 in Munich, a Boeing 737 and a Bombardier Challenger 300 in Cologne.