What will change with the Sanctions Enforcement Act (SanktDG)?

What will change with the Sanctions Enforcement Act (SanktDG)? For the effective operational enforcement of the sanctions, the expertise of various authorities and bodies at federal and state level and their cooperation is required for the respective sanction areas. The existing legal regulations have so far not been specifically geared towards enforcing sanctions and are therefore not sufficient for German authorities to be able to achieve this goal fully and effectively.

Therefore, a medium-term goal is to create a legal framework specially tailored to the enforcement of sanctions. The provisions provided for in this law serve to close regulatory gaps in the short term. They can be implemented quickly and without fundamental organizational changes and are to be understood as an anticipation of a later, more fundamental solution. The Sanctions Enforcement Act I leads to the following changes and new regulations:

✅ Possibility of determining assets and securing assets until the ownership situation is clarified

✅ Clarification of the responsibility of the state authorities for the application and enforcement of foreign trade regulations

✅ Extension of the data transmission powers of the authorities involved, e.g. Deutsche Bundesbank to the Federal Financial Supervisory Authority (BaFin)

✅ Clarification that broadcasting, transmission or distribution bans are also to be included under service bans

✅ Extension of the obligation to provide information under the Foreign Trade Act to include outsourcing companies

✅ Punitive reporting obligations of the sanctioned persons

✅ Extension of access to the transparency register and account inquiries at BaFin to sanction authorities (e.g. Customs Criminal Police Office, Bundesbank, Federal Office of Economics and Export Control (BAFA))

✅ Participation of the Central Office for Financial Transaction Investigations (FIU) in determining assets, supplementing the immediate measures of the FIU to prohibit transactions with possible sanctions as well as the operational analysis ex officio anchoring of a special statutory power of BaFin to order all measures to enforce trading bans in sanctions.

What will change with the Sanctions Enforcement Act (SanktDG)?

First of all, it is important for understanding the EU sanctions that the EU sanctions are directly applicable law in Germany when the respective EU legal acts come into force . This means that the freezing of assets, for example, takes effect immediately without the need for an additional official order.

Among other things, the EU sanctions stipulate that “funds” and “economic resources” of listed persons are frozen. According to European regulations, “freezing of economic resources” means preventing the use of economic resources for the acquisition of funds, goods or services.

The freezing leads to a so-called prohibition on disposal. A frozen item may no longer be sold, rented or encumbered or otherwise used as a source of income. This prohibition is aimed at the listed person/entity, but also at any other person, entity or government body dealing with the matter. In addition, a so-called provision ban also applies to listed persons and entities. This means that neither funds nor economic resources may be made available to listed persons.

Sanctions Enforcement Act (SanktDG): Foreign Trade Act regulates new reporting obligations

Without such cooperation, it is to be feared that compliance with the sanctions in this area will not be effectively ensured. The disclosure of all financial circumstances by the sanctioned person is a prerequisite for the effective implementation of EU sanctions aimed at individuals. Otherwise there would be a risk of the sanctions regime being circumvented by concealing the financial situation.

Sanctioned persons often have a wide range of assets that are held in complex corporate structures or other disguised ownership structures.

Section 18 (5b) regulates criminal liability for violations of the duty to report . The penalty is up to one year imprisonment or a fine . In contrast to the already standardized reporting obligations pursuant to Section 19 (5), a penalty is not considered sufficient because it does not offer a sufficient incentive to participate in the identification of funds or economic resources.

Sanctions Enforcement Act (SanktDG): Extended tasks for the FIU

The amendment to the Money Laundering Act makes it clear that the Central Office for Financial Transaction Investigations (FIU) is also entitled to participate in the determination of assets based on a directly applicable legal act of the European Union published in the Official Journal of the European Union, which implements a directive issued by the Council of the European Union in the area of Common foreign and security policy serves the purpose of economic sanctions.

This task, which goes beyond the statutory core task of combating money laundering and terrorist financing, serves to effectively enforce sanctions , since the suspicious activity reports and information received by the FIU may in principle contain indications of assets relevant to sanctions.

If the Central Office for Financial Transaction Investigations has indications that a transaction is related to money laundering or a criminal offense under Section 18 (1) of the Foreign Trade and Payments Act or serves to finance terrorism, it can prohibit the transaction from being carried out in order to investigate these indications and to analyze the transaction .

Sanctions Enforcement Act (SanktDG): Extended regulations for outsourcing controlling

According to this paragraph, the Federal Agency is authorized to publicly disclose administrative acts to foreign companies and persons, provided that no authorized person has been appointed for the purpose of disclosure in Germany. The provision represents a special legal authorization within the meaning of Section 41 (3) sentence 1 of the Administrative Procedures Act. The disclosure of rulings to a person or a company domiciled or based abroad is regularly associated with considerable delays or is completely impossible. In the interest of effective supervisory action, it is necessary to bring about the effectiveness of administrative acts by the supervisory authority as quickly as possible.

The announcement therefore takes effect immediately with the public announcement in the Federal Gazette or on the website of the Federal Agency.

This seminar Embargo and Sanctions: “Sanctions Enforcement Act (SanktDG)” might also interest you

Do you want a secure implementation and fulfillment of the  tightened compliance obligations  in practice? Then our seminar is just right for you! The seminar was developed by experienced experts who provide you with a roadmap for a successful implementation of compliance obligations. You will also receive valuable tips and tricks with which you can avoid difficulties during implementation. With the Embargoes and Sanctions seminar, you will receive a roadmap for the safe implementation and fulfillment of the stricter compliance obligations in practice:

✅ Examination of sanctions: You have to consider this

✅ Best practices for monitoring embargoes and sanctions

✅ Stricter requirements for country risk screening

The seminar Seminar embargoes and sanctions: Safely fulfilling compliance obligations book online. Convenient and easy with the online seminar form and product no. L18.

Target group for the Embargo and Sanctions seminar : “Sanction Enforcement Act (SanktDG)”

• Directors and executives at financial and non-financial companies,
• Money laundering officers, compliance officers and embargo/sanctions officers from financial and non-financial companies

Fulfillment of the tightened compliance obligations in practice

Your benefit  with the  Embargoes and Sanctions seminar

• Best practices for monitoring embargoes and sanctions
• Sanctions Enforcement Act (SanktDG) leads to new compliance obligations
• Stricter requirements for country risk screening

Your advantage with the seminar Embargo and sanctions: “Sanction Enforcement Act (SanktDG)”

Each participant receives the S+P Tool Box:

+ Organization handbook: Compliance with embargoes and sanctions
+ Control plan for transaction monitoring obligations
+ Update on Russia and Belarus sanctions

Program  for the seminar Examination of sanctions: you have to consider that

Best practices for monitoring embargoes and sanctions

• What are  financial sanctions  and  embargoes ?
  • Restrictions on the movement of  capital and payments
  • Country and Personal  Embargoes
  • Embargoes against specific countries and embargoes against individuals  ,  entities  or  organizations
  • Distinction between  three types of embargo : total embargo, partial embargo and arms embargo

• Correct handling of  sanctions list hits
  • Reporting requirements  for sanctions and embargoes
  • Frozen funds   must be reported to SZ FiSankt within one week
  • Observe the rules on  non- performance  and  old contract  clauses

•  Be sure to observe prohibitions  and  approval reservations
  • Export control law  creates a framework for international obligations
  • Restrictions on  Financial Sanctions  and  Embargoes
  • Prohibitions  or  reservations of approval  when granting loans, guarantees, letters of credit and sureties

• Compliance with financial sanctions and embargoes requires appropriate  controls  and  processes
  • Business organization, internal control system (ICS) and internal audit
  • Are  escalation levels  and  communication channels  described?
  • If there are special risks,  they  must be checked annually .
  • Criminal and fine  provisions of the AWG and AWV for non-compliance with sanctions and embargoes

Stricter requirements for country risk screening

• Stricter control obligations for  high-risk third countries
  • EU list  of high-risk countries
  • FATF List  of High-Risk Jurisdictions subject to a Call for Action
  • Appendix 4 of the  National Risk Analysis  with high-risk countries
  • Basel AML Index : Worldwide assessment of the risks of money laundering and terrorist financing (ML/TF)

• Requirements for IT-supported  monitoring and screening systems :
  • Ex post  and in  real time : selection and filtering of suspicious transactions
  • Use of procedures appropriate to the  business activities  and the  risk situation

• Blocking of  new listings  on embargo and sanctions lists
  • Accounts, custody accounts and assets must be  blocked  or  frozen immediately
  • Bans on disposal and provision  must also be observed in payment transactions

What can I expect from an S+P online training course?

You will learn what financial sanctions and embargoes are in the online training “Checking sanctions: What you need to know”. You will get an overview of the different types of embargoes and the reporting requirements for sanctions and embargoes. In addition, the rules on the prohibition of performance and the old contract clause are dealt with.

We offer you online training that will help you to meet the new control obligations in high-risk third countries. This training will help you to better understand the EU List of High-Risk Countries, the FATF List of High-Risk Jurisdictions, Annex 4 of the National Risk Analysis of High-Risk Countries and the Basel AML Index.