Germany: Transparency mandatory for all companies with public affairs department - Approaching deadline of German Lobbying Act

In brief

As of 1 January 2022, Germany has set up a mandatory public lobbying register. Its broad scope covers – similar to the EU transparency register - every entity which regularly communicates with the German federal executive or legislative to represent and further its interests. As a result, every company with a public affairs department may fall under its scope. Such companies will need to complete their initial registration by 28 February 2022. With this important deadline approaching, it is necessary for each company to assess whether a registration under the LobbyRG is necessary and if so, which steps need to be taken and which internal information must be compiled to successfully register in the lobby register.


Contents

Key takeaways

The German Lobbying Act (Lobbyregistergesetz, "LobbyRG") has entered into force on 1 January 2022. The Act responds to several cases of side activities and side income of politicians, which have been received critically by the public.

Who needs to register?

  • The LobbyRG applies to all natural or legal persons which engage in, or task others to engage in on their behalf, in "representation of interests". The term "representation of interests" is broadly defined. It includes any communication towards the federal German government (Bundesregierung) as well as towards bodies, members and groups of the German Bundestag. The objective of such communication must be to directly or indirectly influence the respective decision-making processes (Sec. 1 LobbyRG). The broad scope of the LobbyRG is thereby not limited to lobbying in the narrow sense, but similar to the wide scope of the EU transparency register.

  • Registration in the lobby register is required under the LobbyRG if a company engages in the  "representation of interests" regularly, and not just occasionally, or has begun with such communication and intends to do so regularly going forward (Sec. 2 para 1 no. 1, 2 LobbyRG). According to the (not legally binding) Bundestag handbook on the lobby register, three contacts per year may already qualify as "regularly". In practice, companies with a public affairs department or function are likely to meet this requirement, unless they fall under the statutory exceptions.

  • The LobbyRG (Sec. 2 para 2, 3 LobbyRG) contains certain exceptions from the general registration requirement, e.g. contacts in connection with public hearings or public events and contacts upon express and specific request by Bundestag or Bundesregierung to provide information, data or expertise.

How to register?

  • In case a registration in the lobby register is required, a company can register under the following website:

https://www.lobbyregister.bundestag.de/startseite

For the registration, the information to be provided is not limited to key data regarding the company and its managing directors. It also includes the number of employees engaged in representation of interests, the annual expenses for representation of interests, as well as the received government grants and subsidies and third party gifts. Compiling this financial information is likely to create significant organizational effort. The Act allows companies for forego this financial disclosure, but such non-disclosure will be highlighted in the lobby register and will also be displayed in a separate public list  ("naming and shaming").

  • The deadline for the initial registration is 28 February 2022 (Sec. 8 LobbyG). From then onwards, each company has to register "immediately" once it falls under the scope of the LobbyG (Sec. 2 para 1 LobbyG). The registration data needs to be updated at least annually (Sec. 3 para 3 LobbyG).

What else?

  • Besides the registration requirements, the LobbyG also establishes "standards of integer representation of interests". According to Sec. 5 LobbyG, the representation of interests must be conducted transparently, honestly and with integrity. Upon the initial contact, the registration in the lobby register must be disclosed to the Bundestag or Bundesregierung counterpart (and it must be disclosed if financial information is not provided to the register, i.e. "self-shaming" before the official counterpart). Further details are provided in the code of conduct for representatives of interests under the LobbyG ("Verhaltenskodex für Interessenvertreterinnen und Interessenvertreter im Rahmen des Lobbyregistergesetzes"), by which each registered person or company must abide.

  • Non-compliance with the LobbyRG can be fined with up to 50,000 EUR (Sec. 7 LobbyRG) and can also lead to a rescission of access privileges to the Bundestag (if any, Sec. 6 LobbyRG). Also, a failure to register can lead to a reputational damage of the respective company due to a supposed lack of transparency.

What's next?

In conclusion, many companies will likely fall under the scope of the LobbyG and therefore will have to register in the lobby register by end of February 2022. In fact, several large companies have already done so. Any company should therefore assess their business, public affairs activities and government outreach efforts with respect to a potential representation of interests in the sense of the LobbyG. In case of regular communication with the German federal government or any other interaction that may influence the government's decision-making, a registration in the lobby register should strongly be considered. Until the end of the February deadline, registration data should be prepared and general market response to the LobbyRG should be monitored.

For further information and to discuss future developments, feel free to contact us at any time.


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