GERMANY Law and Practice Contributed by: Bettina Mertgen, Felix Siebler, Michael Herold and Sebastian Faust, GvW Graf von Westphalen
4. Compliance, Sanctions and Embargoes 4.1 Sanctions Legislation and Regulatory Framework As an EU member state, Germany primarily imple - ments sanctions through directly applicable EU reg - ulations adopted under the Common Foreign and Security Policy. These measures are supplemented by the Foreign Trade and Payments Act and the For - eign Trade and Payments Ordinance, which provide the national framework for enforcement and penalties. Germany also implements sanctions adopted by the UN through EU legislation. US sanctions, including those administered by the Office of Foreign Assets Control, do not generally have direct legal effect in Germany but may create significant commercial and compliance risks for Ger - man companies with a US nexus. The Federal Office for Economic Affairs and Export Control, customs authorities, the Federal Bank of Ger - many (Deutsche Bundesbank) and criminal enforce - ment authorities all play important roles in sanctions administration and enforcement. 4.2 Arms Embargoes Germany implements arms embargoes adopted by the UN and the EU. These measures are typically incorporated into EU sanctions regulations and are directly applicable in Germany. A national arms embargo is also set out in Section 74 of the Foreign Trade and Payments Ordinance. Arms embargoes generally prohibit the sale, export, transfer or brokering of military goods and related services involving designated countries, entities or persons. Certain exceptions may be available in lim - ited circumstances, including humanitarian activi - ties, international missions or other cases expressly authorised under the relevant sanctions regime.
flags and complying with licence conditions through - out the transaction. 3.7 Brokering and Intermediary Activities Brokering activities involving certain military and dual- use items are subject to control under both the Foreign Trade and Payments Act/Foreign Trade and Payments Ordinance and the EU Dual-Use Regulation. Licensing requirements may apply even where the goods do not physically enter Germany. The scope of control generally covers arranging or facilitating transactions between third countries involving controlled items. Whether authorisation is required depends on the type of goods, the parties involved and the destination. 3.8 Intra-Company and Intra-Group Transfers Germany does not provide a general exemption for intra-group transfers. Transfers of controlled goods, software or technology within a corporate group must be assessed under the same export control rules as those applicable to third-party transactions. Certain simplifications may be available through gen - eral or global licences, particularly within the EU. However, transfers of controlled technology to affili - ated entities outside Germany frequently require a separate licensing assessment. 3.9 Enforcement, Penalties and Voluntary Disclosure Violations of German export control laws may result in significant criminal and administrative penalties. Seri - ous infringements can lead to substantial fines and imprisonment, particularly in cases involving inten - tional conduct or exports to embargoed destinations. The Federal Office for Economic Affairs and Export Control, customs authorities and public prosecutors play key roles in enforcement. Although German law does not provide a formal vol - untary disclosure programme equivalent to certain US regimes, voluntary self-disclosures and co-operation with authorities may be taken into account in certain cases.
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