The new German Lobbying Register Act – Blacklisting for more transparency?
On 1 January 2022, the German Act Introducing a Lobbying Register for the Representation of Special Interests vis-à vis the German Bundestag and the Federal Government (“Lobbying Register Act” – Lobbyregistergesetz) entered into force. It seeks to increase transparency regarding lobbyists’ influence on the government’s decision-making process in Berlin. Individuals and, in particular, legal entities involved in lobbying activities, will be faced with extensive registration and disclosure obligations. The implementation of the Lobbying Register will therefore impose new compliance challenges on impacted companies. Additionally, the Lobbying Register Act sets out harsh sanctions for any party violating conduct obligations or refusing to register certain (financial) information: hefty fines, “blacklisting” and restrictions on access to the German Bundestag are the legislator’s method of choice to foster transparency and integrity.
What are the objectives of the Lobby Register Act?
In public perception, the term "lobbying" has primarily been negatively associated with illegitimate attempts to influence politics. However, the representation of interests to the Government is one essential feature of democracy. Thus, the Lobbying Register is designed to strengthen public trust in politics and to ensure that lobbying is conducted within public supervision and control. It aims to promote transparency regarding lobbyists’ influence on the Government’s decision-making process.
What is lobbying?
Under the new law, representation of special interests (or lobbying) means any contact made for the purpose of directly or indirectly influencing the process of formulating aims or taking decisions conducted by the bodies, Members, parliamentary groups or groupings of the German Bundestag or by the Federal Government. The German legislator has deliberately chosen a broad definition of "representation of special interests." Thus, the way in which the contact is initiated is irrelevant. Moreover, not only is contact with Members of Parliament, the Chancellor and Ministers covered, but also contact with all bodies, members, parliamentary groups and groups of the German Bundestag, as well as with (Parliamentary) State Secretaries and (Sub-) Department Heads.
Who is a lobbyist?
Under the Lobbying Register Act, representatives of special interests are all natural or legal persons, partnerships or other organisations, including those in the form of networks, platforms or other forms of collective activities, which engage in the representation of special interests themselves or commission such representation on their behalf. As the law especially covers “commission of representation”, it should be noted that in the case of multiple delegation of tasks within a group of companies over several levels, all companies that expressly commission the representation of its interests by another group company are subject to registration. Thus, in practice, representation of interests occurs in the most diverse and everyday situations: any kind of organization or company with an office in Berlin, Germany’s capital (Hauptstadtbüro or “capital office”), a "public affairs" department, (industry) associations, NGOs or animal protection organizations, as well as political consultants or agencies, are affected.
What information must be registered, where and when?
Lobbyists must immediately register in the Lobby Register if the representation of interest (i) is carried out on a regular basis, (ii) is intended to be permanent, (iii) is carried out commercially for third parties or (iv) more than 50 separate contacts have been established within the past three months. According to the express intention of the legislator, these requirements can already be met when the company engages in lobbying activity for the first time.
Duty to register certain information
Natural persons must disclose their family name, maiden name, first name, date and place of birth, address and electronic contact details.
Legal entities must disclose the name, company name, legal form, composition of the management, personnel data of all legal representatives and other persons authorized to represent the entity and of the employees directly performing the representation of interests, as well as the number of members and memberships.
All lobbyists must additionally provide, amongst other information: (i) a description of their activities and their field of interest and projects, (ii) information on the identity of any clients for whom interest representation is carried out, (iii) the number of employees assigned with lobbying, (iv) data on the annual financial expenditure in the lobbying field, (v) donations, grants, subsidies and donations and (vi) the annual financial statements or statements of accounts, unless they are already subject to disclosure requirements under commercial law.
The Lobbying Register Act sets out an exhaustive list of organisations exempt from the registration requirement including, amongst others, trade and labour unions, employers’ associations and religious communities. Furthermore, individuals are exempt from the registration obligation if they are promoting exclusively personal interests or if they express concerns of an exclusively local character.
The Lobby Register is established and maintained electronically by the German Bundestag. It is available on the website https://www.bundestag.de/lobbyregister from 1 January 2022. Lobbyists must register without delay. For initial registrations, a transitional period applies until 28 February 2022. Entries made by then will be deemed to have been made without delay.
Actualization and monitoring
Generally, the registered information must be updated at least once a year. However, most changes to data subject to registration must be made as soon as possible. This entails extended monitoring and organizational obligations for companies.
What conduct obligations must be complied with?
Guidance on how lobbying should be conducted is set out in a Code of Conduct. It is available on the website of the Bundestag in German and English. By registering in the Lobby Register, lobbyists are automatically accepting this Code of Conduct. What penalties and enforcement methods are there? The Lobbying Register Act provides for three basic sanction measures:
- Harsh fines: If the registration is (i) not made, (ii) not made correctly, (iii) not made in good time or (iv) or not made completely, fines of up to EUR 20,000 may be imposed in the case of a negligent violation and up to EUR 50,000 in the case of an intentional violation.
- "Blacklisting" or "Naming & Shaming": Even if it is generally permissible to refuse disclosure of certain information, the refusal is noted on a separate "black" list. Furthermore, if a lobbyist has violated the Code of Conduct significantly, this is also published in the register. This "blacklisting" or "naming and shaming" should provide an incentive for compliance with the Code of Conduct and help foster transparency.
- Restrictions on access to the Bundestag: Refusal to provide information may also mean that participation in public hearings of the Committees of the German Bundestag is no longer permitted.
What should companies do now?
It is expected that the Lobbying Register Act will present many companies with new challenges in terms of compliance, requiring an expansion of existing compliance systems.
Companies, especially those that maintain a "public affairs" department, a “capital office" or similar, should use the remaining – short – time until the Lobbying Register Act enters into force and the transitional period expires to review their internal processes.
The specific internal measures to be taken will depend on the individual circumstances of each company. However, generally, the following steps will be appropriate:
- Regarding the initial review of a company’s duty to register, companies should conduct a review of their business model, their existing internal processes and the previous allocation of tasks in connection with lobbying.
- As a next step
- the training of all relevant "public affairs" employees should be carried out with regard to the implementation of legitimate, integrity-based lobbying activities in accordance with the Lobbying Register Act, and
- the initial entry in the Register should be prepared.
- Regarding the duty to review and update the registered information annually, companies should
- review the existing internal monitoring processes;
- consider training all relevant employees with regard to the annual review and update obligations of the registered information; and
- clearly assign the new tasks to its employees.