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A Q&A guide to international trade in goods and services in Germany.This Q&A covers key matters relating to the regulation of international trade in Germany, including recent trends, trade agreements, trade negotiations, rules relating to the supply of services, imports and exports requirements, trade remedies, and international trade restrictions.To compare answers across multiple jurisdictions, visit the international trade in goods and services Country Q&A tool.This Q&A is part of the International Trade and Commercial Transactions Global Guide.
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1. What are the recent trends affecting the regulation of international trade in your jurisdiction?According to forecasts, Germany’s economy is expected to grow further in the near future. Growth is supported by Germany’s leading export position.On 1 February 2020, the UK withdrew from the EU. In the following transition period the UK will no longer be represented in the European institutions and will therefore no longer participate in the European legislative process. Nevertheless, the rights and obligations of EU law will continue to apply in the UK during the transition period.Brexit is expected to affect international trade as follows:
- The UK and the EU will trade as third parties.
- There will likely be significant increases in customs declarations and origin declaration requirements (provided that the UK and the EU can successfully agree on a free trade agreement (FTA) in time), as well as delays at borders.
- Even as EU law continues to apply in the UK during the ongoing negotiation period and the transition period, uncertainty for market participants continues until the terms of the UK’s withdrawal are finalised and ratified.
- The UK and the EU will aim to continue certain existing agreements and to put new bilateral agreements in place.
- The UK and the EU will need to agree on the apportionment of EU quotas with other members of the World Trade Organization, which may well raise objections (for example, if they suffer loss as a result of quota apportionment).
As an EU member state, Germany does not have an independent trade policy.The EU is a party to a number of bilateral and multilateral preferential agreements, including:
- The European Economic Area Agreement.
- Economic Partnership Agreements (EPAs) with Africa, Caribbean, Pacific (ACP) countries.
- Trade agreements with Central and Eastern European countries.
- Trade agreements with Western Balkan countries.
- Trade agreements with Mediterranean countries.
- Trade agreements with Overseas Countries and Territories (OCT).
- The EU-South Korea FTA.
- The EU-South Africa EPA.
- The EU-Mexico FTA.
- The EU-Chile FTA.
- The EU-Japan Economic Partnership Agreement.
- The EU-Vietnam Trade Agreement and EU-Vietnam Investment Protection Agreement.
- The EU-Singapore FTA and EU-Singapore Investment Protection Agreement.
- The EU-Mercosur Trade Agreement.
The EU has been negotiating further FTAs, most importantly:
- An FTA with China. Negotiations for this FTA commenced on 21 November 2013, with the aim to remove market access barriers to investment (there have been 13 rounds of negotiation to date).
- The Canada Comprehensive Economic and Trade Agreement (CETA). A political agreement was reached 18 October 2013 and negotiations concluded in September 2014. CETA was signed on 30 October 2016 and the European Parliament voted in favour of CETA on 15 February 2017. CETA is provisionally applicable since 21 September 2017. The objective of CETA is that 98% of both Canadian and EU tariffs will be eliminated immediately on entry into force.
- As of June 2018, Commissioner Malmström and Trade Minister Ciobo officially launched negotiations for a trade agreement between the EU and Australia. The aim is to reduce existing barriers to trade and investment, promote smart, sustainable and inclusive growth, increase benefits to the consumer, provide a new framework for EU-Australia trade and investment relationships, including a comprehensive, progressive and up-to date set of rules as well as to create job opportunities.
- The EU has launched negotiations for a comprehensive and ambitious trade agreement with New Zealand in June 2018. The trade negotiations aim to reduce existing barriers in trade in goods and services, make sure that European companies compete on a level playing field with businesses from countries that already have a trade agreement with New Zealand and promote smart, sustainable and inclusive growth.
Negotiations of the Transatlantic Trade Investment Partnership with the US are currently on hold.
2. Is your jurisdiction a member of the World Trade Organization (WTO)? What are the main international, regional or bilateral trade agreements to which your country is a party?The EU is a member of the WTO. As an EU member state, Germany is also a member of the WTO.Trade agreements entered into by the EU apply to Germany. See: http://ec.europa.eu/trade/policy/countries-and-regions/agreements.
3. What are the authorities responsible for negotiating trade agreements? How long does it usually take to conclude a trade deal with your country?Trade agreements are conducted at EU level. The EU has specific trade policies in place for all its partners and complies with the global rules on international trade set out by the World Trade Organization.In the early stages of discussions about launching trade negotiations, the European Commission holds a public consultation on the content and options for any free trade agreement, and assesses the impact of any such deal on the EU and the other country.As well as conducting informal discussions with the country concerned, the European Commission then requests a formal authorisation from the Council of the EU (Council) to negotiate a trade agreement with a specific trade partner. The Council’s authorisation may include “negotiating directives” (that is, objectives that the Commission should achieve through the agreement). The Commission’s request is also shared with the European Parliament.After each negotiation round and at other key points in the negotiations, the European Commission simultaneously informs the Council and the European Parliament about the state of negotiations. Discussions take place regularly with the Council and with the European Parliament, but may also be raised periodically at ministers’ level or in plenary debates.There are three main types of agreements:
- Customs unions, which:
- eliminate customs duties in bilateral trade; and/or
- establish a joint customs tariff for foreign importers.
- Association agreements, stabilisation agreements, (deep and comprehensive) free trade agreements and economic partnership agreements, which remove or reduce customs tariffs in bilateral trade.
- Partnership and co-operation agreements, which:
- provide a general framework for bilateral economic relations; and
- maintain existing customs tariffs.
The duration of trade negotiations depends on the political circumstances and developments, but also on the scope and type of agreement under negotiation. For example, the negotiations between the EU and Japan for a free trade agreement lasted about four years, the negotiations between the EU and Mercosur States lasted about 20 years, while negotiations of the Transatlantic Trade Investment Partnership have been side-tracked since Donald Trump was elected as President of the US.A full list of the agreements being currently negotiated by the EU can be found at: http://ec.europa.eu/trade/policy/countries-and-regions/negotiations-and-agreements/#_being-negotiated.4. Does your country apply interim rules during trade negotiations?The EU applies interim rules during trade negotiations on a case-by-case basis.
Supply of services
5. Is your jurisdiction a party to international agreements on cross-border trade in services? Is your jurisdiction taking part in the negotiations of the Trade in Services Agreement (TiSA)?The EU has multiple free trade agreements (FTAs) and other preferential trading relationships in place with third countries and blocs of countries. Examples of agreements that specifically cover cross-border supplies of services include the:
- EU-South Korea Free Trade Agreement (OJ L 127 (14/05/2011)).
- Association Agreement between the EU and the European Atomic Energy Community, and the Republic of Moldova (OJ L 260 (30/08/2014)).
The TiSA is currently being negotiated by 23 members of the World Trade Organization, including the EU. See: http://ec.europa.eu/trade/policy/in-focus/tisa/.6. What domestic legislation and international rules apply to the supply of financial services, legal services and retail sales in your jurisdiction? What are the main requirements that suppliers must comply with?
Regulatory framework. The domestic legislation that governs financial services is the Federal Law on Financial Services Supervision (Finanzdienstleistungsaufsichtsgesetz).EU and international rules that apply to financial services include:
- The Financial Services Action Plan issued by the European Commission in 1999, which contains 42 legislative measures for improving the EU single market in financial services (a summary is available at: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM:l24210).
- Directive 2002/65/EC on distance marketing (http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32002L0065&from=DE).
- Directive 2004/39/EC on markets in financial instruments, which improved, among other things, the transparency of financial markets (http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32004L0039&from=DE).
- Regulation (EU) 575/2013 on prudential requirements for credit institutions and investment firms (https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:02013R0575-20190627&from=EN).
Main requirements. The main requirements to obtain authorisation to operate as a credit institution from the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht) are summarised in a checklist available at: https://www.bafin.de/SharedDocs/Downloads/DE/Formular/BA/dl_170818_checkliste_erlaubnisverfahren_ba.html.Generally, the applicant must provide:
- Detailed information on itself.
- A viable business plan.
- Details of the institution’s business organisation, risk management, internal control procedures, and human and technical resources.
- Details of the institution’s management board.
- Articles of association or partnership agreement.
- Details of the members of the institution’s supervisory body.
- Details of holders of qualifying holdings, other shareholders and related persons.
- Details on compliance with capital requirements and liquidity management requirements.
Regulatory framework. The legal instruments applicable to the recognition of qualifications vary depending on the purpose of recognition and the lawyer’s country of origin. The Convention on the Recognition of Qualifications concerning Higher Education in the European Region 1997 (Lisbon Recognition Convention) applies to qualifications and degrees in the signatory states.The following agreements apply to states that have not ratified the Lisbon Recognition Convention (provided that they have been ratified in the respective state):
- European Convention on the Equivalence of Diplomas Leading to Admission to University 1953.
- European Convention on the Equivalence of Periods of University Study 1956.
- European Convention on the Academic Recognition of University Qualifications 1959.
- European Convention on the General Equivalence of Periods of University Study 1990.
For more details, please contact the Central Office for Foreign Education of the Secretariat of the Conference of Länder Ministers of Education and Cultural Affairs (www.kmk.org/kmk/information-in-english.html).Main requirements. To practise as a lawyer in Germany, a person must possess a qualification to hold German judicial office (section 4, Federal Lawyers Act (Bundesrechtsanwaltsordnung); section 5, German Judiciary Act (Deutsches Richtergesetz)). This means that a person must pass two state law exams. Law studies in Germany conclude with sitting the first state examination in law. The second state exam is taken at the end of a subsequent period of practical training (Referendariat). In addition, the Chamber of Lawyers must issue approval to practise law.The recognition procedure is only available to persons who have earned a degree in the EU, the European Economic Area or Switzerland. To practise law in Germany, a lawyer who was admitted in the EU, the EEA or Switzerland must be both:
- Registered as a European lawyer with the competent body in his/her country of admission.
- Admitted to practise as a lawyer by the German Chamber of Lawyers to pursue the profession of European lawyer.
A person who meets the conditions above can practise law in Germany under the title granted in his or her country of origin. Three years after admission in Germany as a European lawyer, a person can be admitted to practise as a German lawyer if he/she provides either:
- Sufficient proof of knowledge of German law.
- Proof of work on a sufficient number of cases.
For more information, see: www.anerkennung-in-deutschland.de/html/en/lawyer.php.
Regulatory framework. The relevant provisions are set out in the German Trade Regulations Act (Gewerbeordnung), although a significant number of special rules govern specific types of retail sales.Main requirements. Generally, an entity can apply for a retail licence and, if granted, can conduct retail sales if it meets the reliability requirements for the performance of trade. This is the case if, for example:
- The applicant has never been convicted of business-related crimes.
- The applicant has complied with its tax obligations.
7. Are there restrictions on market access for specific services sectors?The following professions and sectors are subject to licensing requirements for market access:
- Trade of over-the-counter medication.
- Private nursing care.
- Geriatric nursing and childcare.
- Production of weapons.
- Trade of weapons, ammunition, explosives and toxins.
- Production of pharmaceuticals.
- Restaurant and pub business.
- Provision of accommodation.
- Conduct of public auctions.
- Taxi services.
- Road haulage.
- Debt collection services.
- Public lottery (which is subject to a monopoly).
- Public notary.
For further details, see the EU regulated professions database at: http://ec.europa.eu/growth/tools-databases/regprof/index.cfm?action=regprofs&id_country=3&quid=1&mode=asc&maxRows=*.
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8. What is the authority responsible for enforcing customs laws and regulations?Imports into Germany are governed by the Union Customs Code (UCC), which was adopted on 9 October 2013 as Regulation (EU) 952/2013. The UCC serves as the new framework regulation on customs rules and procedures throughout the EU. Its substantive provisions entered into force on 1 May 2016.EU customs regulations are implemented by the German customs administration. The German customs administration is part of the Federal Government and consists of three organisational levels:
- The Main Customs Offices (Hauptzollamt) and their Customs Offices (Zollamt), which are responsible for the day-to-day customs business of companies (for example, clearance of goods imported from non-EU countries into Germany and application for customs authorisations).
- The General Directorate of Customs (Generalzolldirektion), which supervises the Customs Offices. The General Directorate of Customs provides general directions on customs regulations (such as tariff classification and valuation) and on the implementation of the UCC.
- The Federal Ministry of Finance (Bundesfinanzministerium), which supervises the General Directorate of Customs.
Based on EU customs law, Germany has issued additional customs regulations to address local specificities (for example, local customs routes, structure and competencies of the national customs administration, and catalogues of administrative offences in the case of violations of customs law).The national rules are set out in the:
- Customs Administrations Act (Zollverwaltungsgesetz) (www.gesetze-im-internet.de/zollvg/BJNR121250992.html).
- Customs Administration Regulation (Zollverordnung) (www.gesetze-im-internet.de/zollv/BJNR244900993.html).
The German customs administration has issued extensive administrative (internal) guidelines to ensure a uniform and consistent implementation of the customs regulations. These guidelines constitute mere administrative advice of the German Ministry of Finance to its customs officials, and are not binding on the public. They are not publicly accessible, but can be purchased.Additionally, the German customs administration has published helpful information on its website in German, English and French (www.zoll.de).In the case of minor infringements of customs regulations, committed either intentionally or negligently, the German customs administration has discretion to impose fines. The infringements that are subject to fines are expressly set out in German law (for example, in section 31 of the German Customs Act). A fine cannot be imposed if it is not expressly stipulated in the law.Where an employee commits an infringement of customs regulations due to lack of supervision by the company’s management, the applicable administrative fine can also be imposed on the responsible managers or the company.The customs administration also has the power to impose personal penalties for voluntary or grossly negligent underpayment of customs duties and import value added tax.
Import duties, tariffs and rates
9. What are the main customs import tariffs and duties?
General tariffs and rates
The legal basis for the tariff classification of goods in the EU is Regulation (EEC) 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff. The nomenclature of the EU customs tariff is based on the Harmonized Commodity Description and Coding System of the World Customs Organization.The European Commission provides an online tool called “TARIC”, which provides useful information on the tariff classification of goods (https://ec.europa.eu/taxation_customs/business/calculation-customs-duties/what-is-common-customs-tariff/taric_de).The German customs administration also provides an online tool called “electronic customs tariff” (Elektronischer Zolltarif), which contains all relevant information on the tariff classification of goods (http://auskunft.ezt-online.de/ezto/Welcome.do;jsessionid=KzfC1B06AGyF6d_Xkmzw4DslL9aThIzWQfk9__69bcuKuCe5x_PM!-1667040759).The vast majority of non-EU goods imported into the EU are subject to an ad valorem customs duty.In addition to customs duties, import value added tax (VAT) is collected on imports. The general VAT rate is 19% and the reduced VAT rate is 7%.
The EU applies tariff concessions (referred to as preferential tariff quotas) to certain beneficiary countries under the Generalised Scheme of Preferences (http://ec.europa.eu/trade/policy/countries-and-regions/development/generalised-scheme-of-preferences/).The EU also grants tariff benefits (that is, entry at a reduced or zero rate of customs duties) for goods from countries with which it has concluded free trade agreements.The German customs administration provides a comprehensive free online tool on the preferential treatment of goods: https://wup.zoll.de/wup_online/index.php.
Non-tariff barriers to imports
10. Are there non-tariff barriers to imports into your jurisdiction?In principle, the cross-border movement of goods and services is not restricted. However, specific restrictions apply to certain goods, countries and individuals for a number of reasons (such as public health or safety). For example, there are restrictions on imports of:
- Agricultural products.
- Medicinal products and narcotics.
- Instruments of torture.
- Cultural assets.
- Plants and products containing vegetable substances.
- Animals and products containing animal substances.
- Weapons and explosive substances.
The website of the German customs administration provides a good overview of the applicable restrictions (in German, English and French) at: www.zoll.de/DE/Fachthemen/Aussenwirtschaft-Bargeldverkehr/Wareneinfuhr/Derzeitige-Beschraenkungen-Wareneinfuhr/derzeitige-beschraenkungen-wareneinfuhr_node.html and www.zoll.de/DE/Unternehmen/Warenverkehr/Einfuhr-aus-einem-Nicht-EU-Staat/Einschraenkungen/einschraenkungen_node.html.11. Can customs decisions and import restrictions be challenged?Decisions of the customs authorities can be challenged by bringing an administrative appeal (Einspruch) before the Main Customs Offices (Hauptzollamt).In principle, an administrative appeal must be lodged before taking legal action before the Fiscal Court (Finanzgericht).The appeal proceedings involve an extensive review of the facts and legal assessment by the customs authorities.The German courts can also apply to the Court of Justice of the European Union for a preliminary ruling (under Article 267 of the Treaty on the Functioning of the European Union) if the issue concerns a matter of interpretation of EU law.
12. What are the main regulations on trade remedies? What are the authorities responsible for investigating and deciding on trade remedies?
As Germany is a member of the EU, trade remedies fall within the jurisdiction of the Trade Defence division of the European Commission.The main EU trade defence legal instruments include:
- Regulation (EU) 2016/1036 on the protection against dumped imports from countries not members of the European Union (http://trade.ec.europa.eu/doclib/docs/2016/june/tradoc_154702.en.L176-2016.pdf).
- Regulation (EU) 2016/1037 on protection against subsidised imports from countries not members of the European Union (http://trade.ec.europa.eu/doclib/docs/2016/june/tradoc_154703.en.L176-2016.pdf).
- Regulation (EU) 2015/478 on common rules for imports (related to imports from members of the World Trade Organization (WTO)) (http://trade.ec.europa.eu/doclib/docs/2015/march/tradoc_153323.pdf).
- Regulation (EU) 2015/755 on common rules for imports from certain third countries (related to imports from non-WTO members) (http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:32015R0755).
As a member of the WTO, the EU implements trade remedies in accordance with WTO rules. The EU implements WTO decisions under Regulation (EU) 2015/476 on the measures that the Union may take following a report adopted by the WTO Dispute Settlement Body concerning anti-dumping and anti-subsidy matters.For more details, see: http://ec.europa.eu/trade/policy/accessing-markets/trade-defence/actions-against-imports-into-the-eu/.
The European Commission is responsible for conducting trade remedy investigations. It usually opens an investigation after receiving a complaint from the EU producers concerned. However, the European Commission can also commence investigations on its own initiative.The European Commission distinguishes between anti-dumping, anti-subsidy and safeguards cases.Anti-dumping. Dumping occurs when manufacturers from non-EU countries sell goods in the EU either:
- Below the sales prices in their domestic market.
- Below the cost of production.
If the European Commission establishes that there has been dumping, it can correct any damage caused to EU companies by imposing anti-dumping measures such as duties on imports of the product from the country in question. These duties can be fixed, variable or refer to a percentage of the total value (ad valorem).Anti-dumping duties can be imposed for up to six months (provisional duties), or up to five years (final duties).For an overview of anti-dumping investigations, see: http://trade.ec.europa.eu/doclib/docs/2013/april/tradoc_151020.pdf.Anti-subsidy. A subsidy is given if a non-EU government provides financial assistance to companies to produce or export goods.The European Commission can counteract any trade-distorting effects of subsidies on the EU market, after conducting an investigation into whether the subsidy is unfair and injures EU companies.These counter-measures consist of duties on imports of the subsidised products (fixed, variable or ad valorem). They can last up to four months (provisional measures) and, if the Commission decides to make them definitive, five years.Safeguards. Safeguards can be applied apply when imports of specific products into the EU increase so suddenly and sharply that EU producers cannot reasonably be expected to adapt immediately to the changed trade situation.In these cases, WTO and EU rules allow for short-term measures to regulate the relevant imports, giving EU companies temporary relief and time to adapt to this unforeseeable surge. These measures usually apply to imports of the specific products from all non-EU countries. In return, the affected EU industry is required to restructure.Provisional safeguard measures may last up to 200 days, and definitive measures up to four years. Measures that exceed three years must be reviewed at mid-term and can be extended for up to eight years in total.
Investigations and enforcement
13. What are the requirements and procedure to start trade remedies investigations?The European Commission will examine the evidence provided by the complainants and decide on whether to open an investigation or review existing measures. Trade remedies investigations are initiated either:
- Following a complaint by an industry representative or a company working in a particular industry.
- On the initiative of an investigating authority.
Depending on the applicable legal instrument, an investigation can be initiated when there is evidence of all of the following:
- Dumping, subsidies or significant increase of imports.
- Injury to a domestic industry.
- Causal link between the injury and the imports concerned.
The European Commission is responsible for conducting the investigations and for deciding on all the actions to be taken (after consulting the Trade Defence Committee composed of representatives of EU member states), for example, whether to:
- Impose provisional and definitive trade defence measures.
- Accept or reject undertakings.
- Grant refunds.
- Terminate, amend or extend trade defence measures.
The Commission has a Trade Hearing Officer who ensures that the rights of interested parties are protected during trade defence investigations, in particular that:
- Due consideration is given to all relevant facts and arguments.
- The confidentiality of business secrets is respected.
- Access to the investigation file is granted to interested parties.
14. Is there a right of appeal against the authority’s decision? What is the applicable procedure?Interested parties can apply for review of the European Commission’s decisions on trade remedies to either or both the:
- Court of Justice of the European Union.
- World Trade Organization Dispute Settlement Body.
Additionally, exporters who can demonstrate that circumstances have changed significantly since the imposition of the original measure can request the initiation of a review investigation, to decrease or remove the duty. The changes must be significant and of a lasting nature. This can include changes regarding dumping or subsidisation, changes in the domestic market (for example, extent of injury and domestic production), or changes of scope and form of the measures.Such a request may result in the amendment, repeal or continuation of the relevant measures.Additionally, before the expiration of the maximum five-year period (see Question 12, Regulatory authority), EU producers can request an expiry review, which may result in the measures being extended or repealed.Importers can also request a refund if they believe that:
- Their exporting producers are not dumped/subsidised.
- Their exporting producers’ dumping/subsidy margin is less than the duties paid by importers.
For more information on trade defence instruments, see: http://trade.ec.europa.eu/doclib/docs/2010/october/tradoc_146701.pdf.
15. What are the main requirements to export goods from your jurisdiction? What are the authorities responsible for enforcing export regulations and controls?As Germany is a member state of the EU, exports from Germany are subject to EU export regulations. Exports are governed by:
- The provisions of the Union Customs Code, which are set out in Regulation (EU) 952/2013, as amended by Regulation (EU) 2016/2339.
- A considerable number of regulations dealing with the exports of specific goods, such as:
- Regulation (EC) 1013/2006 on shipments of waste;
- Regulation (EU) 649/2012 concerning the export and import of hazardous chemicals; and
- Regulation (EC) 428/2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items.
The rules contained in these regulations are directly applicable in Germany.EU law is complemented by German law. In accordance with Article 346 (1)(b) of the Treaty of the Functioning of the European Union (TFEU), the export of arms, munitions and other war material as specified in a list referred to in Article 346(2) TFEU is governed solely by German law. The relevant domestic rules applicable to exports are set out in the:
- Foreign Trade and Payment Act (Auβenwirtschaftsgesetz).
- Foreign Trade and Payment Ordinance (Auβenwirtschaftsverordnung).
- War Weapons Control Act (Kriegswaffenkontrollgesetz).
The Political Principles of the Federal Government, administrative orders and official guidelines provide important guidance on how export regulations are implemented.Information (in English) on exports controls applicable to exports from Germany can be found on the website of the Federal Office for Economic Affairs and Export Control (Bundesamt für Wirtschaft und Ausfuhrkontrolle) (www.bafa.de/EN/Foreign_Trade/Export_Control/export_control_node.html).16. Are certain categories of goods subject to specific export quotas, restraints or other controls?Extensive restrictions apply to the trade of certain war weapons under the German War Weapons Control Act. The development and manufacturing of, and trade in, nuclear, biological and chemical weapons, anti-personnel mines, and cluster munitions are entirely prohibited.The German Foreign Trade and Payment Ordinance sets out licensing requirements for the export of certain military items that are listed in the German Export List annexed to the Ordinance. The export of specified firearms, their parts and essential components and ammunition requires authorisation in accordance with Regulation (EU) 258/2012.The export of dual-use items is also restricted under Regulation (EC) 428/2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items (Dual-Use Regulation). The Dual-Use Regulation requires licensing for the export of certain items listed in the EU dual-use list in Annex I to the Regulation. The export of non-listed items is subject to licensing if they are destined for:
- Military end-use in countries that are subject to an arms embargo.
- End-use in connection with chemical, biological or nuclear weapons in non-EU member states, with the exception of Australia, Canada, Liechtenstein, Japan, New Zealand, Norway, Switzerland and the US.
In addition, a licence is required for the export of (German Foreign Trade and Payment Ordinance):
- Dual-use items listed in the German Export List to countries specifically listed.
- Non-listed goods intended to be used for nuclear purposes in connection with facilities in specified countries, such as North Korea, Jordan and Pakistan.
There are also export licensing requirements under:
- Regulation (EC) 338/97 on the protection of species of wild fauna and flora.
- Regulation (EC) 116/2009 on the export of cultural goods.
- Regulation (EU) 2019/125, concerning trade in certain goods which could be used for capital punishment, torture or other cruel, inhuman or degrading treatment or punishment (exports of goods that have no practical use other than such treatment are entirely prohibited).
The export of certain dangerous chemicals is subject to prior notification to, and consent of, the country where the items are to be exported (Regulation (EU) 649/2012 concerning the export and import of hazardous chemicals). The same prior informed consent procedure applies to exports of waste under Regulation (EC) 1013/2006 on shipments of waste.Generally, the Federal Office for Economic Affairs and Export Control (Bundesamt für Wirtschaft und Ausfuhrkontrolle) is responsible for the issuance of licences and other administrative acts required for exporting goods from Germany. The German Federal Bank (Deutsche Bundesbank) has exclusive competence in the areas of capital movements and payments, as well as movements of foreign assets and gold.
17. What are the consequences of non-compliance with export regulations?Non-compliance with export regulations can result in administrative and/or criminal penalties. As a general rule, intentional violations of export regulations are criminal offences and are subject to imprisonment, while negligent violations constitute administrative offences, which can be punished with a fine.
International trade restrictions
18. Are there specific restrictions on trade with certain jurisdictions?Germany imposes both embargoes on specific jurisdictions and sanctions targeting specific individuals and organisations.Embargoes on trade with specific jurisdictions are usually enacted through separate legal acts and their content can therefore vary considerably. However, measures imposed typically include:
- Export and import prohibitions.
- Prohibitions on technical assistance.
- Licensing requirements for exports.
- Financial sanctions and restrictions on financial transfers.
Sanctions targeting specific organisations, entities or individuals typically include prohibitions to make funds or economic resources directly or indirectly available to the targets and a freeze of assets and economic resources of the targets (or those under their control). However, the following are not prohibited:
- Meetings and negotiations with targets.
- Provision of services to targets (subject to strict limitations).
- Acceptance of payments from targets.
Information on embargoes against specific jurisdictions and sanctions targeting specific organisations or individuals can be found on the website of the Federal Office for Economic Affairs and Export Control (Bundesamt für Wirtschaft und Ausfuhrkontrolle) at: www.bafa.de/DE/Aussenwirtschaft/Ausfuhrkontrolle/Embargos/embargos_node.html.The website of the German customs authorities also provides an overview (in English) of embargo measures taken against specific jurisdictions at: www.zoll.de/SharedDocs/Boxen/EN/Hintergrund/0016_list_of_embargoed_countries.html?nn=92628. An overview (in English) of the sanctions targeting specific individuals and organisations is available at: www.zoll.de/SharedDocs/Boxen/EN/Hintergrund/0017_list_of_individuals_and_organisations.html?nn=92632.19. What is the authority responsible for imposing trade restrictions?Trade restrictions usually stem from decisions of international organisations or institutions such as the United Nations or the Organization for Security and Co-operation in Europe, which are binding on Germany under public international law. To be applicable in Germany, these decisions must be implemented through EU law or domestic law. The EU can also impose sanctions on its own initiative. The EU generally has exclusive competence to impose economic embargo measures (Article 3(1)(e), Treaty on the Functioning of the European Union).Embargo measures imposed by the EU are always based on a decision defining a common position of the EU member states, in accordance with Article 29 of the Treaty on European Union. These decisions are binding on Germany. They are generally implemented through EU Council regulations, which are directly applicable in Germany. However, the EU is not competent to take decisions relating to arms embargoes. Therefore, trade in arms is regulated by German domestic law under amended sections 74 et seq of the Foreign Trade and Payment Ordinance.The Federal Office for Economic Affairs and Export Control (Bundesamt für Wirtschaft und Ausfuhrkontrolle) is responsible for the handling of embargoes relating to goods and technical assistance. The customs authorities and the Prosecutor’s Office are in charge of enforcement actions.20. What are the consequences of non-compliance with trade restrictions?Non-compliance with trade restrictions can result in administrative and/or criminal penalties. As a general rule, intentional violations of trade restrictions are criminal offences and subject to imprisonment of up to ten years, while negligent violations constitute administrative offences, which can be punished by a fine.Depending on the trade restriction, any underlying legal transaction may also be void (section 134, German Civil Code).21. Are businesses subject to specific compliance requirements? What practical steps should a business take to ensure compliance with trade restrictions?As Germany is a member of the EU, businesses in Germany are subject to both German and EU law. Companies and their employees must comply with domestic and EU trade regulations.Companies that apply for a licence to export restricted items must appoint a person responsible for exports, or chief export control officer (CECO), who is personally responsible for transfers and exports. This function can be allocated, for example, to a member of the board of management, a managing director or a representative shareholder. The CECO plays a key role in the company and is personally responsible for ensuring compliance with the legislation on exports.There are various benefits to, and reasons for, implementing an internal compliance programme (ICP). By applying a defined procedure, a company can minimise liability risks. According to guidelines of the Federal Ministry for Economic Affairs and Export Control (Bundesamt für Wirtschaft und Ausfuhrkontrolle), an ICP should provide for the following obligations:
- Selection of staff. The CECO must select sufficient and qualified staff, and ensure that the staff selected is reliable and properly trained.
- Staff training. To ensure that employees have the required skillset, regular staff training must be organised. In addition, necessary support materials must be procured and updated as required.
- Organisational structure. The CECO must define the chain of responsibility for export controls within the company and the workflows to avoid breaches of foreign trade and payment legislation (workflow management).
- Supervision. The CECO must use appropriate measures to ensure compliance with all instructions concerning workflow management, and must also regularly check the functioning of the ICP.
However, there is no “one-size fits all” ICP. The above guidelines are recommendations only, that is, companies are not legally bound by them. The form and content of an ICP depend on the size of the company and the sector it operates in. In any case, a risk-based approach is recommended while conducting a risk analysis and impact study.The guidelines of the Federal Ministry for Economic Affairs and Export Control can be found at: www.bafa.de/SharedDocs/Downloads/DE/Aussenwirtschaft/afk_merkblatt_icp.pdf?__blob=publicationFile&v=3.An overview from 2012 (in English) is available at: www.bafa.de/SharedDocs/Downloads/EN/Foreign_Trade/afk_information_leaflet_internal_compliance_programms.pdf?__blob=publicationFile&v=2.
Foreign trade barriers
22. What is the procedure for local exporters to complain against foreign trade barriers contrary to the WTO or other trade agreements?The European Commission monitors and assists EU industries when non-EU countries take trade defence measures against EU exporters.The Commission also plays a direct role in anti-subsidy and safeguard investigations when EU subsidies are involved and the EU as a whole is targeted.Finally, the EU promotes discipline and seeks to make non-EU countries comply with their WTO obligations through:
- Bilateral meetings.
- Consultations under the relevant WTO agreements.
- WTO dispute settlement mechanisms.
For more information, see: http://ec.europa.eu/trade/policy/accessing-markets/trade-defence/actions-against-exports-from-the-eu/.
Developments and reform
23. Are there impending developments or proposals for reform affecting international trade in goods and services?Regulation (EC) 428/2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items is currently undergoing a reform.
Anahita Thoms, Partner
T +49 (0) 211 3 11 16 140
F +49 (0) 211 3 11 16 199
Professional qualifications. Germany, LawyerAreas of practice. Global investigations, particularly in the fields of international trade law and data protection (Head of Baker McKenzie’s International Trade Practice in Germany).Experience
- Advising on internal compliance programmes.
- Accompanying internal and external investigations and self-disclosures in cases of breaches of sanctions.
- Export control and foreign investment reviews, closely collaborating with the competent authorities.
- Handling complex issues that arise from the intersection of US and EU trade and data protection regulations.
Professional associations/memberships. American Bar Association (ABA), co-chair of the Export Controls and Economic Sanctions Committee (served as vice-chair for three years); vice-chair of the ABA Privacy, E-Commerce & Data Security Steering Committee.Awards
- International Trade Lawyer 2020 (Germany)
- Client Choice Awards
- Rising Star 2016, New York Law Journal.
- International Trade Lawyer 2016 (NY), Client Choice Awards.
- Global Investigations Review’s 40 under 40.
- ABA Section of International Law’s Award 2016, Outstanding CLE Committee Program.
- Also recognised by JUVE, Legal 500 Germany and US and Who’s Who Legal.
Nicole Looks, Partner
T +49 (0) 69 2 99 08 620
F +49 (0) 69 2 99 08 108
Professional qualifications. Germany, Certified Tax AdviserAreas of practice. Value added tax and customs-related matters (Head of the German General and Indirect Tax Practice and member of the European Indirect Tax Practice).Experience
- Advising on all aspects of customs and VAT compliance, including notification obligations and self-disclosures.
- Advising on supply chain restructuring.
- Representing companies in tax field audits, tax controversies and at German finance courts resp. the European Court of Justice.
- Professional associations/memberships: German Chamber of Tax Advisors (Steuerberaterkammer), Foreign Trade Association (Außenwirtschaftsrunde), German Tax Law Association (Deutsche Steuerjuristische Gesellschaft), International Fiscal Association.
- Women in Tax Leaders 2017, International Tax Review.
- Leading Individual for Indirect Tax in ITR’s 2017 Indirect Tax Leaders, International Tax Review.
- Leading Individual in Tax Law 2016/2017, JUVE.
- Best in Tax 2017, Best Lawyers in co-operation with Handelsblatt.
- Best in Tax 2016, Euromoney European Women in Business Law Awards.
- Also recognised by Legal 500 and Chambers Europe.
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