Lobby register: New obligation to file representatives of interests (Interessenvertreter) as of 1 January 2022
- Extensive information required from representatives of interest in the lobby register, which can be accessed by the public
- Fines possible for incomplete, inaccurate or delayed disclosures
- “Blacklisting” in the event of refusal to provide information
- Possibility to restrict access
The new German Lobby Register Act (LobbyRG) will enter into force on 1 January 2022. This creates a new register in which so called “representatives of interest” (Interessenvertreter) must be filed and which can be accessed by the public. The legislator’s stated intent is to strengthen public trust in politics and the legitimacy of parliamentary decision-making processes, as well as to prevent particular interest organisations and representatives from illegitimately exerting influence.
I. General filing obligations for all representatives of interest
1. Broad definition of representative of interest
The term “representation of interests” (Interessenvertretung) is of central importance in the LobbyRG. Persons who conduct representation of interests either for themselves or who commission others to do this for them (“representatives of interest”, section 1(4) LobbyRG), are in general obliged to make a filing with the lobby register. Besides individuals, legal entities, partnerships and other organisations can be representatives of interest, as well.
Objective and subjective elements are used to determine whether a representation of interests exists. In an objective manner contacting any bodies, members, parliamentary or other groups of the German Parliament (Bundestag) or the German federal government or (parliamentary) permanent secretaries or heads of (sub-)departments is sufficient. How they are contacted is irrelevant.
In a subjective manner, the purpose of such contact must be to influence, whether directly or indirectly, the decision-forming or decision-making procedures of such groups. The term representative of interests has been deliberately defined broadly, so that nearly all contacts initiated towards such groups that are driven by economic interests will be considered a representation of interests (Bundestag document 19/27922, page 18).
2. Mandatory registration requirements
Pursuant to section 2(1) LobbyRG, representatives of interest have to make a filing with the lobby register without undue delay if the representation of interests (i) occurs regularly, (ii) is intended on a long-term basis, (iii) occurs professionally on behalf of a third party or if (iv) more than 50 different contacts for a representation of interests have been initiated within three months.
According to the Act’s justification, these additional requirements can already be met when representing interests for the first time. This is because the representation of interests can already be “intended on a long-term basis” if it has only started but is intended to be conducted regularly. The requirements for a regular activity as stated in the Act’s justification are not very high, either, and the way they are worded is also imprecise (Bundestag document 19/22179, page 8). In practice, it is to be expected that, given the risk of being fined, entries in the lobby register will already be made where interests are represented only once or on an irregular basis on a precaution.
II. Exceptions from mandatory registration
Mandatory registration is limited by sections 2(2) to (4) LobbyRG, according to which representatives of interest do not have to be registered in the lobby register if and to the extent that the representation of interests occurs in a certain way. For example, section 2(2) no 1 LobbyRG exempts natural persons from mandatory registration as long as they put forward their own personal interests only, regardless of whether or not such interests also constitute entrepreneurial or other interests. Representatives of interest are also exempted if they are asserting concerns that are solely local in nature, directly affecting not more than two electoral districts (section 2(2) no 2 LobbyRG). Another exception applies to employer or employee associations in the sense of Article 9(3) of the German Constitution (Grundgesetz) exerting influence on work and economic conditions (section 2(2) no 7 LobbyRG).
Consequently, cases where the contact is initiated from the side of the legislative or executive are also exempted, i.e. where bodies, members, parliamentary or other groups of the German Bundestag request factual information, data or expertise from third parties (section 2(2) no 5 LobbyRG). Mere participation in public hearings of the committees, public conferences or other public events of the bodies, members, parliamentary or other groups of the German Bundestag does not have to be registered either (section 2(2) no 4 LobbyRG).
III. Extensive disclosure obligations and availability for public access
Section 3(1) LobbyRG determines what data and information has to be filed with the lobby register. The data subject to mandatory notification is more extensive than what has to be filed with the transparency register. Apart from this, the public has unrestricted access to the information provided – with the exception of sensitive data such as dates of birth, addresses and electronic contact details (section 4(2) sentence 2 LobbyRG). Furthermore the information is also machine-readable, enabling third parties to specifically search for representatives of interest using the search function.
In addition to (personal) details regarding the natural persons, legal entities and companies, there is also other information which has to be disclosed, namely information relating to the representation of interests itself. For example, the area of interest has to be described, as well as the activity itself. If a representative of interests has to make a filing with the lobby register as a result of being commissioned to carry out a representation of interests by another party, details on the client are also required. The number of people working in the area of representation of interests has to be disclosed as well. This mainly includes persons supporting the representation of interests, for example by doing research. Moreover, annual expenses for the representation of interests have to be disclosed.
In addition, there is a disclosure obligation for financial statements where such disclosure is not already mandatory pursuant to other statutory provisions. This may lead to companies and partnerships being required to disclose their financial statements whereas previously they could invoke exemptions for disclosure under the German Commercial Code (Handelsgesetzbuch – HGB) or the German Public Disclosure Act (PublG), for example based on their inclusion in consolidated financial statements or due to not reaching certain thresholds. While the text of section 3(1) no 8 LobbyRG only mentions legal entities (juristische Personen), this will have to be understood to the effect that partnerships (Personengesellschaften) are covered by the disclosure obligation, as well.
IV. Obligation to file “chain assignments” (Kettenbeauftragungen)
In case of “chain assignments” (Kettenbeauftragungen) for the purpose of a representation of interests, i.e. multiple assignments of certain tasks within a group of companies across several levels of the shareholding chain, all companies which expressly assign another group company to engage in representation of interests ultimately must be filed with the lobby register. This is because according to section 1(4) LobbyRG a representation of interests exists even if the representation of interests is only “commissioned”. This means that every company that commissions another company to carry out a representation of interests is subject to filing obligations, even if this other company only “commissions” another company with the representation of interests.
V. Obligation to register without undue delay is subject to a fine – transitional period until 28 February 2022
As soon as there is a filing obligation, the filing with the lobby register must be conducted without undue delay (section 2(1) sentence 2 LobbyRG). Section 8 LobbyRG provides for a transitional period of two months for initial filings. This means that the initial filings with the lobby register must be made by 28 February 2022, at the latest. Furthermore, the information in the register must be updated at least once a year. However, most changes to the data subject to filing must already be reported before the annual update.
If certain information is not provided on time or is incomplete or incorrect, this can be fined with a fine of up to €50,000. Negligent behaviour is sufficient for this.
VI. “Blacklisting” in the event of refusal to provide information
In principle, representatives of interest subject to filing are entitled to refuse to disclose information on annual expenses on representation of interests, on grants, subsidies and donations as well as to non-disclose financial statements (section 3(2) LobbyRG). However, the refusal will be noted in the lobby register and the representatives of interest refusing to provide this information will be identified in a separate public list in the lobby register.
However, the refusal to provide the above-mentioned information also has practical consequences. For example, participation in public hearings of the committees of the German Parliament (Bundestag) will only be possible if all required information will be published. Similarly, representatives of interest who are on the blacklist are no longer to be involved in legislative procedures at an early stage.
VII. Access to the lobby register may be restricted
Public access to the lobby register may be restricted in whole or partially – similar to the comparable practice with regard to the transparency register, if certain interests of the person subject to the filing obligation prevail. This is the case if facts justify the assumption that public access to the lobby register would expose the respective individuals to the risk of becoming victim of serious crime.
VIII. New government coalition planning to expand the Act’s scope
Although the LobbyRG has not yet entered into force, the new government coalition of SPD, BÜNDNIS 90/Die Grünen (Alliance 90/The Greens) and FDP announced in their coalition agreement presented on 24 November 2021 that it intends to toughen the legislation in this area. According to the current state of planning, in future, contact with ministries from the speakers level (Referentenebene) upwards will be sufficient to constitute a representation of interests. In addition, the group of representatives of interests subject to filing shall be expanded in a “differentiated manner that does not infringe fundamental rights”.
Since the Act is already vague and very broad to some extent, it remains to be seen what a subsequent toughening of the respective legislation will look like, intending to expand the Act’s scope even further.
Failure to comply with the filing obligation can cause a considerable fine. Any “blacklisting” which is subject to disclosure should also be avoided. Since the term “representation of interests” is very broad, it is advisable for all companies to clarify at an early stage whether there is a filing obligation.
If you have any questions about the lobby register, in particular about a possible filing obligation (also for group companies or affiliated enterprises), about information subject to filing, applications for restriction of access or about compliance with the filing obligation, please contact us. We continuously follow developments regarding the lobby register.
Any questions? Please contact: Gerald Reger, Michael Braun, Christian Haagen
Practice groups: Corporate/Mergers & Acquisitions, Capital Markets, Compliance & Investigations, Family-owned Businesses & Private Clients