GERMANY: Cabinet approval of Germany Foreign Trade and Payments Act

Monday November 5 2012

The Federal Government has adopted the draft Act to modernise the Germany Foreign Trade and Payments Act. This revision of the law forms part of the modernisation of foreign trade and payments legislation, as stipulated in the Coalition Agreement.

Substantive changes are planned in the case of the provisions on fines and imprisonment for violations:

• As pointed out by the courts on various occasions, the current criminal provisions use fuzzy legal concepts. For this reason, the new version drops most of these unclear terms.
• The penalties in the form of fines and imprisonment are to be oriented more clearly to the degree of fault. Certain deliberate violations of central provisions of foreign trade and payments law will no longer be punished as an administrative offence, but as a crime. For example, the deliberate unauthorised export of dual-use goods will certainly be prosecuted as a criminal offence; in the past, certain other criteria were required for a criminal prosecution to take place. Dual-use goods are civilian products which can also be used for military purposes, such as machine tools which can be used to manufacture both civilian and military goods.
• The deliberate unauthorised export of military equipment remains a criminal offence. In future, all violations of arms embargoes, i.e. all forms of exports to embargoed countries or the facilitation of this, shall be punished as a crime. Violation of arms embargoes by negligence remains a crime.

The new Foreign Trade and Payments Ordinance is to be adopted around the time when the new Act enters into force. The main purpose is to streamline and simplify the Ordinance, without undertaking any substantive changes. Also, certain special German provisions are to be revoked. The strict export controls for military equipment remain unchanged. The relevant rules, and in particular the Political Principles for the Export of War Weapons and Other Military Equipment, which have been in force since 2000, remain unchanged.

The provisions being revoked are special rules referring to the export of dual-use goods. These provisions stipulate licensing requirements – which do not exist in other European countries – and date from the days before the existence of uniform European rules. The enactment of the EU Dual Use Regulation, which provides uniform and comprehensive rules on export controls for dual-use goods, means that the German rules are no longer of significance.

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