Two years after the German Lobbying Register Act (“Lobbying Register Act” – Lobbyregistergesetz) came into force on 1 January 2022, a new, extensively tightened and extended version of the Act will apply from 1 March 2024. Companies, associations, public affairs agencies and natural persons that are already registered in the Lobby Register will once again face compliance challenges: all existing entries must be amended and updated. Also, due to the expanded scope of application of the Act, some companies will have to register for the first time.
This article updates and expands upon our previous blog post of January 2022: The new German Lobbying Register Act – Blacklisting for more transparency?
Background
The Lobbying Register Act aims to strengthen public trust in politics and make representation of social and business interests vis-à-vis the political sphere more transparent. In mid-February 2024, the Lobby Register contained over 6,100 entries, with the vast majority of registered lobbyists being legal entities.
Under the law, “representatives of special interest” – or “lobbyists”– are all natural or legal persons, partnerships or other organisations, including networks, platforms or other forms of collective activities, which themselves engage in or commission the representation of special interest with members of the German Bundestag or of the Federal Government in order to influence political processes.
Following initial practical experience over the last few years, the German legislator recognised the need for amendments to be made to the Lobbying Register Act, focussing on (i) increasing transparency by strengthening the informative value of the register entries and (ii) decreasing the bureaucratic burden for lobbyists.
Extended scope of application as of March 2024
Lobbyists must register in the Lobby Register if their lobbying activity:
- is carried out on a regular basis
- is intended to be permanent
- is carried out on behalf of third parties
- involves more than 30 different lobbying contacts within three months, or
- is commissioned in exchange for compensation.
Materiality threshold
As of March 2024, registration will be required if a natural or legal person had 30 (previously, 50) relevant lobbying contacts within the last three months. In practice, such threshold may be reached quickly, i.e., by sending circular letters.
Addressees of lobbying activity
In future, addressees of special interest representation in the German Bundestag and the Federal Government include the “Heads of Division” (Referatsleitungen), since practical experience has shown that lobbyists often contact the “working level” of staff to convey their concerns. The thresh-old has therefore been lowered to include relevant lobbying contacts at the level of “Heads of Division” in German Federal Ministries.
Registration obligation of principals
As uncertainties arose in the past, the German legislator has clarified that the commissioning of interest representation also triggers a separate registration obligation for the principal if compensation is granted for such activities. The term “compensation” must be understood broadly to include not only monetary payments but also the granting of benefits or contributions in kind. In practice, this requirement can quickly be met when e.g., public affairs agencies are involved.
Deadlines
Generally, lobbyists must register immediately if their activities trigger a duty to register. However, a transitional period of two months, that is, until 30 April 2024, has been established for initial registrations after the amended Lobbying Register Act comes into force.
Revision of all existing entries: “Migration” to the new legal situation in 2024
Existing entries must be revised as follows (overview of key changes):
“Representative office in the capital city” (Hauptstadtrepräsentanz)
In future, register entries must – if applicable – contain the contact details of a “representative office in the capital city” of the respective company. According to the German legislator, such representative office in Berlin can be seen as an indication of continuous lobbying activity by the respective organisation.
Registered persons
In the future, all natural persons who are entrusted with lobbying on more than an occasional basis and who engage directly in lobbying for the registered organisation must be registered. This includes, for example, voluntary members and members of an extended executive or supervisory board. If an authorised representative, for example, the CEO, of a legal entity directly represents special interests, this must also be explicitly stated in the Lobby Register. Previously, only “employees” who directly represented the interests of the organisation had to be registered.
“Revolving door effect” (Drehtüreffekt)
As of March 2024, the Lobby Register entry must indicate whether a listed natural person entrusted with lobbying activities currently exercises a mandate, public office or function in the German Bundestag, Federal Government or federal administration or has done so in the past five years.
Content of lobbying activities
In future, considerably more specific information and particulars on the content of lobbying activities will be required.
- Activities carried out “for the purpose of lobbying” must be described more precisely. In the past, the information provided was often limited to a detailed explanation of the general activities of the respective organisation.
- From now on, lobbyists are obliged to individually name and register all current, planned or intended regulatory projects (including at EU level insofar as there is relevant representation of special interests vis-à-vis relevant addressees at German federal level).
- From 1 March 2024, statements and expert opinions containing the main arguments or positions for the projects sought or to be prevented must be published in the Lobby Register unless they were already published as part of formal participation procedures. In future, such statements or expert opinions must be uploaded to the Register by the end of the respective quarter in which they were sent to the addressees. Previously, an immediate updating obligation applied.
Information related to the financial year
From March 2024, numerous additional or amended registration requirements relating to the financial year will apply, in particular:
- The number of employees, i.e., those that spend ≥ 10% of their work on lobbying (a new de minimisthreshold), must no longer be stated as a “headcount”, but in full-time equivalents.
- Fundamentally new is the obligation to list the registered organisation’s main sources of funding in descending order of their share of total income.
- Providing financial information on (i) annual financial expenditure on lobbying, (ii) government grants and subsidies, (iii) donations from third parties and (iv) membership fees may no longer be refused. In the past, around 17% of lobbyists exercised their right of refusal.
- Annual financial statements or reports of, e.g., legal entities, for which an exception previously applied due to disclosure obligations under commercial law, must also be published directly in the Lobby Register in the future for full transparency
Commissioned lobbying activities
If lobbying activities are carried out not only by the organisation or company itself but also by third parties, as of March 2024, considerably more specific and extensive information must be provided on such commissioned activities. In the Register, information must be provided e.g., on (i) the identity of the clients/principals for whom the lobbying is carried out, and (ii) the funds received per mandate for the past financial year in instalments of EUR 50,000.
Deadlines
Between 1 March 2024 and 30 June 2024, all existing entries must be revised, amended and released for publication in the Lobby Register. Entries for which this migration has not been completed by 30 June 2024 will automatically be transferred to the list of former lobbyists.
Updating and monitoring obligations
The previous “annual update”, which was based on the initial entry date, no longer applies. In future, only an annual “financial year update” and confirmation of the overall entry, no later than six months after the end of the last financial year, will be required.
Additionally, the previously existing quarterly updating obligation for so-called “master data” will be changed to an immediate updating obligation under the revised Act.
What should companies do now?
The entry into force of the amended Lobbying Register Act is imminent. The transitional periods of (i) two months for the first-time fulfilment of the registration obligations by 30 April 2024 and (ii) four months for the adjustments (“migration”) of existing entries by 30 June 2024 require swift action.
The specific internal measures to be observed depend on the individual circumstances of each company. However, generally, the following steps seem 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. Especially, companies that were not subject to registration under the old legislation or that have recently changed their lobbying activities, should review if they are now subject to registration;
- carry out training of all relevant “public affairs” employees;
- prepare the initial entry in the Lobby Register (if applicable).
- Regarding the so-called migration process of existing entries, companies should:
- determine the “status quo” of the existing entry, i.e., (i) what information is already registered in the Lobby Register and (ii) whether the company has made use of the previous option to refuse to provide certain financial information;
- review the “to-do list” for organisations or natural persons provided by the Lobby Register and identify which natural persons, bodies and departments in the company must be contacted promptly to compile the relevant information;
- prepare a timeline until the end of the transitional period for the migration of the entry.
- Regarding the duty to review and update the registered information, companies should:
- review the existing internal monitoring processes;
- consider training all involved employees about the review and update obligations of the registered information;
- clearly assign the new tasks to its employees.
For further information, please contact:
Dr. Kerstin Wilhelm, Linklaters
kerstin.wilhelm@linklaters.com
