Cash ban when buying real estate
Law to make it easier to hunt down oligarch wealth
12/01/2022, 8:49 p.m
Investigators in Germany can hardly understand who owns real estate, yachts or airplanes. The EU sanctions against Russian oligarchs are difficult to enforce. The Bundestag passes an amendment that is now intended to change that.
Real estate transactions in Germany will no longer be allowed to be settled in cash. Precious metals such as gold and silver as well as diamonds may no longer be used to pay for real estate. This is provided for in the new Sanctions Enforcement Act passed by the Bundestag. The aim of the law is to enforce international sanctions – such as those imposed on Russian oligarchs – more effectively. This also includes stricter action against money laundering through the cash ban.
The law that has now been passed also contains structural changes at authority level. The federal government is to set up a new central office for the enforcement of sanctions, which will collect information about sanctioned persons and their assets, for example. There will also be a place to take tips from the public.
“Sanctions by the European Union have gained in importance as a foreign policy instrument,” says the law presented by the coalition. “In this context, it has been shown that structural improvements are necessary at the enforcement level.”
With the votes of the coalition factions and the Left, Parliament also adopted a resolution calling on the federal government, among other things, to promptly create a real estate transaction database based on information from notarial certifications. This should enable the authorities to have fully digitized access to current data.
“Draining dirty financial flows”
The federal government presented its plans for the new sanctions law in May. The reason for this was the realization that the EU’s sanctions against Russian oligarchs have proven to be difficult to enforce. The investigators have their sights set on assets such as real estate, yachts, cars and airplanes in Germany – investigators often encounter unclear ownership relationships here.
The new law gives the rule of law better tools “to reveal hidden assets and hold the real owners accountable,” said Green finance politician Sabine Grützmacher. Her parliamentary colleague Bruno Hönel particularly welcomed the ban on cash in real estate transactions: “These are milestones in draining dirty financial flows.”
The Bundestag had already passed the first stage of the Sanctions Enforcement Act. It gave the authorities the option to “seize” assets until the ownership issue was resolved. In addition, an obligation to provide information was introduced for all those people and companies that are on the EU sanctions list. Those affected must therefore report their assets in Germany themselves. In addition, an obligation to provide information was introduced for all those people and companies that are on the EU sanctions list. Those affected must therefore report their assets in Germany themselves. If they do not comply with this obligation, they face fines and other penalties.