Aim: to sanction with legal certainty
Federal government plans “oligarch law”
4/6/2022 6:53 p.m
The federal government is issuing numerous sanctions against Russian citizens. However, there is no independent legal basis. A law is supposed to change that. Better information should make it easier to freeze assets, for example.
The federal government is planning a new law to better enforce sanctions, for example against people close to Russian President Vladimir Putin. The aim is “a sanctions enforcement law in which the various laws that are affected here are addressed and we quickly create all the options for action that we need to be able to act ‘state of the art’,” said Federal Chancellor Olaf Scholz Bundestag. Apparently there is no timetable at the moment. In the environment of the Ministry of Finance, which is in charge alongside the Ministry of Economics, it was said that a speedy development was planned.
According to the task force, there are a number of weaknesses in the enforcement of sanctions against Russian oligarchs and companies. “A central problem is that there is no independent legal basis for determining assets in the area of sanctions. This means that the authorities have to access general legal bases that are not designed for the area of sanctions.” The data exchange between the authorities could also be improved. Circumvention cases in which assets are moved or concealed are particularly problematic.
“In order to record these cases at national level, it is necessary to create the appropriate conditions.” According to several participants in the Finance Committee of the Bundestag, Federal Finance Minister Christian Lindner announced the law as a possibility. Germany has so far had little experience in enforcing such sanctions, an insider told Reuters. Chancellor Scholz described the question as to whether the German state had “all the necessary instruments” at its disposal to “act actively as we would like to” with the sanctions as “entirely justified”. The answer to that is “no”. A second participant at the meeting added that legal certainty should be created.
Oligarchs can still use property themselves
According to previous information from the German government, oligarchs who are affected by EU sanctions against Russia in the course of the war in Ukraine can at least still use their property themselves in most cases. Accordingly, a yacht may still be in port, for example, but no longer chartered out. A condominium may continue to be used by the sanctioned owner himself, but not sold. You can still drive your own car, but not use it as a taxi.
The organization Transparency Germany, among others, had criticized shortcomings in the local regulations on beneficial ownership in connection with the sanctions against wealthy and influential Russians. In early March, the organization complained that it was too easy to hide dirty money in Germany. It is unknown or cannot be proven which real estate and other assets the oligarchs actually own in Germany.
According to government circles, special intervention options are now being considered as part of a law, for example to order compulsory administration. So far, this has only been done in connection with criminal proceedings. The government task force has been in place since mid-March. According to the report for the cabinet, one focus is currently on freezing assets. It is currently about several hundred people and organizations. Here the task force should take up and solve individual cases, coordinate the asset determination and improve the exchange of information. Individual information would be bundled centrally and, if in doubt, quickly passed on to the state secretaries in the ministries.