New German Government Plans Reforms in White Collar and International Trade Law
Client Alert | May 8, 2025
The coalition agreement includes noteworthy planned changes in the area of white collar and international trade law that identify trends that will shape the near-term future of businesses operating in Germany and the EU.
On May 6, Friedrich Merz was elected Germany’s new Chancellor, marking the start of the new legislative period. The incoming government – formed by a coalition of the center left and right parties CDU, CSU, and SPD – recently published its coalition agreement.[1]
The coalition agreement outlines the common legislative goals of the German Government for the next four years.
Enforcement proceedings in money laundering cases shall become more efficient
- In the area of financial crime, federal-level competencies will be consolidated. Cooperation and information exchange between the federal and state governments, as well as with national and international organizations, the EU, and the European Anti-Money Laundering Authority (AMLA), are to be improved.[2]
- Improvements in anti-money laundering efforts are planned, particularly in light of the upcoming evaluation by the Financial Action Task Force (FATF).[3] These plans are not entirely new initiatives, as they had already been put forward by the previous government in light of Germany’s poor FATF assessment.
- Gaps in the German Transparency Register, which is a central database that records information on the beneficial owners of legal entities, are to be closed.[4]
- Legal transactions by legal entities exceeding a net amount of EUR 10,000 may not be carried out by parties subject to anti-money laundering obligations if one or more beneficial owners cannot be identified.[5]
Lowering the thresholds for asset seizures shall help fighting organized crime
- An administrative procedure for asset investigation is to be introduced, with the aim of securing suspicious high-value assets where a legal origin cannot be clearly demonstrated.[6]
- Existing asset seizure instruments are to be further developed and supplemented by a procedure for confiscating assets of unclear origin.[7]
- The fight against organized crime is to be intensified by fully reversing the burden of proof in the confiscation of assets of unclear origin.[8]
EU-Directives on Corporate Crimes shall be implemented, but initiatives to reform German law relating to Corporate Crimes will not be pursued
- Unlike the previous coalition agreements[9], the new agreement includes neither plans to regulate internal investigations nor to introduce any legal framework for corporate criminal law. However, it is likely that the EU Anti-Corruption Directive will have to be implemented during this legislative period, which may result in relevant changes in these two areas.
Supply Chain Due Diligence Requirements shall be brought in line with updated EU-Directives and the German Supply Chain Due Diligence Act will be repealed
- The German Supply Chain Due Diligence Act (LkSG) is to be repealed. It is planned to replace it with a new “International Corporate Responsibility Act” designed to implement the European Corporate Sustainability Due Diligence Directive (CSDDD) in a low-bureaucracy and enforcement-friendly manner.[10]
- The reporting obligations under the LkSG are to be abolished immediately and permanently.[11]
- It is planned that existing due diligence obligations will not be sanctioned, except for severe human rights violations, until the new law comes into force.[12]
FDI and Export Control topics will remain high on the agenda, while making processes more efficient
- The German Foreign Trade Act is to be revised. Screening and licensing procedures are to be made faster, simpler, and more practical. Foreign investments that conflict with national interests – particularly in critical infrastructure and strategic sectors – are to be effectively blocked.[13]
- The effective national implementation of sanctions due to Russia’s war of aggression is to continue to be ensured. The EU’s plans to impose tariffs on fertilizer imports from Russia and Belarus are to be endorsed.[14]
- Export licensing procedures are to be simplified and accelerated, with the aim of a paradigm shift in German international trade law. Comprehensive checks are to be replaced by targeted checks on a random basis, supported by heavy penalties for violations. Within the scope of this system, prior export authorizations would no longer be required.[15]
- Germany’s China Strategy is to be revised in accordance with the principle of “de-risking”.[16]
To what extent these plans will be implemented in detail remains to be seen in the next few months.
[1] Coalition Agreement of the 21st legislative period, can be found on the websites of the three parties CDU: here; CSU: here; SPD: here; and the German Bundestag: here.
[2] Coalition Agreement of the 21st legislative period, para. 1548 et. seq.
[3] Ibid., para. 1545 et. seq.
[4] Ibid., para. 1550.
[5] Ibid., para. 1550 et seq.
[6] Ibid., para. 1553 et seq.
[7] Ibid., para. 1556 et seq.
[8] Ibid., para. 2261 et seq.
[9] Coalition Agreement of the 19th legislative period, p. 126; Coalition Agreement of the 20th legislative period, p. 111.
[10] Coalition Agreement of the 21st legislative period, para. 1909 et. seq.
[11] Ibid., para. 1911 et seq.
[12] Ibid., para. 1913 et seq.
[13] Ibid., para. 275 et seq.
[14] Ibid., para. 287 et seq.
[15] Ibid., para. 290 et seq.
[16] Ibid., para. 297 et seq.
Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. If you wish to discuss any of the matters set out above, please contact the Gibson Dunn lawyer with whom you usually work, any leader or member of Gibson Dunn’s White Collar Defense & Investigations or International Trade Advisory & Enforcement practice groups, or the authors in Munich:
Benno Schwarz (+49 89 189 33 210, [email protected])
Katharina Humphrey (+49 89 189 33 217, [email protected])
Nikita Malevanny (+49 89 189 33 224, [email protected])
Karla Böltz (+49 89 189 33 219, [email protected])
Annabel Dornauer* (+49 89 189 33 463, [email protected])
*Annabel Dornauer is a trainee attorney in Munich and is not admitted to practice law.
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