Article Germany: Transparency Rules for Members of Parliament Tightened

On October 19, 2021, the Act to Enhance Transparency Rules for Members of the German Bundestag (parliament) (Transparency Act) entered into force in Germany. Among others things, it amends the rules on disclosing income and ownership interest in companies, prohibits paid lobbying activities, and increases the penalties for bribing members of parliament and for accepting such bribes.

Content of the Transparency Act

The Transparency Act amends the Members of the Bundestag Act (Abgeordnetengesetz, AbgG) and incorporates the parliamentary Code of Conduct into the law. It prohibits members of parliament from accepting money or other types of material benefits for lobbying the federal government or parliament on behalf of third parties, for consultancy work, or for lectures in connection with their parliamentary work. Misusing their office for personal gain is punishable by an administrative fine, and any monetary gain must be paid back. Accepting compensation for expenses for volunteer work is still allowed. (AbgG § 44a new, § 51 new.) In addition, members of parliament may not accept monetary donations of any kind. (§ 44a, para. 2, sentence 5 new.) Other types of donations are possible subject to the general restrictions on donations to political parties. (§ 48 new.)

Furthermore, the act tightens disclosure requirements. Under the new rules, members of parliament must disclose the exact income from secondary activities if it exceeds either 1,000 euros a month (about US$1,161) or 3,000 euros a year (about US$3,484). Granting options to obtain shares in a company or similar financial instruments are equivalent to income. Members of parliament must also disclose ownership interest in companies if it exceeds 5%. Indirect holdings are included. Under the former rules, the threshold was an ownership interest of 25%. (§ 45 new.)

Lastly, the Transparency Act amends the Criminal Code (Strafgesetzbuch, StGB). The penalty for bribing a member of parliament and for accepting a bribe is changed from a custodial sentence of up to five years or a fine to a custodial sentence of one to 10 years. In less severe cases, the punishment will be six months to five years. (StGB § 108e new.)

Reasons for the New Rules

One of the reasons for tightening the transparency rules was the “mask scandal” in March 2021. Several German politicians were investigated, and subsequently resigned, over allegations that they had received payments in return for arranging procurement contracts for face masks to fight the COVID-19 pandemic. In addition, the amendments to the current disclosure rules implement recommendations made by the Group of States against Corruption (GRECO) in its Fourth Round Evaluation Report on Germany. In this report, GRECO recommended extending disclosure requirements to include, among other things, shareholdings in enterprises below the current thresholds. (Explanatory Memorandum at 1.)

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Germany: Transparency Rules for Members of Parliament Tightened
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