German Parliament Approves Amendment to Foreign Trade and Payments Act
Berlin, November 27, 2024: The German Bundestag has passed a bill amending the Foreign Trade and Payments Act (AWG) and other related regulations. The new law, known as “20/13958,” aims to strengthen Germany’s foreign trade controls and enhance its ability to respond to emerging economic threats.
Key Provisions of the Amendment:
1. Expanded Export Controls:
- The amendment introduces new export controls on certain dual-use goods, technologies, and services that could potentially be used for military or malicious purposes.
- These controls will be implemented through a revised export list and licensing requirements.
2. Enhanced Screening Mechanisms:
- The law establishes a centralized screening mechanism for foreign direct investments in critical sectors of the German economy.
- This mechanism will allow the government to review and approve or block investments that pose a potential risk to national security or public order.
3. Improved Information Sharing:
- The amendment strengthens the exchange of information between relevant authorities involved in foreign trade controls.
- This will improve coordination and ensure a consistent approach to enforcement.
4. Increased Penalties:
- The law increases the penalties for violations of foreign trade regulations.
- This includes fines and prison sentences for individuals and corporations that knowingly and intentionally circumvent export controls or engage in unauthorized financial transactions.
Background and Motivation:
The AWG amendment was prompted by concerns over potential threats to German security and economic interests. The government identified a need to update and strengthen its foreign trade controls to address evolving risks in the global trade environment.
Significance of the Amendment:
The new law will provide Germany with a more comprehensive and effective framework for monitoring and regulating foreign trade activities. It is expected to:
- Enhance the country’s ability to protect national security and critical infrastructure.
- Safeguard the integrity of the German financial system.
- Foster responsible foreign trade practices and prevent the proliferation of sensitive goods and technologies.
The amendment is part of a broader effort by the German government to modernize its trade controls and adapt to the challenges of the 21st century economy. It is expected to come into force on [Date].
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