Just in time for the two-year anniversary of the first German Lobbying Register at Federal Level in 2022, the first reform of the German Lobbying Register Act has been enacted. In the past two years, over 6,000 individuals and organizations registered as lobbyists in the publicly accessible register and provided information about their financial lobbying expenditure, on whose behalf they are advocating, and which personnel is deployed for it.
In this blog post, we look at the forthcoming legislative changes, what this means for lobbyists who are already registered, and which entities might now fall within the scope of the Lobbying Register Act for the first time. In addition, we shed some light at the initiatives at the European level to create harmonized rules on the transparency of interest representation conducted on behalf of third countries.
I. Recap: The German Lobbying Register Act
The German Lobbying Register Act for lobbying activities on the German Federal Level came into full effect on 1 March 2022. In our previous blog post, we outlined the key aspects of the 2022 Lobbying Register Act and its disclosure requirements for companies in scope.
The 2022 Lobbying Register Act was initially welcomed by a vast number of politicians and NGOs but was soon met with increasing criticism and calls for more transparency, such as including contacts with government officials at a lower hierarchical level in its scope and obligating entities to provide more precise information. In light of this, the then-new German Federal Government announced plans to refine and strengthen the 2022 Lobbying Register Act shortly after its enactment. These plans materialized in the Lobbying Register Amendment Act (Gesetz zur Änderung des Lobbyregistergesetzes, official English translation / accompanying remarks by Federal Parliament), which was published in the Federal Gazette on 18 January 2024. Its provisions will take effect from 1 March 2024 on.
While the amendments coming into effect now address a variety of earlier criticism, the new regulations are also met with resistance from the industry, particularly due to the significant increase in bureaucratic burdens which is expected due to the tightened regulation.
II. Key changes: A new Lobbying Register platform and increased obligations
The 2024 Lobbying Register Act introduces a new Lobbying Register platform, enlarges the scope of its application, and tightens transparency obligations, in particular regarding the information and documents which have to be disclosed. In addition, its regulations are now more closely aligned with the EU Transparency Register, which was introduced in 2011 at the European level.
1. A new Lobbying Register platform
Most notably, a new Lobbying Register platform administered by the Federal Parliament as the competent register authority is introduced to accommodate the new mandatory information required under the 2024 Lobbying Register Act. Registered entities have time during a transitional period from 1 March 2024 until 30 June 2024 to transfer their entries to the new register (Section 8(2)). Migration to the new platform is expected to be possible from 1 March 2024 but the old entries can be retained and updated until the end of the transitional period.
The register authority stated that they are working to make the migration process should be as easy as possible for the registered entities. For example, existing information can be migrated to the new platform and only has to be confirmed. In addition, guidance information will be provided for new information to be included following the changes to the Lobbying Register Act (see below 3. and 4.).
Consequences in case the entries are not moved to the new register until 1 July 2024 are significant: Representatives lose their status as registered lobbyist (Section 8) and are moved to the list of previous lobbyists (Section 3(5)). They also may be subject to a fine for inaccurate information (Section 7).
2. The more (registered lobbyists) the merrier
Among other slight changes to the scope of the 2024 Lobbying Register Act, the most significant update is that now contacts down to the level of Head of Unit in Federal Ministries can trigger the obligation to register. So far, this was the case only when contacting representatives at the level of Deputy Director-General and above. Given that many decisions and details of federal government bills are decided at a lower level, this is a significant change to the scope.
Furthermore, the threshold of triggering the registration obligation has been lowered to more than 30 individual lobbying contacts (where it previously has been 50) and it has been clarified that clients of interest representatives have to register themselves (Section 2(1) no. 4 and 5).
3. Tell me what you’re lobbying for
Section 3 of the 2024 Lobbying Register Act lists the information which have to be disclosed by registered entities in their register entries and has seen the most changes during the legislative process.
Individuals obligated to register are now required to make more precise statements on their lobbying activities and have to describe their current, planned, or intended legislative initiatives at the German Federal Level or European level in more detail for which they advocate vis-à-vis the German Federal Government or Parliament. The mandatory description to be provided by registered lobbyists must now explicitly focus on how lobbying activities are conducted and cannot be limited to a description of the general business activities of the entity.
More crucially, and for the first time, all fundamental statements and expert opinions submitted to the Federal Parliament, the Federal Government, or the Federal Ministries related to lobbying activities must be published and uploaded to the new register. Such statements and opinions may include emails, text messages, or similar means through which fundamental arguments are conveyed for the first time. The Lobbying Register Act itself provides only limited details of when an argument or statement can be considered ‘fundamental’. In its recently published guidance comment on the updated Act, the register authority at the Federal Parliament stated that main arguments or draft proposals on specific legislative initiatives, in particular in favor or against an amendment, abolition or adoption of a law, would fall in this category.
The disclosed regulatory initiatives and uploaded statements are envisioned to remain publicly accessible for eight years, even if lobbyists de-register. The purpose of such a database is to make all statements browsable for the public with a digital tool, which is expected to shift the focus of the Lobbying Register from a primarily figures-based tool to an additional content-related level. This aims to increase the public trust in the legitimacy of political decision-making processes.
Besides these crucial changes, there are several other pieces of information which now have to be disclosed, such as the total number of people involved in lobbying as full-time equivalents (but only if they spend more than 10% of their working hours on lobbying) or the address of the lobbyist's representative office in (if such an office is operated).
4. Show what you are made of
Another significant update addresses the so called ‘revolving door effect’. This transfer of jobs between politics and administration to the private sector has been particularly criticised by NGOs and civil society groups.
All natural persons who directly represent interests for registered lobbyists must now be disclose if they currently are or have been in the previous five years a member of the Parliament or have worked for parliamentary groups, members of the Parliament, or institutions of the Federal Administration. For registered organisations, this means that they must check with all natural persons who directly represent interests on their behalf whether they have held such a position in the last five years. The information must then be published in the register without undue delay.
Furthermore, and in line with the EU Transparency Register, detailed information on the resources provided for client representation must be disclosed, including the financial amount received for each individual mandate. Interest representatives who act on behalf of others must name their contracting entity, the lobbying activities carried out on their behalf, and the amount of remuneration received for a specific mandate. This aims at shedding light on non-transparent agency relationships, so called ‘subcontracting’.
For organisations funded by donations, a noteworthy change is that in the identities of their donors have to be disclosed if the donations received from that donor exceed EUR 10,000 and provided that the contributions by the donor constitute at least 10% of the total annual donations of the organisation. During a transitional period, identities of donors for donations made before 1 March 2024 may be anonymised.
Finally, registered lobbyist cannot refuse anymore to disclose information on financial expenditures for lobbying activities, on donations, or on any other financial information. So far, more than 500 registered entities have made use of this option and opted to refuse disclosure of certain financial information, which will no longer be possible.
5. Further changes
The amendments to the Lobbying Register Act include a new general deadline for updating information in the register. Besides few exceptions, updates shall always be entered immediately, i.e. ‘without undue delay’. If a deadline is not met, this constitutes an administrative offence and may be punished with a fine of up to EUR 50,000 (Section 7(1) no. 1).
The same applies to companies’ annual financial statements. While these previously had to be uploaded within six months after the end of the financial year for the previous financial year, they now must be published immediately after completion, in any case six months after the end of the financial year. There are certain exceptions to this ad-hoc deadline, for example, information on the total number of employees working in lobbying, new memberships, or on the financial expenditure for lobbying activities in the previous year.
Another mandatory information is a staggered indication of the lobbyist’s sources of funding by means of an annual categorisation of the five listed sources (corporate activity, donations, and others), from the most lucrative to the least lucrative, without specifying the exact amounts.
III. Developments at EU level
There have been initiatives at the EU level to increase transparency of lobbying activities as well: On 12 December 2023, the European Commission published a proposal for a new EU Directive aimed at establishing harmonised requirements in the internal market for the transparency of interest representation conducted on behalf of third countries, commonly known as the ‘EU Foreign Agents Act’.
According to the draft, all EU member states are expected to set up a separate register for third country lobbyists. Such lobbyists may be providers of interest representation services, including private organisations (e.g., consultancies) and non-profits organisations (e.g., NGOs or research institutes), or individuals whose principal or occasional occupation involves influencing decision-making processes at the national or European level on behalf of a third-country entity. According to the draft, a third-country entity includes any governmental or public authority of a state outside the EU or the EEA, as well as any public or private entity whose actions can be attributed to such authority. Importantly, the registration obligation is not triggered by third-country funding but by any form of interest representation activity to a third-country entity, whether remunerated or not (cf. Article 2 no. 2, stating that such activity would only ‘normally be provided for remuneration’).
Lobbying activities covered by the draft Directive are listed in Article 2(1) of the proposal and include a wide range of activities, e.g. organising meetings, preparing policy and position papers, as well as opinion polls and surveys. If enacted, this would constitute a significant expansion of the scope surpassing the conventional understanding of third-country lobbying.
The draft Directive is still at an early stage and will likely be subject to changes during the course of the legislative process, but, if enacted, will harmonise the transparency obligations for third country lobbying activities across the Union. In any case, they should be closely monitored.
IV. Urge to conform: What should companies do now?
The necessary measures to be taken by companies to prepare for the updated obligations depend on the individual circumstances of each entity. However, there are some actions which every company should consider now:
1. For companies not yet registered:
- Assess whether the register obligation now applies. Companies conducting lobbying activities that previously were beneath the threshold for registering in the Lobbying Register, may now be subject to its obligations.
- Prepare for disclosure of information: If companies are now newly obligated to register, they should establish internal structures and procedures to ensure compliance with the Lobbying Register Act. Due to the increased disclosure obligations, gathering all necessary information and preparing the mandatory descriptions may require significant time.
2. For companies already registered:
- Consider necessary actions for migration to the new platform. It is crucial for all registered lobbyists to prepare for the migration process and to make themselves familiar with the new platform.
To facilitate this process, the register authority has decided that the confirmation document for the entry will only have to be signed by one person, who can be designated by the organisation. This is particularly important for organisations that have several authorised representatives which now can decide themselves who signs the confirmation document. - Check disclosed information, update, and gather missing information. Outdated information and now newly required information should be diligently collected and entered in the new platform by 30 June 2024. For example, all natural persons listed in the register entry should be asked whether a mandate, office or function in the Federal Parliament, Federal Government or Federal Administration currently exists or has existed in the last five years.
Entities which have previously declined to disclose certain information, such as information on the lobbying expenditures or donor names, may no longer do so and are required to disclose this information.
3. For all companies:
- Due to the initiatives at European level, companies may already determine whether they fall under the scope of a potential future register for third-country lobbying. As such, it should be assessed whether lobbying activities outside the EU or EEA are likely to influence the decision-making process at any national or European level.
Freshfields Bruckhaus Deringer advises clients on the German Lobbying Register Act and can also conduct the entry if desired. In addition, Freshfields Bruckhaus Deringer’s multinational public law practice advises on Lobbying Register-related questions in inter alia France, the United Kingdom and on European Union level.
Please contact our Regulatory and Public Affairs teams for further information.
