Reporting Obligation for International Capital Transactions
For many companies, international trade relations and cross-border transactions are routine. However, international trade also entails various reporting obligations. Violations of these obligations can result in substantial fines. One way to address such violations is by submitting a self-report in accordance with the Foreign Trade and Payments Regulation (AWV).
The AWV stipulates a reporting obligation for international capital transactions exceeding 12,500 euros, according to § 67. This applies to both outgoing and incoming payments. The reporting obligation aims to secure the financial system. Reports must be submitted as a general requirement, not only when there is suspicion of a crime, such as money laundering, explains attorney Michael Rainer, a contact in business law at the law firm MTR Legal Rechtsanwälte.
Fines for Breaching AWV Reporting Obligation
The AWV report must be submitted to the Bundesbank by the seventh day of the following month. If the report is submitted late, it is considered as not submitted. Violations of the AWV reporting obligation can result in fines. This also applies if the report is incorrect or incomplete.
Not only cash payments but also transfers, direct debits, foreign checks, or settlements with foreign customers are subject to reporting if the threshold of 12,500 euros is exceeded. Even if there are no reportable transactions, this should be communicated to the Bundesbank.
Companies and legal entities should take the reporting obligation seriously. Besides regular audits, violations can also be discovered during company inspections. Fines of up to 30,000 euros per violation can be imposed for breaches of the reporting obligation. Therefore, reportable companies should act immediately if they have not reported capital transactions exceeding 12,500 euros. They have the option to submit a self-report.
Avoiding Fines and Prosecution
By submitting a self-report, fines or criminal proceedings can be avoided. However, the self-report must meet certain requirements to be effective. It must be voluntary and complete, including all relevant information and data about the unreported capital transactions. An incomplete self-report can render it ineffective, leading to potential fines. Moreover, the self-report must be submitted voluntarily, meaning that the relevant authority should not have already initiated investigations regarding the violation.
The self-report must be made in writing and submitted to the relevant authority, not the Bundesbank.
The self-report should accurately describe the unreported transactions and explain why the transactions were not reported on time.
Self-Report Can Lead to Immunity from Prosecution
If the self-report is submitted on time and includes all circumstances and relevant information, it can lead to immunity from prosecution. The individual or entity will then not face fines or other legal consequences. However, immunity is only possible if the reporting obligation violation was committed negligently. It should also be demonstrated that adequate measures have been taken within the company to prevent such violations in the future.
To ensure the self-report meets these requirements, a knowledgeable attorney should be consulted. An attorney will know how to structure the self-report to achieve immunity from prosecution. Additionally, it should be noted that the self-report may lead to subsequent reviews of previously unreported transactions by the authorities.
Taking the Right Action
The self-report under the AWV is an important tool to avoid sanctions against companies and individuals who have failed to meet their reporting obligations. It is crucial that the self-report is not submitted to the Bundesbank. The Bundesbank should not be informed about the oversight by phone or email either. Such actions are not considered self-reports and can, at worst, lead to the discovery of the offense by the authorities, making a self-report no longer possible.
MTR Legal Rechtsanwälte is your competent partner for creating an effective self-report and other business law matters.
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