Wirecard Committee of Inquiry

Wirecard Committee of Inquiry

In the Wirecard case, a committee of enquiry of the German Bundestag is to examine the case in more detail this autumn. Due to the increasing number of cashless transactions and therefore the considerable impact of the financial scandal on the population, a committee of enquiry was necessary to clarify the case thoroughly and completely.

The Munich public prosecutor’s office is currently investigating Wirecard for commercial gang fraud, after air bookings of 1.9 billion euros were uncovered in June. It is assumed that the payment service provider has been reporting fictitious profits since 2015. The focus here is not only on Wirecard itself, but also on the responsibility of various state institutions accused of failing in connection with the Wirecard affair.

Among other things, the Bavarian authorities, more precisely the Financial Intelligence Unit (FIU) of the customs authorities, were accused of having failed to take further action against suspicious reports of Wirecard transactions, with the result that the public prosecutor’s office did not follow up on them either. If these investigations had not been terminated prematurely, it might have been possible to uncover the scandal earlier.

Furthermore, the auditors, especially EY, are also to be an important topic in the committee of enquiry, as is the question of why Wirecard remained listed in the Dax despite indications of irregularities.

Lastly, the Bafin’s and the Bavarian authorities’ money laundering checks on Wirecard should also be investigated. Money laundering supervision was omitted here for the reason that the competent authorities had not classified Wirecard-AG as a financial enterprise to be checked.

To enable the Committee to begin its work and meet the need for clarification, the political groups must draw up a mandate of enquiry which requires a majority of one quarter of all MEPs. With federal elections due in autumn 2021, the opposition in particular insists on a quick agreement.

We keep you up to date. Regarding the Wirecard scandal in general we refer to our article Wirecard insolvency.

Are you affected by the scandal? Help is available right here!

    Wenn Sie die im Kontaktformular eingegebenen Daten an uns übersenden, erklären Sie sich damit einverstanden, dass wir Ihre Angaben für die Beantwortung Ihrer Anfrage bzw. Kontaktaufnahme verwenden. Wir benötigen Ihre Emailadresse, um Ihre Anfrage beantworten zu können. Weitere Angaben sind keine Pflichtangaben. Die abgesendeten Daten werden verschlüsselt übertragen und nur zum Zweck der Bearbeitung Ihres Anliegens verarbeitet. Weitere Informationen auch zu Widerrufhinweisen finden Sie in unserer Datenschutzerklärung


    Ways out of real estate financing

    Ways out of property financing – No early repayment fee in case of insufficient information on the calculation of the VFE

    Anyone who terminates their property financing prematurely must regularly pay a so-called prepayment penalty. Consumer protectors have been doubting the legality of the amount of compensation for a long time and have only recently been confirmed in their assessment by a recent judgement of the OLG Frankfurt, Ref.: 17 U 810/19.

     

    What was the disputed case about?

    The defendant – a Frankfurt credit institution – had previously charged the borrower an early repayment fee. He now defended himself in court and was upheld by the Frankfurt Higher Regional Court in the second instance. In the contested case, the defendant infringed its legal obligations to provide information. Thus, at no time was the borrower under any obligation to pay the early repayment penalty and the sums already paid could be recovered.

     

    What are the legal obligations to provide information?

    The judgment does not fundamentally attack the practice of early repayment fees. A bank should still have the right to an “appropriate early repayment penalty for the loss directly related to the early repayment”. However, the judgment should now strengthen the position of the borrower by imposing correspondingly high requirements on an early repayment indemnity clause.

     

    The contractual details for the calculation of the early repayment fee should therefore be inadequate within the meaning of § 502 para. 2 No. 2 BGB if they are “not clear, concise, understandable and precise” for the borrower. The provision applies both to general consumer loan agreements (see Art. 247 §7 (1) No. 3 EGBGB) and real estate consumer loan agreements (see Art. 247 §7 (2) No. 1 EGBGB). The consumer could therefore expect a differentiated description in the contract of the procedure for calculating the early repayment fee. Only the presentation of the calculation in its main features does not meet this requirement.

     

    The disputed loan agreement provided for interest to be paid on the prematurely repaid loan capital on the basis of the interest rates of the corresponding mortgage Pfandbriefe available on the capital market, “insofar as Pfandbriefe with corresponding maturities with matching maturities are available”. It remained open, however, how the calculation would be made if no Pfandbriefe were available, for example with maturities of less than one year. This is incomprehensible to the consumer and he cannot therefore draw any conclusions about the calculation of the early repayment penalty in his particular case. Nor can traceability be restored retrospectively by, for example, an information sheet on the calculation of the early repayment penalty sent at a later date.

     

    It is estimated that hundreds of thousands of contracts contain insufficient information to calculate the early repayment fee, which means that borrowers now have the possibility to defend themselves against an early repayment fee or to reclaim payments already made.

    Have you also paid or been asked to pay early repayment fees? Or would you like to terminate your loan prematurely and have not yet done so because of a possible early repayment penalty?

    As a law firm specialising in banking and capital market law, we would be happy to review your loan agreement and give you an initial assessment of possible further action. If you are interested, please contact us by e-mail, using the form on our website or by telephone.

      Wenn Sie die im Kontaktformular eingegebenen Daten an uns übersenden, erklären Sie sich damit einverstanden, dass wir Ihre Angaben für die Beantwortung Ihrer Anfrage bzw. Kontaktaufnahme verwenden. Wir benötigen Ihre Emailadresse, um Ihre Anfrage beantworten zu können. Weitere Angaben sind keine Pflichtangaben. Die abgesendeten Daten werden verschlüsselt übertragen und nur zum Zweck der Bearbeitung Ihres Anliegens verarbeitet. Weitere Informationen auch zu Widerrufhinweisen finden Sie in unserer Datenschutzerklärung


      Implementation of the 5th EU Money Laundering Directive

      Impact of the German implementation of the 5th EU Money Laundering Directive 2018/843


      On 1 January 2020 the Act Implementing the Amending Directive to the Fifth EU Money Laundering Directive came into force.

      The new law contains numerous amendments, particularly to the Money Laundering Act (MLA) and to the transparency register. This should lead to better detection and prevention of money laundering and terrorist financing.

      The following are some of the key changes introduced by the EU Money Laundering Directive:

      First of all, there is an important change regarding so-called crypt values. These are digital representations of a value that are not issued or guaranteed by any public body or central bank. They do not have the legal status of currency or money, but are nevertheless accepted in circulation as a means of exchange or payment or are used for investment purposes. They are stored, transmitted and traded electronically.

      Crypt values are accepted as financial instruments under the new law. In addition, such companies that carry out crypto-custody operations are recognised as financial services institutions. Crypto-custody transactions involve the safekeeping, administration and protection of crypto-values or private cryptographic keys which serve to store, hold or transfer crypto-values for others. These companies will then become undertakings pursuant to § 2 Abs. 1 No. 2 AMLA and fall under the financial sector regulated and supervised by BaFin (Federal Financial Supervisory Authority).

      In addition, lawyers also become obligated under the MLA if they are involved in M&A or tax advice. They have a duty to identify their clients under money laundering law where necessary.

      Real estate agents are subject to the new regulation to the extent that they become obligated under the MLA not only for commercial brokerage in the context of the purchase and sale of real estate and rights equivalent to real estate but also for the commercial brokerage of rental and lease agreements and with regard to commercial premises and flats. This always applies in this area within the framework of the brokerage of sales contracts, but in the case of rental and leasing contracts, only from a net cold rent of 10,000 EUR.

       

      In addition, art intermediaries and art warehouse keepers with storage in duty-free areas for transactions above EUR 10,000 are also affected by the new obligation.

      Finally, courts, authorities, corporations and institutions under public law are also obliged to fulfil identification and reporting obligations under money laundering law in public auctions, insofar as cash payments from EUR 10,000.00 per auctioned item are involved. It is also necessary to cooperate with the Financial Intelligence Unit (FIU).

      On the other hand, collection service providers and such holding companies which only have holdings in companies outside the credit institution, financial institution and insurance sectors and which do not engage in activities beyond the tasks associated with the management of the holding district are no longer regarded as obligated parties under the MLA.

      In all these areas, obligations under money laundering law, general duties of care and also risk management are extended, which can be seen in detail in the MLA. For example, when establishing a new business relationship with a registered partnership, legal entity or trust, obligated parties will have to provide proof of registration in the transparency register or obtain an extract from the counterparty. In addition, the due diligence obligations will be strengthened in the event of participation by a so-called “high-risk state”, i.e. one with an increased risk of money laundering, or by a natural or legal person resident there. Furthermore, the obligation of professional secrecy, in particular of notaries and lawyers in the field of real estate acquisition, has been extended.

      Under the new law, the transparency register is available for inspection by all members of the public, even if no legitimate interest is shown. The persons concerned will not be informed about the disclosure, but the body keeping the register may request information about it. Here, the information on the inspection is transmitted in an anonymised version. However, there is still the possibility to limit access, provided that there is an interest worthy of protection.

      To improve the data quality of the transparency register, an obligation to report any inconsistencies between information contained in the transparency register and its own information on beneficial owners has also been introduced. Failure to comply with this obligation may result in the imposition of a fine.

      Suspicion reports can now also be considered as an exonerating voluntary declaration, provided that the conditions set out in § 43 Abs. 4 GwG are fulfilled.

      Finally, the list of fines has also been considerably extended, which is reflected in particular in the transparency register. However, the previous standard of liability was largely retained; only in the case of infringements of selected essential basic obligations under money laundering law is negligent conduct sufficient, which is the basis for the adapted list of fines.

      The changes will also strengthen theFinancial Intelligence Unit (FIU) in cooperation with the Public Prosecutor’s Office, so that obligated parties will have to register there electronically – regardless of whether a suspicion report is submitted.

       

      In summary, all obligated parties should review their internal compliance structures and processes with regard to the new regulations and, if necessary, adapt them in view of the objectives pursued by the new law. When submitting suspicious activity reports to the FIU, the requirements of a self-denunciation according to § 261 para. 9 p. 1 no. 1 StGB must be fulfilled.

      Für weitere Fragen stehen wir Ihnen natürlich gerne zur Verfügung.

        Wenn Sie die im Kontaktformular eingegebenen Daten an uns übersenden, erklären Sie sich damit einverstanden, dass wir Ihre Angaben für die Beantwortung Ihrer Anfrage bzw. Kontaktaufnahme verwenden. Wir benötigen Ihre Emailadresse, um Ihre Anfrage beantworten zu können. Weitere Angaben sind keine Pflichtangaben. Die abgesendeten Daten werden verschlüsselt übertragen und nur zum Zweck der Bearbeitung Ihres Anliegens verarbeitet. Weitere Informationen auch zu Widerrufhinweisen finden Sie in unserer Datenschutzerklärung


        Company reorganisation - UPDATE!

        Corporate restructuring through the insolvency plan procedure

        Corona-induced wave of insolvencies expected

        The Corona crisis is causing unbearable financial losses for many companies, and despite the “protective shield” that has been built up as a result, many have already reached the point of insolvency.

        Nevertheless, the number of insolvency applications has so far been surprisingly low: the reason for this is the law introduced in March to mitigate the consequences of the COVID 19 pandemic in civil, insolvency and criminal proceedings.

        The latter has suspended the obligation to file for insolvency until 30 September 2020.

        In principle, there is an obligation to file for insolvency pursuant to Section 15a of the German Insolvency Code (InsO). An application must be made immediately after the occurrence of insolvency or overindebtedness, but at the latest within three weeks. Insolvency exists if the debtor is no longer able to fulfil the due payment obligations (section 17 InsO). Overindebtedness exists if the assets no longer cover the existing liabilities (section 19 InsO). The following persons are entitled to file an application to open insolvency proceedings pursuant to § 15 para. 1 InsO in addition to the creditors, each representative body, or each personally liable partner, as well as each liquidator Applicants are generally granted a test period of 3 weeks. However, this is an individual decision.

        As a result, the changeover under the new law means that for countless companies, their insolvency will be delayed until the autumn, even though they have long been insolvent. As a consequence, the mountain of debt of these companies only grows even more. The courts therefore expect an extreme wave of insolvency applications in autumn.

        Have insolvency plan proceedings checked!

        One way to overcome the crisis is the insolvency plan procedure as a strategy for corporate restructuring.

        Within this framework, the parties concerned can make individual arrangements compared to the regular procedure under the Insolvency Act in order to possibly secure their business. Thus, in addition to the reorganisation or the transferred reorganisation, the liquidation of the company or a mixed form of both can be aimed for. Restructuring under company law or a possible transfer of shares to the creditor are also possible with the implementation of an insolvency plan procedure and can help through the crisis.

        When designing the plan, the creator has many different options available, so that an individual solution can be created for each company. Among other things, creditors can be satisfied in various ways, for example by a quota payment from existing assets or from later income. As long as the affected creditors are not worse off by the insolvency plan than they would be in the regular insolvency proceedings, the structuring options are free and can also be combined.

        Because the insolvency plan is part of the regular insolvency proceedings, an insolvency petition must first be filed. As a matter of principle, the latter only has to meet the usual requirements mentioned above. Only to the extent that a protective shielding procedure is to be linked to the insolvency or the planning procedure is to be carried out under one’s own responsibility do other special requirements have to be met.

        The plan procedure is then applied for at the competent court upon presentation of the insolvency plan. Such submission may be made by the insolvency administrator or the insolvency debtor. It is also possible to commission the insolvency administrator by the creditors’ meeting to draw up an insolvency plan.

        How do you go about this?

        The plan submitted shall, where required by law, contain a descriptive and a formative part.

        The purpose of the former is to open and evaluate the consequences of the plan for those affected by the plan so that they can give their necessary consent. A comparative calculation shows the creditors to what extent their chances of satisfaction are improved by the plan. In the end, the descriptive part thus contains all the necessary information on the planned measures.

        The formative part then shows in a precise manner how the changes, i.e. the deviations from the regular insolvency proceedings, are to be made in concrete terms. Various measures under company law are possible, such as capital increases or reductions, the payment of contributions in kind or the encroachment on shareholders’ interests. For example, a so-called “debt-equity-swap” can be considered, in which creditors’ claims are converted into shares. Conversion measures or the change of legal form are also possible, among other things.

        After a preliminary examination by the insolvency court, the creditors vote on the insolvency plan. This is what legitimizes it. If the required majority is reached here, the court shall confirm the insolvency plan which was adopted by the creditors’ meeting. The subsequent confirmation order finally allows the insolvency plan to become effective. The planned regulations will be implemented. The effect shall also apply to such creditors who have not agreed to the insolvency plan or who have not filed their claims.

        We advise you in all stages of the proceedings.

        You are welcome to contact us if such an insolvency plan procedure can be considered as a solution for your company during the crisis. Together with you, we will create an individual plan that is best suited to your needs.

        UPDATE!


        Partially extended suspension of the obligation to file for insolvency

        Following the suspension of the obligation to file for insolvency until 30 September 2020 as a result of the Corona crisis, many expected a considerable wave of insolvencies in autumn.

        The suspension has now been partially extended even further. For the insolvency reason of over-indebtedness, the obligation to file for insolvency is now suspended until 31 December 2020.

        However, this does not apply to the reason for the insolvency: here it remains that the insolvency application must be filed by 30 September at the latest. This is because insolvent companies have less chance of averting insolvency permanently than those that are merely over-indebted. In this way, the necessary confidence in economic transactions should be maintained.

          Wenn Sie die im Kontaktformular eingegebenen Daten an uns übersenden, erklären Sie sich damit einverstanden, dass wir Ihre Angaben für die Beantwortung Ihrer Anfrage bzw. Kontaktaufnahme verwenden. Wir benötigen Ihre Emailadresse, um Ihre Anfrage beantworten zu können. Weitere Angaben sind keine Pflichtangaben. Die abgesendeten Daten werden verschlüsselt übertragen und nur zum Zweck der Bearbeitung Ihres Anliegens verarbeitet. Weitere Informationen auch zu Widerrufhinweisen finden Sie in unserer Datenschutzerklärung