Monthly Dose of Germany: May 2026

Article by: Dr. Mathias Hanten and Gerhard Dengl

BaFin’s First Proceedings Concerning Third-Country Branches as an Expression of a New Model of Administrative Banking Supervision

Following the implementation of CRD VI through the BRUBEG, the European Union’s objective of restructuring the supervisory framework applicable to third-country branches is now becoming increasingly visible within German supervisory practice. Whereas academic and practical discussion has thus far focused primarily on the substantive requirements of the new third-country branch regime, the relicensing proceedings recently initiated by the BaFin shift attention towards the administrative steering mechanisms underpinning an emerging supervisory architecture. The letters and self-assessment questionnaires distributed by BaFin make clear that relicensing extends far beyond a merely technical adaptation of existing authorisations. Rather, the supervisory authority is establishing an autonomous transitional supervisory procedure designed to integrate third-country branches into a harmonised European supervisory model.

Article by: Dennis Buschmann and Johannes T. Passas

About six months after the previous sanctions package, the EU Member States adopted the 20th sanctions package on 23 April 2026, once again imposing comprehensive financial and economic sanctions against Russia and Belarus.

Following months of political and public debate, in late April 2026, EU member states adopted the 20th package of sanctions against Russia, accompanied by further restrictions on Belarus. The package ended a previous deadlock and sent a clear political signal to further increase economic and financial pressure on Russia and significantly enhance the effectiveness of existing sanctions. The sanctions package is also accompanied by the provision of €90 billion in EU financial assistance to Ukraine.

Article by: Victoria Zahn and Maximilian Giepmann

Current Framework Concept from the Federal Ministry of Justice and Consumer Protection and the Federal Ministry of Finance

The company with asset lock (hereinafter “GmgV”) is a potential new corporate form that stems from an initial academic draft from 2020. At the core of the GmgV is the asset lock: profits may not be distributed to the members but must remain within the company (so-called “asset lock”). Membership is intended to be personal and neither freely transferable nor inheritable; members thus assume a kind of fiduciary role.

Article by: Dr. Kris Breudel

In large parts of Berlin, a permit will in future be required if residential space is let on a temporary basis. This is not based on a new resolution of the Berlin House of Representatives, but on an administrative regulation issued by the Senate Administration. According to this regulation, fixed-term lettings in so-called social preservation areas constitute a change of use requiring permission.

Article by: Dr. Lars Hinrichs, Klaus Heeke, Elisa Ultsch, Leonie Scharwächter

Employment law implications of the EUPTD not being transposed into German law by 7 June 2026

The EU Pay Transparency Directive (Directive 2023/970/EU, EUPTD) must be transposed into German law by 7 June 2026 (Article 34 (1) EUPTD). To date, the German legislature has not presented a draft of the implementing legislation (which is expected to provide for the transposition of the key provisions of the EUPTD into the German Pay Transparency Act (Entgelttransparenzgesetz, EntgTranspG I) enacted in 2017). It is to be expected that the EUPTD will not be transposed into German law by the deadline. There is currently debate within the remuneration sector as to whether, in this scenario, the substantive provisions of the EUPTD are directly applicable in German law without restriction – and this view is indeed currently being advocated by certain stakeholders (primarily legal advisers). In this Client Alert, we discuss the direct application of the EUPTD (which must be ruled out, at least for employers with shareholders under private law) in the event of failure to transpose it on time – and the indirect consideration to be taken into account in remuneration practice within the framework of the (EUPTD-)directive-compliant interpretation of the relevant provisions of the EntgTranspG I and the resulting requirements for action.