Latest information regarding the changes to the Foreign Trade and Payments Ordinance (AWV) pursuant to Sections 63-73 AWV

RegCORE Client Alert | German Regulatory Developments

Brief overview

Reducing unnecessary bureaucracy is an ongoing task for the German government. In the Coalition Agreement of the 20th legislative period, the governing parties agreed to reduce unnecessary bureaucracy and to present a corresponding bureaucracy reduction act (Bürokratieentlastungsgesetz). The regulation on reducing bureaucracy for citizens, businesses and the administration (BEV) also serves this purpose.Bundesgesetzblatt Teil I - Verordnung zur Entlastung der Bürgerinnen und Bürger, der Wirtschaft sowie der Verwaltung von Bürokratie - Bundesgesetzblatt, available here.Show Footnote This regulation is part of the “Meseberg Bureaucracy Reduction Package” agreed upon by the Federal Cabinet at the end of August 2023, which comprises an annual reduction of around three billion EUR.The reasons for the amendment are taken from the draft regulation of May 23, 2024 (draft regulation), available here.Show Footnote Redundant bureaucracy is understood to mean regulations that cause expense without serving a legitimate purpose, or where the expense and benefit are disproportionate.See draft regulation, p. 58.Show Footnote

The BEV was published on 13 December 2024. With the BEV, the Federal Government, under the coordinating leadership of the Federal Ministry of Justice, launched an interdepartmental collective ordinance designed to relieve the economy, citizens and the administration of unnecessary bureaucracy relating to regulatory law. The regulatory authority of the German Federal Government is derived from Section 11 (2) and (4) in conjunction with Section 12 (1) clause 1 and (3) of the Foreign Trade and Payments Act (Außenwirtschaftsgesetz - AWG);Available here.Show Footnote approval by the German Bundesrat is not required.

Overall, the measures contained in the BEV aim to reduce the compliance costs for the economy by around 22.6 million EUR per year, with the main relief being achieved through amendments to the Foreign Trade and Payments Ordinance (Außenwirtschaftsverordnung - AWV), the Pawnbroking Ordinance (Pfandleihverordnung) and Food Law (Lebensmittelrecht). In addition, the ordinance contains various measures to promote digitisation, simplify administrative procedures, reduce reporting requirements in commercial law and clarify legal issues.See draft regulation, p. 1.Show Footnote

Article 1 of the BEV provides for an amendment to the AWV. The amendments to the AWV came into force on 1 January 2025. This Client Alert focuses exclusively on the measures amending the AWV.Available here.Show Footnote

Key takeaways

Adjustment of the annexes and editorial changes to the AWV

The editorial adjustments resulting from the repealed provisions and the adjustments to the annexes are listed below:

• Section 64 of the AWV refers to Annex 2, “Reporting of assets of German residents abroad”See draft regulation, p. 22–24.Show Footnote (previously Annex K3, “Assets of German residents abroad”);
• Section 65 of the AWV refers to Annex 3, “Reporting of assets of foreigners in Germany”See draft regulation, p. 25–27.Show Footnote (previously Annex K4, “Assets of foreigners in Germany”);
• Section 66 of the AWV refers to Annex 4, “Reporting of claims and liabilities”See draft regulation, p. 28–30.Show Footnote (previously Annexes Z5a Sheet 1/1 “Claims and liabilities from financial relationships with associated foreign non-banks”, Annex Z5a Sheet 1/2 “Claims and liabilities from financial relationships with other foreign non-banks”, Annex Z5a Sheet 2/1 “Claims and liabilities with respect to associated foreign non-banks from movements of goods and services”, Annex Z5a Sheet 2/2 “Claims and liabilities with respect to other foreign non-banks from movements of goods and services” and Annex Z5b “Claims and liabilities with respect to foreigners from derivative financial instruments”); 
• Section 67 of the AWV refers to Annex 5, “Payments (transactions) for services, transit, direct investments, capital transactions (including securities and interest income) in foreign trade”See draft regulation, p. 31.Show Footnote (previously Annex Z4 “Payments in foreign trade and payments transactions” and Annex Z11 “Payments for securities yields in foreign trade and payments transactions”) and to Annex 6, “Payments for securities transactions, financial derivatives in foreign trade”See draft regulation, p. 32.Show Footnote (previously Annex Z10 “Securities transactions and financial derivatives in foreign trade and payments transactions”); and
• Section 70 of the AWV refers to Annexes 5, 6 and 7, “Payments for travel (card transactions) in foreign trade”See draft regulation, p. 33.Show Footnote (previously Annex Z14 “Interest income and similar revenues in foreign trade and payments transactions (excluding securities)” and Annex Z15 “Interest payments and similar expenses in foreign trade and payments transactions (excluding interest on securities)”).

The annexes were amended to modernise reporting procedures, enable electronic data collection, reduce bureaucracy and implement EU legal requirements.See draft regulation, p. 73–74, 78.Show Footnote The new annexes have been available for use since summer 2025, but the previous annexes will remain valid until summer 2026. The end of this transition period will be announced in a timely manner in the Deutsche Bundesbank’s (Bundesbank) newsletter and on their website.Elektronisches Meldewesen im XML-Format: Außenwirtschaftsstatistik – Deutsche Bundesbank, p. 2, available here.Show Footnote This transition period is necessary to give affected persons sufficient time to adapt to the technical challenges.

Adjustment and clarification of definitions

Section 63 of the AWV contains definitions of key terms. The revision was necessary because Regulation (EC) No 2223/96Available here.Show Footnote (European System of Accounts 1995 (ESA 95)), to which reference was previously made, has been replaced by Regulation (EU) No 549/2013.Available here.Show Footnote

As part of this adjustment, full reference is made to sections 2.12 to 2.30 and sections 2.07 to 2.11 of Annex A to Regulation (EU) No 549/2013, thereby clarifying the concept of an “institutional unit”. This mainly affects holding companies, groups of companies, special-purpose entities and so-called notional resident units. The clarification increases legal certainty and ensures consistency between balance of payments statistics and national accounts.See draft regulation, p. 74.Show Footnote

In addition to the fundamental adjustments to the definitions, specific clarifications have been made in the area of new and relevant financial instruments that require close attention in balance of payments statistics.

In particular, Section 67 (3) clause 2 no. 2 of the AWV states that the transfer of crypto assets is considered a payment within the meaning of the AWV. This provision does not create a new reporting obligation instead it avoids time-consuming queries to the Bundesbank in the future. The definition of the term “crypto assets” is based on Section 1 (11) clause 4 of the German Banking ActAvailable here.Show Footnote (Kreditwesengesetz - KWG).See draft regulation, p. 76.Show Footnote

Raising of reporting thresholds and relief for parties subject to reporting requirements

As part of the amendments to the AWV, the reporting thresholds for capital and payment transactions were significantly increased in order to relieve small and medium-sized enterprises (SMEs) and private households in particular of reporting obligations.See draft regulation, p. 58.Show Footnote The reporting thresholds were last adjusted in 2002 by the 56th Ordinance Amending the AWV.See draft regulation, p. 73.Show Footnote Due to monetary developments in the Eurozone, many companies now exceed the reporting thresholds even though they account for only a small share of capital and payment transactions. This situation led to reporting burdens, which are being reduced by the current changes. The increase in reporting thresholds is compatible with the requirements for balance of payments statistics arising from international regulations and EU law. The slight loss of information resulting from the increase in reporting thresholds is compensated for by using alternative statistical methods.See draft regulation, p. 74–75.Show Footnote

According to Section 67 (2) no. 1 of the AWV, transactions are only subject to reporting requirements if their value exceeds 50,000 EUR (previously, the threshold for payments was 12,500 EUR).Available here.Show Footnote The reporting threshold for portfolio reports on receivables and liabilities has been raised from five million to six million EUR in accordance with Section 66 (1) of the AWV. Similarly, the reporting threshold for portfolio reports on assets held by German residents abroad within the meaning of Section 64 (3) of the AWV and by foreigners in Germany within the meaning of Section 65 (4) of the AWV has been raised (previously, the threshold was three million EUR in each case; now it is six million EUR).See draft regulation, p. 74–75.Show Footnote

In addition, interest payments on foreign bonds and money market instruments are completely exempt from the reporting requirement under Section 67 (2) no. 4 of the AWV, as the necessary information can be obtained from secondary statistical sources.See draft regulation, p. 76.Show Footnote The regulatory provision of Section 70 (1) no. 3 of the AWV has been deleted, as the regulation is no longer relevant in survey practice and can therefore be omitted.See draft regulation, p. 77.Show Footnote

Changes to the content and structure of the sections

Section 66 of the AWV has been revised to improve readability. Paragraph 1 now standardises the general reporting obligation, while paragraph 2 summarises the exceptions. In addition, the term “investment limited partnership” has been added to Section 66 (2) no. 2 of the AWV in order to align the exemptions for investment funds with the terminology used in Section 1 of the German Investment CodeAvailable here.Show Footnote (Kapitalanlagegesetzbuchs - KAGB). The formal requirements for notification pursuant to Section 66 (5) of the AWV have been replaced by a reference to the formal requirements of Section 72 of the AWV in order to ensure uniformity in the formal requirements.See draft regulation, p. 75.Show Footnote

Adjustments to reporting deadlines and reporting procedures

Section 71 (3) of the AWV stipulates that the reporting deadlines for reports in accordance with Annex 4 are to be standardised. Annex 4 replaces the previous Z5, Z5a and Z5b reports, which are now combined in a uniform reporting procedure. Instead of the previous different deadlines of 10 and 20 calendar days, a uniform deadline of 15 calendar days now applies. Annex 4 covers inventory reports on receivables and liabilities in foreign trade, particularly those that are subject to reporting requirements in accordance with Sections 66 ff. of the AWV.Available here.Show Footnote

The shortening of the deadline for reporting receivables and liabilities with foreign non-banks follows the requirements of Regulation (EU) No. 555/2012,Available here.Show Footnote which provides for a reduction in the transmission deadlines from the original T+85 (2014) to T+80 from 2019 onwards.See draft regulation, p. 77.Show Footnote

The resulting increase in time required is offset by the simultaneous extension of the deadline for reporting claims and liabilities to foreign banks (the previous “Z5 Report”).See draft regulation, p. 77.Show Footnote

Furthermore, Section 71 of the AWV establishes a uniform reporting deadline for transaction reports in payment transactions on the seventh calendar day. This change particularly relieves the reporting parties, as reports on securities and financial derivatives as well as those of financial institutions now must be submitted on the seventh calendar day; rather than, as previously, on the fifth calendar day.See draft regulation, p. 78.Show Footnote

Electronic reporting and technical modernisation

Since 2013, Section 72 of the AWV has stipulated that reports on capital and payment transactions must generally be submitted electronically to the Bundesbank in accordance with the formal requirements issued by it. In the Annexes to the AWV, the information to be reported has so far been presented in a form format, which no longer meets the current technical requirements due to the ongoing automation of data processing. For this reason, the previous forms have been replaced by compressed survey charts. This change makes it possible to shorten or omit individual regulations and adjust reporting times, thereby increasing the efficiency of the survey systems and further reducing the burden on reporting entities.See draft regulation, p. 73–74.Show Footnote

Key considerations for practice

The AWV regulates reporting obligations in foreign trade, particularly regarding transactions and holdings between domestic and foreign parties. It primarily affects institutions, companies and private individuals who are required to report cross-border payments or assets to ensure the control of cross-border capital transactions.Allgemeine Übersicht: Zahlungen im Außenwirtschaftsverkehr – Deutsche Bundesbank, p. 2, available here.Show Footnote

The significant increase in reporting thresholds for capital and payment transactions will lead to a noticeable reduction in reporting obligations, thereby considerably reducing the burden on those affected. For companies and public administrations, this means not only a significant reduction in the daily compliance burden, but also a lower risk of incorrect or incomplete reports.

In addition, the harmonisation and partial extension of reporting deadlines ensures greater planning security and more efficient organisation of reporting activities. Smaller companies, in particular, will benefit from this as they will be able to coordinate their processes better in future.

The digitisation of reporting systems through the switch to electronic collection charts significantly simplifies the reporting process. The modernised reporting formats enable seamless connection to automated systems, reduce transmission errors and significantly speed up data processing at the Bundesbank.

In order to benefit optimally from these advantages and avoid sanctions, consistent compliance with the new requirements is essential.

Outlook

The amendments to the AWV have noticeably reduced bureaucracy and simplified processes for all parties involved. There are no more efficient or less costly alternatives that would be equally effective in achieving the goal of reducing bureaucracy.See draft regulation, p. 60.Show Footnote Rapid and conscientious implementation is crucial to fully exploit the advantages of the amended reporting requirements and procedures and to ensure sustainable relief.