German Legislator Research Articles

The implementation of MiFID in Germany and the abolition of section 37d of the Securities Trading Act

The European Markets in Financial Instruments Directive (MiFID) came into force in 2004 and shall be implemented in the jurisdictions of EU Member States' by the end of 2007, after some amendments made it necessary to postpone the implementation date.The purpose of this Directive is to reform the existing investment services directive, which dates from 1993, and to adapt it to the current requirements of the securities trading sector in Europe.This article deals with the content of MiFID and the current status of its implementation in Germany.The German legislator is planning not only to implement the Directive, but it is envisaged to change certain information requirements with regard to forward transactions at the same time. This will also be dealt

Zur Strategieanfälligkeit der Arzneimittelkomponente des IPHCC+RxGroups-Klassifikationssystems in einem morbiditätsorientierten Risikostrukturausgleich - Eine konzeptionelle und datengestützte Analyse

A report commissioned by the German Ministry of Health recommends to the existing scheme for calculating risk-adjusted transfers to sickness funds supplement with the IPHCC+RxGroups method. The method is based on inpatient diagnoses and prescribed drugs as health status measures deduced from prior use. The present study investigates the sickness fund's expected net return from gaming based on the drug component of the risk adjuster. The study explores three possible strategies using the RxGroups method. For the stimulations, insurees are assigned to additional indications or to higher valued RxGroups within the same indication. Then, costs and financial benefits attributable to the altered drug use are estimated and compared with the status quo. The study uses 2000 and 2001 sample data of more than 370,000 insurees of Germany's company-based sickness funds system (BKK). While upgrading increases overall costs, it can be beneficial for the individual sickness funds. Their net return crucially depends on the number of sickness funds gaming the system: the more participating in the game, the smaller is the average net return. Moreover, not participating often is even worse, which in turn points to a prisoner's dilemma. When extending the risk adjustment scheme in social health insurance, the German legislator should take into account the perverse incentives of risk adjusters such as the described prescription drug model.

The Threat Environment Created by International Terrorism from the German Police Perspective

International terrorism motivated by Islamist ideology poses completely new challenges to the security authorities of the affected states in terms of manner of commission and impact. The present contribution describes the threat created by international terrorism from the German police perspective. It begins by describing the threat represented by the terrorist crime phenomenon in terms of motivation, perpetrator and crime profiles, and organisational structure. This is followed by comments on how and to what extent international terrorism threatens German interests, as well as how German legislators have reacted. However, the main emphasis is placed on the counter-strategies of the German security authorities, in particular on mutual networking and intensified efforts to close ranks with other actors engaged in the battle against international terrorism.

Ideologiska förutsättningar för den svenska och den tyska prostitutionslagstiftningen

"The ideological bases for prostitution policies in Sweden and Germany" by Susanne Dodillet, PhD Candidate at the Department of History of Ideas. At the end of the twentieth century, both Germany and Sweden engaged in extensive discussions on prostitution - discussions that resulted in two very different prostitution policies. Whereas the purchase (but not the selling) of sexual favörs was forbidden in Sweden, prostitution was made a legal profession in Germany. This artide examines the debates that preceded these legislations and analyses their ideological backgrounds. The ideas behind the Swedish client criminalization are traced back to the welfare ideology of the 1930s. Sweden, still known for its sexual liberalism during the 1950s and 1960s has at no time during the 20th century accepted prostitution. Prostitution has been condemned as an expression for the gender inequality in the society.The Germans renounciation of explicit feminist arguments, on the other hand, can be explained by the power struggles between the conservative Christian Democratic parties and the liberal left wing in the German parliament and a broad skepticism toward feminist ideas in the parliament. Also the leftist German legislators understand their prostitution lawthat approved prostitution as a regular profession - as a way of liberating woman. Apart from their Swedish colleaugues the supporters of the German legislators had to disguise their arguments into a new rhetoric to be accepted in the parliament. They also adopted a liberal attitude towards sexual behaviors that have been oppressed by conservative double standards and Christian norms.

The German Constitutional Court and the European Arrest Warrant: 'Cryptic Signals' from Karlsruhe

In an important 2005 judgment, the German Federal Constitutional Court declared void the German Act that was meant to implement the European Union Framework Decision on the European Arrest Warrant. However, according to the Constitutional Court, the Framework Decision itself did not necessarily provoke a breach of the German Constitution. If the German legislator had made adequate use of the tolerance provided by the Framework Decision, he could have avoided any conflict with the Constitution. While, at first sight, the Court's criticism solely seems to refer to German national law, a closer look at some statements that deal with European law reveals a high potential for future disagreement between the German Constitutional Court and European institutions: they do not share the same view as to the development of European cooperation in criminal matters.

Unbundling Germany's Energy Networks

Both European and German laws have been seeking to liberalise energy markets, in particular by facilitating access to energy networks. One important aspect of recent legislation is the so-called unbundling of network system operations from energy supply, which will affect corporate and financial structures, management principles, personal affairs and other aspects. This article gives an overview of the stipulations of the unbundling regime and the way the German legislator has implemented the standards set by the European Union. Furthermore, it discusses some specific problems that occur in the process of applying unbundling rules to German company structures.

Innovationseffekte von Patentrechtsreform und neuer Festbetragsregel

Der Pharmamarkt ist einer der am starksten regulierten Markte. Seitens der Hersteller von pharmazeutischen Praparaten wird immer wieder argumentiert, dass regulatorische Eingriffe des Staates zu einer Senkung der Innovationstatigkeiten der Hersteller im Inland fuhren. In diesem Beitrag untersuchen wir zwei bedeutende neuere Anderungen des regulatorischen Rahmens im Hinblick auf die von ihnen ausgehenden Anreize auf das Innovationsverhalten der Pharmahersteller. Es handelt sich dabei um Regulierungsmasnahmen mit vollkommen verschiedenen Hintergrunden. Zum einen befassen wir uns mit den jungst in Kraft getretenen Anderungen des Patentgesetzes, insbesondere den Neuregelungen bei der Patentierbarkeit biotechnologischer Innovationen in der Folge der EU-Biopatentrichtlinie. Man wollte hiermit den (teilweise umstrittenen) naturwissenschaftlich-technischen Entwicklungen in diesem Bereich gerecht werden und Rechtsunsicherheiten beseitigen. Zum anderen befassen wir uns mit dem Gesundheitssystemmodernisierungsgesetz (GMG), das vor allem der Steigerung der Effizienz der gesetzlichen Krankenversicherung dienen soll. Wir kommen zu dem Ergebnis, dass sich die Regelungen von GMG und PatG hinsichtlich der von ihnen ausgehenden Innovationsanreize in einigen Bereichen erganzen, es in anderen Bereichen jedoch zur wechselseitigen Aufhebung positiver Innovationseffekte kommen kann, die ansonsten von je einer der beiden genannten Regelungen ausgehen wurden.

Editorial

AbstractWith its recently enforced Act on the Reform of the Law on Genetical Engineering, the German Government regulated the so-called coexistence of genetically modified crops with other forms of farming, i.e. conventional and organic farming. The new provisions aim at protecting organic and conventional farming from the supposedly dangerous or hazardous effects of genetically modified crops. By establishing this unbalanced legal framework, the German Legislator not only breaks with basic principles of the law of torts (regarding liability and the burden of proof), it also violates various obligations arising from EC law.

The Adaptation of German Accounting Rules to IFRS: A Legislative Balancing Act

ABSTRACT The accounting strategy of the EU Commission for the last ten years, which reached one of its goals with the Regulation on IAS, is challenging all EU Member States. This article gives an analytical insight into the way the German legislator has confronted this challenge. It explains the statutory changes introduced to adapt the accounting regime in Germany, against the background of arguments for reform and proposals which have been put forward in the German accounting literature and by influential interest groups. The major characteristics of the government's accounting strategy are analysed: an increasing focus on the macroeconomic benefits of adequate accounting regulations, a perception of accounting as a material part of the corporate governance regime, greater weight given to the notion of public interest and the information function of accounting, a focus on consolidated accounts for the revision of existing rules, and, at the same time, considerable reluctance to change any recognition and measurement rules for individual entity accounts. In general the accounting reform strategy of the German government can be characterized as being slow, conservative and reactive, following a marginal step-by-step approach.

Auditing Corporate Risk Management - A Critical Analysis of a German Particularity

In 1998, the German legislator obliged public limited companies to install a system to detect risks endangering corporate going concern at an early stage. Moreover, he required the auditor of annual financial statements to audit this risk monitoring system. This task is an international novelty forestalling the Sarbanes-Oxley Act. To contribute to the emerging international concern from a German point of view, I discuss the legal and the professional approaches to auditing corporate risk management. Highlighting specific legal and factual limitations and using empirical data from audit opinions of German companies listed in the DAX 100, I investigate the impact of the new audit obligation on the expectation gap in auditing. The results suggest doubts whether the auditors will fulfil the supervisory board's needs or the public expectations in auditing. At least, reporting on the audit shows deficits in both regulation and practice.

Competition in the German Electricity and Gas Industries

This article looks at the regulation of the liberalised German electricity and gas markets through the provisions of the Energy Industry Law. The German legislator has decided on a combination of the three competition models defined in the EU Directives for electricity and gas in the energy supply law: ‘competition between grids’, ‘competition in grids’ and ‘competition for grids’. The article also considers the public control of competition ‘between grids'and ‘for grids’ with licence contracts and the contractual application of ‘competition in grids’ and whether governmental regulation or self-regulation is the most desirable way forward.

The Reform of German Tort Law

Abstract: After a few futile attempts at reforming German law relating to compensation for tortious acts and breach of contract, a bill enacted on April 18, 2000 brought about some major changes. Amongst the key areas of reform are: the introduction of a general claim for non-pecuniary loss in cases of personal injury; the partial exclusion of value-added tax (VAT) in the calculation of material damages; an improvement of the position of children participating in public traffic; a “levelling” of the defences available to train operators as well as keepers of motorised vehicles under strict liability statutes; new rules relating to liabilty for pharmaceutical products; the raise of existing compensation caps (Haftungshöchstgrenzen) in the field of strict liability; and the introduction of liability of court-appointed experts who submit erroneous reports. Not only has the German legislator, by implementing this reform in August 2002, stayed abreast of changes in case law relating to compensation for tortious acts and breach of contract, but it has also fallen into line with general developments of the law in Europe, such as the improved protection of small children and the establishment of an express claim for non-pecuniary loss. However, the legal basis for a general right of personality has remained unchanged; in this context, a proposal by the Bundesrat to include such a right expressis verbis in the new § 847 BGB has not been adopted. The same holds true for the possibility of the principal to escape liability for his assistants, which is even more important against the background of other European jurisdictions. To lawyers with a common law background, who are accustomed to the gradual development of their case law, this history of German tort law offers an interesting perspective: it demonstrates the frictions involved in the interplay between legislative “maintainance” of an entire Code on the one hand, and development of the law by Courts on the other.

Germany's Electricity and Gas Markets Stand Alone: Negotiated Third Party Access

This article describes the legal features of access to the power grid under German law after the 1998reform. The German legislator opted for negotiated third party access and left numerous legal questions to be solved to the courts and authorities. The article focuses on the absence of a regulator and the filling of this gap through the Associations’ Agreements. The amendments to the law which are currently under discussion are also considered.

New Rules of Breach of Contract in Germany

In 2001 the German legislator passed a law for the ‘Modernisation of the Law of Obligations’ (Schuldrechtsmodernisierungsgesetz—SMG). It encompassed new rules on breach of contract, a wholly new law of limitation of actions and new provisions for contracts of sale, contracts for services and loan. By the same Act the existing statute on standard contracts (Gesetz über Allgemeine Geschäftsbedingungen) and various other statutes for the protection of consumers were integrated into the German Civil Code (Bürgerliches Gesetzbuch—BGB). It was the most extensive amendment of the BGB since its enactment in 1900. Many of the legislative measures bundled together in the SMG had an EC-law background. We shall here consider only one aspect of the reform statute, namely the new rules on breach of contract and their relationship with European law.

New Rules of Breach of Contract in Germany

In 2001 the German legislator passed a law for the ‘Modernisation of the Law of Obligations’ (Schuldrechtsmodernisierungsgesetz—SMG). It encompassed new rules on breach of contract, a wholly new law of limitation of actions and new provisions for contracts of sale, contracts for services and loan. By the same Act the existing statute on standard contracts (Gesetz über Allgemeine Geschäftsbedingungen) and various other statutes for the protection of consumers were integrated into the German Civil Code (Bürgerliches Gesetzbuch—BGB). It was the most extensive amendment of the BGB since its enactment in 1900. Many of the legislative measures bundled together in the SMG had an EC-law background. We shall here consider only one aspect of the reform statute, namely the new rules on breach of contract and their relationship with European law.

The Right to Part-Time Work: The Netherlands and Germany Compared

The Dutch and the German legislators have very recently introduced the employees' right to claim an adaptation of their individual working time which is mainly discussed under the label 'right to part-time work'. This article outlines the similarities and differences between the Dutch and the German legal situation and discusses these with regard to the European Directive 97/81/EC on part-time work.

Towards an Understanding of the recent European Labour Market Reforms: A New Case Study in Comparative Capitalism?

The series of labour market reforms recently introduced across Europe may have struck many observers in North America, as it did critics on the continent, as incongruous. The reforms, whose main purpose is to extend worker protection, come at a time when economic growth on the continent is slowing markedly. From the perspective of German, French, Spanish and European legislators, however, the reforms are sensible and timely, conducive to international competitiveness. How can these diametrically opposed assessments about such a fundamental matter be explained?

Le centenaire du BGB : le droit de la famille face aux exigences du raisonnement politique, de la constitution et de la cohérence du système juridique

While Germany law, codified in the BGB (German Civil Code) of 1900, endured the first half of this century practically unchanged, the second half has been characterized by a whole host of reforms. The last major reform, the Children'sLaw (Amendment) Act, dates from 16th December 1997. Contrary to most other European legal Systems, reforms in Germany are often the resuit of constitutional pressures (equalityfor women, equal treatment of legitimate and illegitimate children) with it not being uncommonfor the Federal Constitutional Court (Bundesverfassungsgericht) even to set deadlines for the promulgation of reforming laws. The content of German reform laws are often distinguished by a particularly strict adherence to principles. Although infamily law conflicting interests typically necessitate a compromise, both the German legislator and the courts have, in Une with the prevailing Zeitgeist, tended towards allowing certain values to take precedence ; for example a child's right to know his natural parentage as against the mother's right to protection of her privacy, or the right to know his natural parentage as against the mother's right to protection of her privacy, or the right to the autonomous arrangement of the individual's legal affairs as against the protection of marriage as an institution, where contracts between an engagea couple in which the future marriage partners renounce all post-marital daims in the case of a subsequent divorce are regarded as valid.

Risikomanagement in Industrieunternehmen — gesetzliche Anforderungen und Umsetzung nach dem KonTraG

Industrial enterprises have regarded Risk Management as an essential part of corporate governance for years. Nevertheless the realization of specific risks has lead to sudden failures of large German and international companies. The German legislator therefore changed the German Stock Corporation Law by the Law of Control and Transparency in Enterprises, which came into force by May 1, 1998. Comparing the legal requirements with Risk Management Systems that have been installed before often shows remarkable deficiencies. Industrial enterprises must especially complete their risk assessment. Furthermore the quantitative approach of analysing risks has to be improved or even installed. Risk communication tools have to ensure that executives are informed in an early stage. Finally there is a need for documentation, both for the purpose of realization and auditing Risk Management Systems.

The checks and balances of party federalism: German federal government in a divided legislature

Abstract In this study, we assess the potential for policy change of the German government of Helmut Kohl after unification combining party positions with formal bicameral settings in a spatial model of legislative action. We distinguish between two policy areas and two types of legislation, mandatory and non–mandatory legislation imposing either a symmetric or asymmetric power distribution between both German chambers. In order to identify German legislators’ party positions in different policy areas, we use data from ECPR Party Manifesto research covering the period from German unification in 1990 to the end of the government of Helmut Kohl in 1998. We find that the federal government of Helmut Kohl had a policy leadership position until April 1991 with no procedural differences, but the gridlock danger for governmental proposals was higher on the societal than the economic dimension. Afterwards, the government's potential for policy change was considerably determined by the type of legislation, independently from the policy dimension. At the end of the Kohl era, the governmental policy leadership position was limited to policies that left even the opposition majority of German states better off. The procedural settings mattered greatly on the economic dimension, and the danger of gridlock on societal policy was smaller only for non–mandatory legislation.