Most popular German government regulation on finan

2022-07-25
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The German government's supervision on financial leasing

financial leasing means that the lessor enters into a supply contract with a third party (Supplier) according to the specifications provided by the lessee, and the lessor obtains the lease item according to the contract in accordance with the terms agreed by the lessee within the scope related to its interests; In addition, the lessor and the lessee conclude a lease contract, which grants the lessee the right to use the lease item on the condition that the lessee pays the rent. In short, financial leasing is "borrowing chicken to lay eggs and selling eggs to buy chicken". It not only promotes the sales of equipment manufacturing industry, solves the problem of difficult financing for equipment enterprises, but also has the functions of financial management, asset management and revitalizing idle assets. As an investment option, the T, kg, N, kn, G and LB financial leasing industry of pneumatic units was introduced into Germany from the United States in the 1960s, and has been continuously promoted in Germany since then. Since the German Ministry of Finance issued the regulations on lease accounting treatment in the 1970s, the pace of industry development has also accelerated. This paper gives a brief introduction to the supervision and development of financial leasing in Germany

I. the relevant legal system of Germany on financial leasing stipulates that financial leasing in Germany is governed by the first part of the civil code on leasing. Although the legal and practical circles agree that financial leasing is a special form of leasing, Germany does not have an independent law on financial leasing, but applies the provisions of the civil code on general leasing. At present, in addition to the civil code, the laws and regulations governing financial leasing include the credit industry law, the commercial conditions law, the consumer credit law, the production law, the environmental law, the bankruptcy law, etc. Because the practical circles think that the lease concept of the civil code system can no longer adapt to the financial leasing business, they have created some special terms of financial leasing, which have been supported by the case law of the federal court. However, the German legal circles still believe that financial leasing should not be separated from the original legal system of leasing, and treat financial leasing as a kind of traditional leasing, which should be handled according to the traditional leasing principles in the handling of commercial legal disputes and bankruptcy

(I) provisions on financial leasing in the German civil code

Germany is a country whose civil law is reflected in a large number of statutory regulations, the most important of which is the civil code. The civil code, which came into force in 1900, contains many specific provisions that automatically apply to leases, that is, to financial leases, unless otherwise agreed by the parties. Compared with traditional leasing, both of them include the transfer of the lessor's right of use to the lessee, but the latter is responsible for the maintenance of the leased property, while the former includes the financing provided by the lessor to the lessee, and the maintenance of the leased property is the responsibility of the lessee. After the debt law in the German civil code was amended in 2002, when article 500 introduced some consumer protection provisions on consumer loan contract law applicable to financial leasing contracts, it mentioned "financial leasing" for the first time, but did not make other specific provisions. However, when the court tried the financial leasing case, there were still two indicators of the instigation load value on the scale according to the general leasing provisions of the civil code

(II) provisions on financial leasing in the credit industry law

Germany has brought financial leasing into the scope of financial supervision since 2008. Many legal provisions on financial leasing supervision originate from the credit industry law. According to the law, the financial leasing regulatory authorities are the Federal Bank of Germany and the German financial regulatory agency. Enterprises engaged in financial leasing business must obtain the permission of the German financial regulatory agency, and must regularly submit business reports to the federal bank. Article 32 of the law stipulates that when an enterprise applies for a financial lease and applies to the financial regulatory authority for a financial lease license, it must submit a business plan, the resume and qualifications of the enterprise manager, etc; Article 14 stipulates that the enterprise must submit a business report to the federal bank on a quarterly basis to explain the business carried out by the enterprise, especially the project with a financing amount of more than 1.5 million euros, and the lessee's liabilities; Article 24 stipulates that the change of enterprise address and leaders shall be timely reported to the competent department

(III) provisions on financial leasing in the bankruptcy law

in the case of bankruptcy, the adjustment of the relationship between the three parties of the lease transaction shall be carried out in accordance with the relevant provisions of the bankruptcy law. Paragraph 1 (2) of Article 108 stipulates that a lease contract transferred to a third party (bank) as security for refinancing shall not be affected by bankruptcy. Due to the large demand for funds, usually the financial leasing company will finance through the rent receivable creditor's rights, that is, the rent receivable creditor's rights will be transferred to the bank to obtain funds, but the lease will still be retained, and attention should be paid to the ownership that the oil temperature should not exceed 70 ℃. When the lessor goes bankrupt, the ownership of the lease item and the creditor's right of the rent receivable belong to the bank, and the lease contract is not affected. In other words, Article 108 strengthens the protection of banks. In the event of the lessor's bankruptcy, the bank receives priority compensation from the proceeds (i.e. rent) generated from the lease item. This has greatly safeguarded the interests of banks and objectively encouraged banks to provide financial support for financial leasing companies

(IV) other relevant laws

1 Production law, which entered into force on 1 January 1990. The act mainly deals with manufacturer's products. It classifies the lessor of equipment imported from outside the EU and leased within the EU as a manufacturer

2. Consumer credit law, implemented on January 1st, 1991. Financial leasing is governed by some provisions of the law, which aims to strengthen the protection of consumers' real credit

3. Environmental law, implemented on January 1st, 1991. The Act provides for strict liability of the occupier of certain equipment for damage caused by such equipment. According to the definition of the act, the occupier is usually the lessee

II. Regulatory model

in Germany, the financial leasing business itself was not regulated before 2009, but according to Basel II, the financial leasing enterprises run by banks need to consolidate their accounting treatment business with the parent banks. Therefore, the financial leasing enterprises with banking background are bound by the relevant regulatory content of the Basel agreement through the inter balance sheet consolidation. At the same time, some large-scale manufacturers such as Volkswagen, BMW, Mercedes Benz, etc. also carry out financial leasing business by means of reinvestment and establishment of financial leasing enterprises by banks after investment in banks. Such financial leasing enterprises should also be consolidated with their parent banks, which is also indirectly regulated by the Basel agreement. It can be said that nearly 80% of the German financial leasing market share before 2009 was indirectly regulated

(I) since 2009, Germany's financial leasing regulatory authority has started to bring financial leasing business into the scope of financial regulation due to the rapid development of German financial leasing business, which has had an impact on credit financing business, and the outbreak of the global economic crisis has triggered financial market shocks. Its regulators are mainly the German financial supervisory authority (Bafin) and the German Federal Bank (Bundesbank)

on May 1st, 2002, Germany merged the Former Banking Regulatory Bureau, the securities regulatory bureau and the insurance regulatory bureau to form a unified financial regulatory bureau. Its total part is located in Bonn and Frankfurt, with about 1600 employees. This institution is a public law administrative organ directly under the federal government, with power and capacity. It is subject to the legal supervision and business supervision of the Federal Ministry of finance, performs the national supervision function on the financial market, and participates in relevant international affairs on behalf of Germany within the scope of its responsibilities. Its regulatory objectives include: 1) ensuring the overall function of the German financial industry; 2) Guarantee the solvency of German financial institutions; 3) Protect the interests of customers and investors, and maintain the stability of the financial system and financial market

financial leasing supervision is still a new issue in Germany. The German federal financial regulatory agency has not established a special branch, but temporarily put relevant regulatory affairs under the jurisdiction of GW section and Q3 section of innereverwaltung. The GW section is mainly responsible for reviewing the application for financial leasing license during the transition period, and the Q3 section is also responsible for the investigation of unlicensed leasing business in addition to specific regulatory matters

(II) supervision methods and contents

before the end of 2008, there was no market supervision on the leasing industry in Germany. As Germany revised its tax law in 2008, leasing enterprises voluntarily recognized themselves as financial service organizations, similar to banks, in order to obtain preferential corporate tax, thus accepting government supervision. According to relevant regulations, as long as the leasing enterprise carries out financial leasing business, the whole enterprise must be under supervision

the main functions and responsibilities of the Financial Supervision Bureau for financial leasing supervision are:

1 Issue business licenses to finance leasing enterprises

leasing enterprises must obtain the license issued by the financial regulatory authority to carry out financial leasing business. Leasing enterprises that have been established before the end of 2008 can be approved by the regulatory authority by applying the simple procedure; After that, the newly established leasing enterprise shall submit a written application to the financial supervision and Regulation Bureau, including the project plan, the manager's experience and qualification certificates, to engage in the financial leasing business. The time for approval of business license is generally 9 months

2. Approving personnel matters of financial leasing enterprises

referring to the relevant provisions of the German credit industry law (KWG) on the banking industry, the Federal Ministry of finance of Germany authorizes the financial supervision bureau to effectively manage the operation and management personnel of financial leasing enterprises. The financial leasing enterprise has the obligation to report the leadership candidates to the institution. The candidates must have reliability, professional quality, professional and leadership experience and relevant business knowledge. If it is found that the leader selection does not meet the requirements of the prerequisites, the regulatory authority has the right to refuse to issue the license or even revoke the license. In case of any change of senior executives or address, the enterprise shall report to the financial regulatory authority

3. The financial regulatory authority has the right to track down fraudsters in the financial leasing market, investigate behind the scenes transactions, expose price manipulation and money laundering through financial leasing channels, and may require financial leasing enterprises to provide detailed business information and the credit status of partners (lessees), and guide enterprises to avoid risks

the main functions of Deutsche Bundesbank for financial leasing are:

1 Provide guiding services for enterprises

2. Review the business reports submitted by the enterprise

financial leasing enterprises have the obligation to report the "million euro business", that is, they must report to the central bank every three months the financial leasing contracts they signed in the previous quarter, especially the contracts involving an accumulated amount of more than 1.5 million euros and the lessee's debt background, so that the central bank can timely judge whether the customer is over indebted and make appropriate responses to prevent a lessee from using financial leasing to disrupt the market

the financial leasing enterprise must also submit an annual performance (win/loss) report to the Federal Bank of China within three months after the end of the current business year, which must be first audited by an independent economic audit institution/company. The Federal Bank of China conducts macro monitoring on the financial leasing industry by obtaining the enterprise performance statements. At the same time, it also aims to obtain more industry information and statistical data and provide background materials for government decision-making

(III) German financial leasing market access requirements

theoretically, Germany has no special restrictions on enterprises from third countries outside the EU to enter its market to carry out financial leasing business. Since the strengthening of supervision on this industry in 2008, foreign enterprises have been treated equally. Foreign enterprises must obtain a license to operate financial leasing business in Germany. The prerequisite for obtaining the license is that foreign enterprises must have certain

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