Bundesrat, the upper house of German parliament, has approved a bill modifying the nation’s Banking Act to allow for sanctions to be imposed on banking institutions suspected of systematically assisting clients to evade tax.
The draft legislation will equip the country’s banking regulator BaFin with a range of deterrents, including the threat of branch closure and the revocation of an institution’s banking license, tax-news.com has reported.
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Currently, the regulator is only authorized to initiate criminal proceedings against bank employees for their role in aiding and abetting tax evasion.
The same bill was approved by the Bundesrat in June last year; however the lower house could not vote on the text before the end of the legislative period due to the September elections.
The German federal states of North Rhine-Westphalia, Lower Saxony, and Baden-Würrtemberg nevertheless decided to re-launch the parliamentary approval process last month and re-submitted the bill to the Bundesrat on April 11.
The bill will once again pass to the Bundestag.
