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Monthly Dose of Germany: January 2025

We would like to share some interesting insights into the German Legal market and recent developments as well as interesting events and publications with you. This edition of our "Monthly Dose of Germany" is presented by our China Desk, headed by Dr. Michael Fischer and Alexander Fischer.

Our colleagues at Deloitte Legal have published numerous interesting articles on current topics in the German legal market. We have collected these for you and hope you enjoy reading them. You will find an overview in the table of contents on the right.

Contracting for Generative AI and mitigating Generative AI supply chain risks

Generative AI (GenAI) is a subset of artificial intelligence (AI) that uses training data to produce new content, including text, images, audio, video, and software code. Its use is becoming increasingly prevalent as organisations seek to increase productivity and drive growth through the efficiencies in time, resources and cost which GenAI offers.

The purpose of the Deloitte white paper "Contracting for Generative AI and mitigating Generative AI supply chain risks" is to explain on a largely jurisdiction-neutral basis critical contractual issues and risks to consider in relation to GenAI procurement and give an overview of some of the key steps an organisation should consider to address and mitigate these issues and risks effectively.

Read more and download the white paper.

Article by Dr. Till Contzen, Elisa Ultsch and Nikola A. F. Werry

Read full article here.

Isolation or freedom? The access to the data of your Chinese Subsidiary

Since the Cybersecurity Law of PRC came into force in 2017, China has been gradually building up a regulatory system for data transfer and is constantly updating the corresponding laws and regulations. For many German parent companies, it is sometimes puzzling whether and how they can access the data of their Chinese subsidiaries. Sometimes, we also have this problem that Chinese subsidiaries prevent German parent companies from accessing data on the grounds of cross-border data regulation to hinder the management of the German parent company to become aware of certain facts. With this Q&A we aim to answer common questions in practice and help you to get a clear overview of where the bar is and thus increase transparency in the management of your Chinese subsidiaries.

In principle, however, the GDPR applies to the (receiving) EU company. It must ensure processing in accordance with the local principles of the GDPR, including

  • Lawfulness, fairness and transparency (Art. 5 para. 1 lit. a GDPR), purpose limitation (Art. 5 para. 1 lit. b GDPR), data minimization (Art. 5 para. 1 lit. c GDPR), integrity and confidentiality (Art. 5 para. 1 lit. f GDPR).
  • If the receiving company processes the data on behalf of the transferring company, a data processing agreement must be concluded (Art. 28 GDPR). If there is joint responsibility, a corresponding agreement pursuant to Art. 26 GDPR is required.

Article by Alexander Fischer and Xinyi Wang

Read full article here.

Update January 2025: Navigating the DORA contract compliance challenge

Reviewing and updating IT-related supplier contracts to match the numerous requirements formulated by DORA poses a tough challenge to financial entities, especially given the 17 January 2025 deadline. An efficient, systematic and digitally enabled review process is key to ensuring a DORA-compliant contract landscape.

DORA came into effect on January 17, 2025, and applies to the affected financial entities. The German Bundestag addressed specific national circumstances and open questions regarding DORA's scope through the Finanzmarktdigitalisierungsgesetz (FinmadiG), adopted on December 18, 2024. In Germany, DORA now applies from January 17, 2025, also encompassing the development banks of the federal states and KfW. For other institutions under the German Banking Act (KWG) that are not credit institutions under CRR (for instance, leasing and factoring institutions), most of DORA's requirements will only apply from January 1, 2027. However, an exemption applies to the reporting obligations under DORA, which are already applicable to these institutions.

The new transparency register system in China

As of November 1, 2024, China’s latest Administrative Measures on Record Filing of Beneficial Ownership Information (the “Measures”) came into force. The Measures, comparable to Germany’s transparency register system (in German “Transparenzregister”), aim to further implement anti-money laundering and counter-terrorist financing requirements by strengthening the transparent management of beneficial ownership information, and impose specific compliance requirements on foreign invested subsidiaries in China (the “Chinese Subsidiary”) in accordance with other laws and regulations, such as the newly amended Anti-Money Laundering Law of the People’s Republic of China.

For all German companies with Chinese Subsidiaries, we would like to provide a brief introduction to the scope, main obligations, operational guidelines and other important points of the Measures. Read more!

Article by Alexander Fischer and Xinyi Wang

Read full article here.

Monthly Dose Employment Law: 10/2024 - Selected current judgements

The current edition of our Monthly Dose Employment Law on current case law explains the judgments of

(1) the German Federal Labour Court (Bundesarbeitsgericht, BAG) dated 20 June 2024 (2 AZR 213/23) on circumstantial evidence in the case of delivery of a termination letter via registered mail with delivery confirmation,

(2) the Regional Labor Court (Landesarbeitsgericht, LAG) Nuremberg dated 24 April 2024 (2 Sa 293/23) and 26 April 2024 (8 Sa 292/23) concerning employer’s liability for damages due to delayed target setting for performance based bonus payments,

3) the LAG Dusseldorf dated 21 May 2024 (3 SLa 224/24) on the employer's right of direction with regard to employees’ obligation to wear protective clothing,

(4) the Regional Social Court (Landessozialgericht, LSG) Munich dated 22 August 2024 (L 7 BA 114/23) regarding the status question of self-employment or dependent employment in the case of spouses working together, and

(5) the European Court of Justice (ECJ) dated 11 July 2024 (C-196/23) on the consultation obligation in cases of mass dismissals due to retirement.

Article by Dr. Lars Hinrichs.Elisa Ultsch and Katharina Gohlke

Read full article here.

Transaction News

We at Deloitte Legal Germany are constantly advising on numerous complex transactions and challenging projects.

We would be delighted to explain our services portfolio to you and discuss with you how we at Deloitte Legal Germany can assist you with your projects, whether in the field of Corporate Reorganizations, M&A transactions, including carve-outs, general commercial, employment law, IT/IP or LMC/LMS. Just reach out to us!

In order for you to better understand how we have helped other clients, we would like to hereinafter showcase information on five projects that our teams have recently advised on.

Deloitte Legal advises Zalando SE on the establishment of a company and a branch in Shenzhen/China 
An interdisciplinary and international Deloitte team led by Corporate/M&A partner and China expert Alexander Fischer (Frankfurt) has advised Zalando SE on the establishment of a company and a branch office in Shenzhen, China. 

Read more

Deloitte Legal advises Ferro Duo Group on the sale of a majority stake to Lafayette 
A Deloitte Legal team led by Düsseldorf Corporate/M&A partners Michael von Rüden and Thilo Hoffmann has advised the shareholder of Ferro Duo Group on the sale of a majority stake to Lafayette Mittelstand Capital. 

Read more

Deloitte Legal advises Foresco Group on acquisition of shares and business premises of Olbort Palletten GmbH  
An international Deloitte/Deloitte Legal team led by Cologne-based Corporate/M&A partner Dr. Christof Bremer has advised the Belgian-Dutch Foresco Group on the acquisition of all shares and the business premises of Olbort Palletten GmbH. 

Read more

Deloitte Legal advises shareholders on sale of majority stake in DIMBEG GmbH 
A Deloitte Legal team led by Düsseldorf Corporate/M&A partners Michael von Rüden and Thilo Hoffmann advised the shareholders of DIMBEG GmbH on the sale of a majority stake to AVIV Germany GmbH, a company of Axel Springer Group. 

Read more

Deloitte Legal advises on the sale of a majority stake in the Weiser GmbH Brandschutz & Technik to GOLDBECK 
A Düsseldorf-based Deloitte Legal team led by Corporate/M&A partners Michael von Rüden and Thilo Hoffmann has advised the shareholders of Weiser GmbH Brandschutz & Technik on the sale of the majority of shares to GOLDBECK Services GmbH, a company of GOLDBECK Group. 

Read more

Deloitte Legal Tech Fair 2025

Legal Tech, digital workflows, legal matter management, GenAI and the future of the legal department

Wednesday, 19 February 2025 | 3:00 - 10:00 p.m.
Register here 

Visitors to the Legal Tech Fair 2023 were able to get to know numerous legal tech solutions.

A lot has happened since then, not only in terms of technical solutions and not only thanks to ChatGPT & Co., but also in terms of the perception of legal tech as an indispensable building block for the future viability of legal departments.

So it's high time for a follow-up event, the Deloitte Legal Tech Fair 2025 on February 19, 2025 in Düsseldorf!

Webcast: Contract Lifecycle Management (CLM) - LEDOX365

Contract Lifecycle Management (CLM) - LEDOX365 

Tuesday, 05 February 2025 | 2:00 - 3:00 p.m.
Register here (Webcast in German language)

Klaus Gresbrand, Partner at Deloitte Legal, along with Dr. Sven von Alemann, Head of Legal Tech and General Counsel, and Alexander Gröger, Product Development Lead at Join GmbH, will present LEDOX365, a Contract Lifecycle Management (CLM) system, in a joint webcast on February 4th from 2 to 3 p.m. CET.

Implementing a CLM system can be complex and time-consuming, but LEDOX365 aims to tackle these challenges and provide a simple and effective solution. The speakers in the webinar will discuss implementation, change management, and customization techniques. There will also be a live demo showcasing the features and benefits of LEDOX365.

Join the webinar to learn how this CLM tool can improve your legal processes and optimize contract management.

Deloitte Legal Webcast Series

In our German language Deloitte Legal Update webcast series, we address current legal issues and developments that are important for corporate practice.

In our upcoming "Legal Update" webcast we will discuss:

Deloitte Legal Webcast "Legal Update #02/2025 - Deloitte Legal Webcast "Legal Update 02/2025" - Case Study Outsourcing of pension liabilities 2025

Wednesday, 05 February 2025 | 11:00 - 11:45 a.m.
Register here (Webcast in German language)

Many companies are currently discussing the strategic direction for managing their pension obligations. There is a growing trend towards outsourcing pension obligations, particularly for direct commitments and provident funds. This is driven by a number of factors, including the need to control interest rate and inflation risk, streamline administration and minimize transactional impact. This webcast will discuss the considerations, challenges, and options for implementing outsourcing in the current economic and regulatory environment. Topics covered will include strategic and operational considerations for outsourcing pension obligations, options and parameters for implementation, employment law frameworks, and tax implications.

Our experts Jan Niebuhr and Stefan Jesgarz (Deloitte Consulting) and Dr. Lars Hinrichs and Elisa Ultsch (Deloitte Legal) will guide you through the webcast.

 

You can download the presentations of our recent webcasts here:

  • Legal Update #01/2025 - Data theft and litigation avalanches - How can companies meet the new challenges and what contributions can technology and AI, in particular the JUNE AI & Automation Case Management System, make?": The landmark decision of the German Federal Court of Justice (BGH) in the "scraping case" has fundamentally changed the framework for companies in the event of "data leaks". According to the BGH's decision, data subjects can claim non-pecuniary damages simply on the basis of a loss of control over their data on the part of the user. This makes it considerably easier for those affected to assert claims for damages – with the associated financial risks for companies that depend on the use and processing of data. A cost-efficient way for companies to avoid liability-related issues and defend themselves against mass litigation resulting from “data leaks” is is only possible by using the latest technology and AI-based tools. In our webcast on January 22, 2025, Thomas Northoff (Deloitte Legal) and Katja Nikolaus (June) discussed the BGH decision and its implications for companies, particularly with regard to liability risks. In addition, they presented our JUNE AI & Automation case management system and demonstrated how it could help companies efficiently manage their legal defense in response to the BGH decision.
  • Legal Update Webcast #22/2024 - Get Ready for 2025In the 2024 year-end webcast, our legal experts, Dr. Julia Petersen and Anna Reshetina-Korkhova, discussed key legal developments that would impact businesses in the coming year. They covered topics such as the Justice Location Strengthening Act and the introduction of (International) Commercial Courts in Germany, the Fourth Bureaucracy Relief Act, the Act Implementing the Corporate Sustainability Reporting Directive (CSRD) and other developments in the area of corporate social responsibility, and updates on employee participation in the SE.  Dr. Alexander Börsch, Chief Economist and Director of Research at Deloitte Germany, provided an outlook on the economic and trade policy landscape. He focused on the possible effects of the measures announced by President-elect Donald Trump on German companies.

In our Webcast Archive, you can find a list of previous webcasts and also download the corresponding presentations.

Should you be interested in topics discussed during one of our German language webcasts, do not hesitate to contact the respective presenters – they will be delighted to provide you with additional information in the English language.

EMEA Dbriefs Legal Webcast

Business Process Outsourcing Negotiation and Contracting – Combining Commercial Operational and Legal Expertise for Better Business Outcomes 

Thursday 20 February 2025 | 12:00 GMT/13:00 CET (Please note this webcast will be 30 minutes)

Register now for our EMEA Dbriefs Legal Webcast in English language! For most service recipients, business process outsourcing (BPO) negotiation and contracting is a need which arises every few years, it is not business-as-usual. Service recipients are often faced with high value and complex agreements which need to be negotiated, and even with best-in-class external support, this can be challenging for busy internal teams. Our clients increasingly want combined specialist commercial, operational and legal support, because each of these elements are intertwined and all form part of the same negotiations and trade-offs. 

Register here

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