BAFA Report 2015/2016
Transcription
BAFA Report 2015/2016
Report 2015/2016 Energy. Promotion of economic development and SMEs. Foreign trade. Publishing data Herausgeber Federal Office of Economic Affairs and Export Control (BAFA) Press and Public Relations Frankfurter Str. 29-35 D-65760 Eschborn www.bafa.de The Federal Office of Economic Affairs and Export Control (BAFA) was awarded the audit certificate berufundfamilie® for its familyfriendly HR policy. The certificate is conferred by berufundfamilie gGmbH, an initiative of the non-profit Hertie foundation. Text and editing Federal Office of Economic Affairs and Export Control (BAFA) Press and Public Relations Design Federal Office of Economic Affairs and Export Control (BAFA) Press and Public Relations Date February 2016 Printed by Silber Druck oHG Photo credits © BAFA (title page, 5, 9 r., 14, 28, 29, 31, 33, 35 r., 36, 42, 57, 61, 63, 67, 75, 80, 81 l., 82 l., 87); © BMWi/Maurice Weiss (p. 4, 48); © rcfotostock – Fotolia.com (p. 8, 9); © vencav – Fotolia.com (p. 10); © Konstantin Yolshin – Fotolia.com (p. 13); © Syda Productions – Fotolia.com (p. 15, 25); © fotomek – Fotolia.com (p. 17); © johannesspreter – Fotolia.com (p. 19); © adisa – Fotolia.com (p. 20, 21); © Tomasz Zajda – Fotolia.com (p. 30); © Jürgen Fälchle – Fotolia.com (p. 32); © iStock.com/fatihhoca (p. 34, 35); © Stefano Oppo photographer Milano (p. 37); © Thaut Images – Fotolia.com (p. 38); © Kzenon – Fotolia.com (p. 39); © davis – Fotolia.com (p. 40); © Rawpixel.com – Fotolia.com (p. 41); © Kurhan – Fotolia.com (p. 44); © sveta – Fotolia.com (p. 46, 47); © ri° – Fotolia. com (p. 49); © Nataliya Hora – Fotolia.com (p. 50); © iStock.com/ monkeybusinessimages (p. 51); © iStock.com/FotografiaBasica (p. 52); © M. Johannsen - Fotolia.com (p. 54, 55); © iStock.com/Daniel Barnes (p. 56); © iStock.com/narvikk (p. 59); © almagami – Fotolia.com (p. 60); © European Community (p. 65); © NASA (p. 69); © EnBW (p. 70); © iStock.com/luchschen (p. 74); © artemegorov – Fotolia.com (p. 76); © Ezume Images – Fotolia.com (p. 77); © EADS Astrium (p. 78); © Masson – Fotolia.com (p. 79); © iStock.com/Jennifer Borton (p. 81 r., 82r., 83); This brochure is published as part of the public relations work of the Federal Office of Economic Affairs and Export Control. It is distributed free of charge and is not intended for sale. The distribution of this brochure at campaign events or information stands run by political parties is prohibited, and information or advertising shall not be inserted in, printed on, or affixed to this publication. This publication and others can be obtained from: Federal Office of Economic Affairs and Export Control - Press and Public Relations E-Mail: [email protected] www.bafa.de Central procurement service: Tel.: +49 6196 908-1452 Fax: +49 6196 908-1496 Contents Introductory Remarks 4 Preface5 BAFA highlights - 2015/2016 6 Energy8 Special Compensation Rule................................................................................................................................................................................................10 Federal Agency for Energy Efficiency (BfEE)..............................................................................................................................................................14 Energy consultation...............................................................................................................................................................................................................15 Energy efficiency.....................................................................................................................................................................................................................19 Heating with renewable energy.......................................................................................................................................................................................25 Raw materials............................................................................................................................................................................................................................30 Promotion of Economic Development and SMEs 34 Foreign market development............................................................................................................................................................................................36 Consultation and funding measures..............................................................................................................................................................................41 Skilled labour............................................................................................................................................................................................................................44 Film and technology..............................................................................................................................................................................................................48 Trade and industry..................................................................................................................................................................................................................50 Foreign Trade 54 Export control...........................................................................................................................................................................................................................56 Chemical Weapons Convention (CWC)........................................................................................................................................................................74 Import restrictions.................................................................................................................................................................................................................76 Cross-border transfer of radioactive substances......................................................................................................................................................77 Satellite data security.............................................................................................................................................................................................................78 Maritime security....................................................................................................................................................................................................................79 The Federal Office of Economic Affairs and Export Control (BAFA) 80 Overview.....................................................................................................................................................................................................................................81 HR management......................................................................................................................................................................................................................82 Evaluating the success of funding programmes......................................................................................................................................................86 Press and public relations....................................................................................................................................................................................................87 Organisation chart..................................................................................................................................................................................................................88 4 I N T R O D U C TO RY R E M A R K S Introductory Remarks Over the last year, political debate in Germany has been dominated by the topic of international armed conflicts and the critical question of how, and to what extent, refugees can be granted protection. Despite the barrage of bad news, Germany remains economically strong and is well equipped to tackle the challenges. Most notably, unemployment in 2015 reached its lowest level for 24 years. The German labour market is therefore proving once again to be highly robust in the face of ongoing challenges in the global economy. This economic resilience is largely due to the companies operating in Germany. They are proving their competitive mettle internationally with a range of innovative products and services. It is the Federal Government‘s role to help them continue to do so. In terms of energy policy, we initiated a number of important decisions over the past year. For example, “Electricity Market 2.0” (Strommarkt 2.0) was adopted by the Federal Cabinet. This initiative focuses on security of supply at European level and optimum integration of renewable energy into the market. The Federal Cabinet adopted the “Energy Efficiency Strategy for Buildings” with the aim of having a virtually climate-neutral building stock by 2050. Another important contribution towards climate protection was the amendment of the Combined Heat and Power Act (KWKG). The renewable energies Market Incentive Programme (MAP) was revised as part of the National Action Plan on Energy Efficiency (NAPE). All these measures are designed to sustain an affordable, safe and environmentally friendly energy supply. In 2015, we created conditions favouring the digitisation of the economy and “Industry 4.0” in particular. For example, the “Digital Technologies for the Economy” support programme is designed to enable companies to put creative ideas and new scientific findings into practice more quickly and effectively. This is key for our innovative capability and for maintaining our technological sovereignty. We have also stepped up our focus on entrepreneurship in the last year. Several measures and programmes for informing, advising and financing entrepreneurs were developed, expanded and improved. The armed conflicts that have raged over the last year have once again highlighted the importance of effective export control. Whether or not exports are approved still depends in each individual case on foreign and security policy considerations. Last year, we tightened regulations on the export of small weapons and plugged control gaps in the export of surveillance technologies. Germany is playing a leading role in this regard in the EU. We have continued to pursue a restrictive export control policy for dual-use goods. Lastly, the planned implementation of post-shipment controls should improve the end-use control of military equipment. While export control will remain necessary, particularly in these times, we also want to minimise the associated effort for exporting companies now and into the future. I would like to take this opportunity to thank BAFA employees for their work and commitment over the last year. I also wish them every success in the tasks ahead. Yours Sigmar Gabriel Federal Minister for Economic Affairs and Energy P R E FA C E 5 PREFACE As a key element of the “Energiewende”, the heating market was brought more sharply into focus over the past year. The Market Incentive Programme, devised to promote heating with renewable energy, was thus amended at the start of the year. As a result, the number of applications increased significantly again in 2015. Following the exemption from the EEG surcharge obtained by some energy-intensive companies, we have once again managed to safeguard numerous jobs in industry against international competition. The German economy remains on a path of sustainable growth. Notwithstanding the many symptoms of political and economic crisis, we expect an increase of 1.7% in gross domestic product (GDP) in 2016. The continuing growth is supported primarily by strong domestic demand brought about by significant increases in real earnings and growing employment. Low oil prices, a favourable exchange rate for the euro and the continuing moderate increase in exports are also boosting economic activity, despite the decline in growth in emerging economies. Against this backdrop, the Federal Office for Economic Affairs and Export Control (BAFA) is supporting the Federal Government‘s policy in its various areas of responsibility: With the adoption of the National Action Plan on Energy Efficiency (NAPE) in 2014, energy efficiency joined renewable energy as the cornerstone of Germany’s “Energiewende” or transformation of the energy system. Consequently, BAFA has taken on many new responsibilities: grants for energy consultations in small and medium-sized companies, consultations for energy-conservation contracting and the setting up of local authority energy efficiency networks are just some examples of new support programmes. It is also now mandatory for larger companies to carry out an energy audit by the end of 2015. The aim of this programme is to help companies identify where there is potential to conserve energy. This year, the “Energy efficiency communications campaign” conducted by the Federal Ministry for Economic Affairs and Energy (BMWi) is to raise more awareness of the topic among companies, local authorities and citizens. 2015 was an eventful year, particularly in terms of foreign policy and security policy. Events of particular note included the ongoing conflict with Russia, unrest in the Middle East, onset of the refugee crisis and the conclusion of negotiations on the Iranian nuclear programme. The agreement with Iran is a boon for German companies from both an economic and political perspective. We will work with businesses to structure the new procedures as efficiently and transparently as possible. The amendment of the EC Dual-Use Regulation in 2016, in which we played a close supporting role last year, also has a critical influence on companies. Meanwhile, in the area of economic development, there is also much to report. Against the backdrop of the refugee situation, the introduction of 150 “welcome guides” in chambers of commerce and business organisations as part of the BAFA “Tailored placement” support programme was highly relevant and timely. The chief role of these guides is to help small and medium-sized companies with the task of integrating refugees. The “Promoting entrepreneurial expertise” (advisory support) programme was also amended at the start of the year. Now consolidated with the programmes supported by the KfW Development Bank, it will be implemented in full by BAFA from 2016. This is a great endorsement of our work. I am glad to see that BAFA‘s departments are now also becoming increasingly involved in the planning and draft stages of amendments to laws or directives. This undoubtedly reflects BAFA‘s high-calibre work and expertise. In addition to other support programmes in the area of energy, there are plans, for example, to base the Audit Oversight Body (AOB) in BAFA in mid-2016. I would like to take this opportunity to thank BAFA employees for their great commitment over the last year. My thanks also go to Federal Minister Sigmar Gabriel for his trust and support in supplying the necessary resources. I hope readers find this year’s report to be of interest! Yours Dr. Arnold Wallraff President of the Federal Office of Economic Affairs and Export Control 6 B A FA H I G H L I G H T S 2015/2016 BAFA HIGHLIGHTS 2015/2016 PARTICULATE FILTER SYSTEMS 1. January 2015 Support is restored for the retrofitting of diesel vehicles with particulate filters. “P. 32” 1 January 2015 ENERGY EFFICIENCY NETWORKS IN MUNICIPALITIES The new programme for promoting energy-efficiency networks in municipalities comes into effect. “P. 16” 1 January 2015 CONTRACTING CONSULTATIONS Funding is provided for consultations on energy-conservation contracting with immediate effect. “P. 15” 26 February 2015 EXPORT CONTROL DAY The 9th Export Control Day takes place, based on the theme “Export control in transition”. “P. 62” 15 March 2015 INNOVATION PRIZE Award ceremony for the federal prize funded by BAFA for outstanding innovative services for the skilled craft sector at the IHM in Munich. “P. 51” 1 April 2015 MARKET INCENTIVE PROGRAMME Integration of the Audit Oversight Body (AOB) as new department 6 in the Federal Office for Economic Affairs and Export Control “P. 88” 1 April 2015 ENERGY AUDITS on-SMEs are now required to conduct an energy audit and to present the results to BAFA on request. “P. 20” 31 August 2015 INVEST Since 2013, business angels and investors have raised more than EUR 100 million in venture capital for start-up companies. “P. 41” B A FA H I G H L I G H T S 2 0 1 5 / 2 0 1 6 7 3 December 2015 INFORMATION DAY ON EXPORT CONTROL BAFA informs companies about new legal developments and changes in administrative practice. “P. 62” 1 January 2016 COMBINED HEAT AND POWER The amended act relating to the upkeep, modernisation and expansion of combined heat and power plants comes into force. “P. 21” 1 January 2016 VOCATIONAL TRAINING WITHOUT BORDERS 16 January 2016 IMPLEMENTATION DAY Launch of support programme for vocational consultations to increase cross-border mobility of trainees and skilled young people. “P. 44” Iran embargo: The lifting of sanctions announced on 18 October 2015 comes into effect. “P. 61” 25 February 2016 EXPORT CONTROL DAY First half of 2016 PILOT PROGRAMME FOR ENERGY SAVING METERS 10th Export Control Day with Minister of the Chancellery Peter Altmaier takes place, focusing on the theme of lifting of sanctions on Iran. Support programme for energy saving meters gets underway. Mid-2016 AUDIT OVERSIGHT BODY Integration of the Audit Oversight Body (AOB) as new department 6 in the Federal Office for Economic Affairs and Export Control “P. 88” 8 ENERGY ENERGY BAFA is committed to driving the transition to renewable energy and successfully implementing the Federal Government‘s climate protection targets. ENERGY 9 Frank Dietz, Director General for Energy BAFA has helped drive Germany’s transition to renewable energy for many years now. It is entrusted with conducting a variety of tasks to promote the efficient and economical use of energy and the further expansion of renewable energy. Meanwhile, as part of the Special Compensation Rule for the Renewable Energy Sources Act, approximately 2,200 particularly energy-intensive companies in the manufacturing sector are partially exempt from the payment of the surcharge for renewable energy. Without this exemption, the international competitiveness of these companies would be damaged. It allows them to continue manufacturing in Germany and also safeguards a large number of jobs in Germany. In addition, 135 railway companies are exempt in order to support this means of transport, which is particularly environmentally friendly, against competition from road and air travel. The National Action Plan on Energy Efficiency (NAPE), which outlines the Federal Government‘s efficiency strategy for the 18th legislative term, is the key focus of measures to increase energy efficiency. It includes a broad range of measures, including in particular investments in energy savings and the consolidation of consultancy and information services. The NAPE measures are being implemented as a matter of priority. Such measures include the mandatory energy audit for non-SMEs, the national Top Runner Initiative and the National Efficiency Label for old heating systems. The Efficiency Strategy for Buildings was developed as part of the transformation in heating systems (“Wärmewende”) in the building sector. In addition, the guidelines for the Market Incentive Programme were adapted and expanded to include the energy efficiency incentive programme. Additional support measures are planned, based on the decision made by the Coalition Committee on 1 July 2015. BAFA‘s activities in the area of energy have been interlinked more closely and concentrated in one department to take account of the broad spectrum of existing and new demands. The activities and issues handled by the BAFA-based Federal Agency for Energy Efficiency (BfEE) have expanded accordingly. Besides the conceptual support provided by the Federal Ministry for Economic Affairs and Energy in implementing the NAPE measures, substantive project support is also offered for the energy efficiency communications and call-to-action campaign. 10 ENERGY Special compensation rule The EEG surcharge Cap on EEG surcharge In Germany, public utility companies are obliged to prioritise electricity that is generated using renewable energy when they are purchasing electricity. The electricity is then sold by the transmission system operators on the Leipzig European Energy Exchange. Since the revenues thus generated are still lower than the feed-in tariffs payable under the Renewable Energy Sources Act (EEG), a revenue shortfall remains. This shortfall, combined with other costs for feeding in, transferring and marketing the electricity represents a surcharge known as the EEG surcharge. The surcharge is passed on in turn by the public utility companies to all electricity consumers in Germany. In this way the redistribution mechanism, as it is known, is completed. By way of the Special Compensation Rule, BAFA will, on request, cap the EEG surcharge on electricity consumed by manufacturing companies or railway companies that incur significant energy costs. The aim of the cap is to maintain the international competitiveness of the beneficiary companies – in the case of railway companies, their ability to compete with other means of transport (intermodal competition) – and consequently to preserve employment in these companies. ENERGY Legal basis BAFA acts in accordance with Section 63 ff. of the Act for the Expansion of Renewable Energy Sources (EEG 2014). These provisions were drafted after the European Commission initiated a state aid investigation procedure into EEG 2012, and specifically also into the Special Compensation Rule, at the end of 2013. At the same time, the European Commission‘s new energy and environmental aid guidelines were enacted in the first half of 2014 and, in accordance with those specifications, the Act for the Expansion of Renewable Energy Sources (EEG 2014) was drafted and notified. This legislation has been in force since 1 August 2014. A supplement to this Act regarding railway companies was implemented by the First Act Amending the Renewable Energy Sources Act, which came into effect on 31 December 2014. A further amendment was implemented by the Second Act Amending the Renewable Energy Sources Act, which came into effect on 3 July 2015. This added hardening plants and forges to the group of companies entitled to submit applications. 11 Application procedure and effect of surcharge caps Applications may be filed by energy-intensive companies in the manufacturing sector and railway companies. Energy-intensive companies are deemed to be companies on List 1 or List 2 in Appendix 4 of the Act. List 1 covers 68 industries classified according to the sectors defined by the Federal Statistical Office; List 2 now covers 153 industries. In addition, there is a so-called hardship clause for certain companies that were granted surcharge reductions for 2014 but can no longer be supported because of the amendment. There is also an adjustment clause (“Doppelungsregelung”) for the years 2015–2018, which specifies that eligible companies need pay no more than double the previous year‘s EEG surcharge for each of these years. Applications must still be made for specific delivery points. Each of these delivery points must have consumed at least 1 gigawatt hour (GWh) of electricity in the last business year before submitting their application. The energy intensity to be proved must, depending on the individual case, amount to 17% for List 1 companies; 20% for List 2 companies; and 14% for all other companies. All applicants must prove the existence of an energy management system. Under the standard cap, the beneficiary companies pay 15% of the standard EEG surcharge, but at least 0.1 cent per kilowatt hour (0.05 cent in the case of the non-ferrous metal industry). The charges are capped by the maximum amount at 4% (known as the cap), or 0.5% (known as the super cap) of the gross value added, depending on whether the energy intensity is above or below 20%. The beneficiary railway companies must pay 20% of the standard EEG surcharge. 12 ENERGY The figures for 2015 As in previous years, most of the applications come from companies in the paper, non-ferrous metal, iron/steel and chemical sectors. Table 1 shows the ten largest electricity consumers (claimed electricity output). There was a slight decrease in the total number of applicant companies in 2015 compared to the previous year: the number fell from 2,462 to 2,305. Similarly, the number of delivery points claimed for fell from 3,409 to 3,145. According to the current stage of the procedure, 2,075 companies with 2,746 delivery points have received a cap notice (Begrenzungsbescheid) (previous year: 2,235 companies with 2,937 delivery points). Table 1: The privileged quantity of electricity therefore fell slightly compared to the previous year from approximately 108 TWh to around 106 TWh. Among hardening plants and forges, 88 applications for 109 delivery points with approximately 883 GWh in claimed electricity output were submitted retroactively for a cap in 2015. Table 2 shows the regional distribution of the delivery points claimed for and their electricity output. Additional findings relating to the procedure are published and presented in greater detail in a separate background paper on the Federal Ministry for Economic Affairs and Energy and BAFA homepages. Distribution of the most energy-intensive sectors by claimed electricity output (as of 18 March 2016) Industry sector code Industry sector Companies Delivery points Electricity output GWh 4900 Railway companies 135 135 12,482 1712 Manufacture of paper and paperboard 88 99 11,212 2410 Production of pig iron, steel and ferrous alloys 34 43 10,024 2016 Manufacture of plastics in primary forms 53 70 9,714 2442 Aluminium production 19 31 8,164 2014 Manufacture of other organic basic chemicals 33 50 8,053 2011 Manufacture of industrial gases 20 74 6,095 2351 Manufacture of cement 26 55 3,588 2451 Casting of iron 83 97 3,113 1920 Processing of mineral oils 11 16 3,029 Table 2: Regional distribution of the delivery points claimed for (as of 18 March 2016) Land Delivery points Electricity output GWh Baden-Württemberg 324 7,187 Bavaria 454 14,855 Berlin 40 1,314 Brandenburg 119 5,157 Bremen 20 265 Hamburg 33 4,531 Hesse 162 9,748 Mecklenburg-Western Pomerania 71 1,165 Lower Saxony 324 11,405 North Rhine-Westphalia 715 34,088 Rhineland-Palatinate 166 6,231 Saarland 44 1,643 Saxony 224 5,288 Saxony-Anhalt 217 6,150 Schleswig-Holstein 71 2,013 Thuringia 150 2,461 Foreign 11 98 Total result 3,145 113,599 * Foreign refers to non-German railway companies that travel on routes within federal territory. ENERGY 13 Average electricity prices – New for 2016 Outlook In its guidelines for state environmental protection and energy aid, the European Commission has stipulated that, in future, the intensity of electricity costs is to be measured on the basis of average electricity prices applying to electricity cost-intensive companies with similar electricity consumption levels. This measure is designed to prevent any artificial increases in the electricity cost intensity of a company due to price fixing of the electricity price. In light of the evolving nature of the EEG, further amendments to the application procedure for the Special Compensation Rule are to be expected. BAFA is addressing these changes and actively supporting the necessary processes in order to ensure their continued effective implementation in practice. In addition, BAFA will also contribute to the Federal Government‘s progress report on the EEG. For this reason, the EEG 2014 allows the Federal Ministry for Economic Affairs and Energy to set requirements by ordinance for calculating the standardised electricity consumption as part of the calculation of electricity cost intensity and to calculate average electricity prices. BAFA has closely monitored and supported the drafting of the ordinance by the Federal Ministry for Economic Affairs and Energy. The EU requirements have been transposed into a corresponding ordinance, the Special Compensation Rule Average Electricity Price Ordinance (DSPV), as it is known, is currently the subject of interministerial consultation (as of mid-February 2016). 14 ENERGY Federal Agency for Energy Efficiency (BfEE) Over the past year, the Federal Agency for Energy Efficiency continued its work on developing specific, targeted measures to stimulate investment in energy efficiency in various sectors. Several new and existing support programmes were thus further developed for the Federal Ministry for Economic Affairs and Energy. Improving energy efficiency is a core element of the transition to renewable energy (Energiewende). It is also a key prerequisite for achieving the ambitious energy policy objectives at both national and European level. Energy efficiency plays a major role in ensuring an economically sustainable energy supply for all stakeholders, security of supply and climate protection. The Federal Agency for Energy Efficiency was established in 2009 to implement Directive 2006/32/EC of the European Union on energy end-use efficiency and energy services and the resulting German Energy Services Act (EDL-G). The agency supports the Federal Ministry for Economic Affairs and Energy (BMWi), which is responsible for energy efficiency at federal level, in all matters relating to energy efficiency and energy saving. One particular area of focus is supporting the implementation processes for the National Action Plan on Energy Efficiency (NAPE). Over the last year, this included in particular the work on the Energy Efficiency Strategy for Buildings, the project management of the National Top Runner Initiative (NTRI) which will have run over several years and a variety of activities within the framework of the Energiewende platforms for energy efficiency and buildings, including the working groups that have been established. In the current year, additional key issues will be determined using the Federal Ministry for Economic Affairs and Energy‘s energy efficiency communications strategy and its overall energy consulting strategy. Other core tasks performed by the Federal Agency for Energy Efficiency include: monitoring and evaluating the energy services market; identifying any market barriers and developing market support measures based on these findings. Furthermore, the agency is tasked with reviewing the national final energy consumption savings target and monitoring the (final) energy savings made and the related strategies defined for this purpose. Lastly, the agency complies with an array of information and reporting obligations, most of which are fulfilled through its homepage at www.bfeeonline. de. As in previous years, the Federal Agency for Energy Efficiency once again represented Germany at an international level as the German delegation in the Concerted Action for the Energy Efficiency Directive (CA EED). This EU project serves as a forum in which all EU Member States can share experiences in relation to the practical implementation of the Energy Services Directive and the Energy Efficiency Directive. It also participates in other relevant European events, e.g. European Union committee meetings or the European Energy Network (EnR), the network of European energy agencies. The Federal Agency for Energy Efficiency has operated an online portal at www.anbieterliste.info since 2011, which includes a list of providers for energy services, energy audits and other energy efficiency measures. On the one hand, it informs end users about available energy services and allows them to compare registered providers; on the other hand, it allows providers of energy services to list their details at a central location. All providers may list their details on the portal and the service is free of charge for all participants. The Federal Agency for Energy Efficiency again relied on the support of expert partners to perform its extensive portfolio of tasks in 2014. It continued to assign various studies to internationally experienced research institutes and other scientific organisations and supported the associated processes. The advisory board of the Federal Agency for Energy Efficiency also continued its work. This board consists of thirteen representatives from energy service providers, energy suppliers and independent professional experts. It advises the Federal Agency as it discharges its duties under the Energy Services Act and also acts as an important interface between the government and market participants. With this extensive and challenging portfolio of tasks and responsibilities, the Federal Agency for Energy Efficiency plays an important role in supporting the Federal Government‘s energy efficiency policy. It is facilitating the shift to renewables in an economically sound manner, with the aim of establishing an affordable, safe and environmentally friendly energy supply. ENERGY 15 Energy consulting Energy-conservation contracting This support programme was launched in early January 2015 and provides funding to local authorities, companies and institutions in which local authorities have a majority holding, non-profit organisations and recognised religious communities as well as small and medium-sized companies (SMEs). The funding is used to help these organisations hire trained contracting consultants and thus tap into existing potential for conserving energy in their properties. The purpose of the support programme is to eliminate any obstacles preventing potential stakeholders from going ahead with energy conservation projects using contracting solutions. First, the clients‘ properties and facilities are inspected by an expert to determine whether they are fundamentally suitable for efficiency measures to be implemented as part of a contracting process. Recommendations are made on selecting the energy conservation model likeliest to achieve the best results. Based on this analysis, professional support for implementing an energy-conservation contracting project is provided or, if this does not prove to be suitable, professional support is provided for tendering for other contracting models. The programme thus helps to fulfil the EU requirement for the public sector to set an example in increasing energy efficiency. It also implements Article 18 of the EU Energy Efficiency Directive, according to which the Member States are required to support the energy services market. 16 ENERGY Energy consulting in the SME sector Under the current “SME Energy Consulting” support programme, which BAFA has successfully run since early 2015, small and medium-sized enterprises (SMEs) can avail of subsidised energy consultations as well as support for implementing energy efficiency measures provided by an energy consultant. The funding guidelines have been extended to the end of 2019, enabling companies to plan with greater confidence. Qualified, independent energy consultations are an important means of reducing information deficits, identifying the potential for saving energy within particular companies and ultimately helping those companies conserve energy. Energy consultations are designed to demonstrate the potential for economically viable energy efficiency measures in buildings, facilities and also in user behaviour. The aim of this programme therefore is to boost the number of SME energy consultations and thus unleash the existing potential for energy conservation. As part of the programme, energy consultants should also be available to help tap the identified potential for energy conservation, through to the execution of particular measures, in order to further increase the number of implemented consultations. Energy conservation in companies can make an important contribution to energy security in Germany and to climate protection. Companies with annual energy costs in excess of 10,000 euros are eligible for an 80% grant towards energy consultation costs, but no more than 8,000 euros in total. As of 1 January 2016, small companies that spend less than 10,000 euros on energy costs will receive a consultation subsidy of a maximum 1,200 euros, instead of 800 euros as was previously the case. In 2015, 2,238 applications for funding were received; a total of 10.3 million euros in funding was disbursed. The subsidised energy consultations are high-quality energy audits as defined by the EU Energy Efficiency Directive. These particular funding guidelines form part of the Federal Government‘s transposition of the EU Energy Efficiency Directive. Energy consulting and energy efficiency networks for local authorities Increasing energy efficiency in the public sector is a key area of activity in the National Action Plan on Energy Efficiency (NAPE), launched on 3 December 2014. In early 2015, the Federal Ministry for Economic Affairs and Energy set up a funding programme based on the Guidelines for promoting energy-efficient networks in municipalities, which addresses this target group. The Federal Republic of Germany is divided up into around 12,000 municipalities and rural districts which account for two-thirds of the final energy consumption in the entire public sector and offer considerable potential for energy conservation. By tapping into this potential, a significant contribution can be made to energy efficiency and climate protection, while also boosting the public sector’s role model profile in increasing energy efficiency and reducing energy consumption. One of the aims of the programme is to attract local authorities to shared networks, which should in particular promote the mutual sharing of experiences within projects relating to energy efficiency (“acquisition phase”). In the following network phase, which lasts several years, concrete potential is identified and, if possible, realised. This potential is presented, discussed and checked within the network for transferability to other network partners. The process is supported by a team of experts. By the end of the first year, the programme had already significantly exceeded expectations: an acquisition phase was approved for 38 networks; the network phase was approved for 9 networks. The support programme was extended with effect from 1 January 2016 and two eligibility criteria were added. It now also supports energy consultations that are applied for by local authorities and non-profit organisations for an energy-efficient renovation concept or the reconstruction of non-residential buildings. Grants are also provided for conducting energy analyses for public sewage plants. ENERGY Measures implemented using the Energy and Climate Fund A special fund known as the Energy and Climate Fund was set up to implement the Federal Government’s Energy Concept and to finance additional measures in the area of international climate and environmental protection. The Federal Ministry for Economic Affairs and Energy has transferred administrative responsibility to BAFA for various projects to be financed from this special fund. In 2015, BAFA provided 4.9 million euros in funding to the “Energy Check” project, conducted by the Federation of German Consumer Organisations and the Länder consumer organisations. The standardised checks are an extension of the consumer organisations’ range of energy consultation services and are intended to help consumers use energy more efficiently and economically in future. In almost 13,450 cases, private consumers were put in touch with knowledgeable and independent experts who gave them a convenient insight into ways of saving energy. In 2015, eight projects run by the German Energy Agency (dena), designed to increase energy efficiency and improve climate protection in buildings, were approved to the amount of approximately 2.7 million euros. In another dena project, funding worth 150,000 euros was granted as part of the programme for using renewable energy. Likewise, the dena “Car Label Information Platform” project, a measure for promoting a rational and economical energy supply, was allocated funding of approximately 132,000 euros. Furthermore, as part of an initiative for SMEs to boost the transformation of the German energy system (Mittelstandsinitiative Energiewende, MIE) agreed between the Federal Ministry for Economic Affairs and Energy, the Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety, the Association of German Chambers of Commerce and Industry and the German Confederation of Skilled Crafts, nine projects received funding of approximately 838,000 euros in 2015. The MIE initiative is scheduled to run until 2018. The MIE Initiative is designed to help SMEs recognise their existing potential to save energy and identify how they can exploit that potential by enhancing local communication, optimising information and consultancy services and improving the dissemination of knowledge, skills and the sharing of experiences. 17 Projects aimed at the economical and rational use of energy, the use of renewable energy and energy-saving audits for private consumers BAFA supports dena projects and campaigns at national and international level to boost energy efficiency and foster the economical and rational use of energy. In 2015, seven projects valued at some 3.9 million euros were funded in areas relating to energy efficiency and renewable energy. BAFA is responsible for approval, project monitoring and expenditure reports on the use of funds. BAFA also supports consultations for private consumers on ways to save energy and use renewable energy. These consultations are organised by the Federation of German Consumer Organisations (vzbv) in 18 consumer organisations. Since 1978, private consumers have been able to avail of these independent consultations. They can also access information from qualified architects and engineers through more than 760 support centres and information points nationwide. In addition to more than 64,000 consultations carried out on the premises of the consumer organisations, approximately 1,550 “detailed check” consultations took place at the consumer’s own home. Roughly another 10,700 consultations were carried out by telephone and almost 1.300 were conducted online. BAFA supported the Federation of German Consumer Organisations in 2015 with 5.8 million euros to carry out the project and also took responsibility for approval, project monitoring and expenditure reports. 18 ENERGY On-site energy audits Energy-efficient building renovation is a cornerstone of Germany‘s energy and climate policy. There is still enormous potential for saving energy within the country’s stock of residential buildings in particular. By now, many home and apartment owners may be aware that their building no longer meets every aspect of a modern energy efficiency standard. However, there is uncertainty about some of the specifics: What measures are possible and feasible? How is the economic value of these measures apparent? Is public funding available for energy-efficient building renovation? The support programme for on-site energy audits in residential buildings, developed by the Federal Ministry for Economic Affairs and Energy, is helping in this area. This support programme has been in existence for more than 20 years and has constantly been adapted in line with evolving energy policy. Among the variety of energy-saving consultancy services, the funding for on-site audits is a permanent fixture – not least because such audits are subject to high requirements in terms of independence and quality. Most energy consultants therefore consider this support programme to be an important factor in the success of the Energiewende. Nevertheless, an evaluation of the support programme carried out by the Federal Agency for Energy Efficiency (BfEE) on behalf of the Federal Ministry for Economic Affairs and Energy in 2013/2014 highlighted some areas in need of improvement. The ministry worked closely with the BAFA experts to respond to these shortcomings, drafting the guidelines of 29 October 2014. The new guidelines, which came into effect on 1 March 2015, are designed to make the programme more attractive by significantly increasing the grants and also aligning funding terms more closely with practical concerns. This, together with the multi-year duration of the programme, which currently runs until 31 December 2019, indicates the importance of this advisory support scheme within the Federal Government’s Energy Concept. The support programme is aimed at residential property owners and tenants. Specifically, the funding instrument is a grant to be paid to the energy consultant; the consultant must then reduce the consulting fee accordingly. In the case of apartment owners associations, the actual grant for the on-site audit can now be augmented by a special ‚explanatory grant‘, which takes on board the particular needs of this important target group. Applications may only be filed by energy consultants who have received the appropriate training and who are independent. An online procedure makes it easier for consultants to file the application and administer the expenditure report with respect to BAFA. The results of the on-site audit, known as the energy-efficient renovation concept, are documented in an energy audit report, which must be given and explained to the client receiving the advice. Under the new funding guidelines, there is now more flexibility with regard to what constitutes an on-site audit. Depending on their needs, customers can request an audit for a complete renovation to a home energy efficiency standard (Effizienzhaus) supported by the KfW Development Bank. Alternatively, customers can opt to have a building-specific redevelopment schedule drafted, if they initially intend to renovate just the systems technology or parts of the building. The proposals for a comprehensive, step-by-step, energy-efficient renovation mean that customers can stagger the renovation process, if required. Complete refurbishment at one stroke is rarely possible, mainly for financial reasons. Since on-site audits must also take account of economic factors and at least provide some indication as to possible federal funding, the validity of an energy audit report extends beyond that of a building energy certificate. The support programme therefore strongly encourages investments designed to save energy in residential buildings. In 2015, BAFA disbursed more than 5 million euros in funding for on-site energy audits. Compared to 2014, the number of applications increased by 9% to approximately 9,000. For the first time since 2009 this is once again higher than the corresponding previous year‘s figure. Those who are prepared to make their home more energy-efficient need expert advice and support to do so. The Federal Government’s energy-efficient expert list for support programmes has been compiled to help consumers find qualified, independent energy consultants. It is maintained by the German Energy Agency (dena), which acts as the coordinating body on behalf of the relevant federal funding authorities (Federal Ministry for Economic Affairs and Energy, BAFA and the KfW Development Bank). ENERGY 19 Energy efficiency Promoting energy management systems To achieve the energy efficiency targets set by the Federal Government, BAFA has been supporting energy management systems since 2013, on behalf of the Federal Ministry for Economic Affairs and Energy and using the Energy and Climate Fund. The Federal Ministry for Economic Affairs and Energy introduced some additional support options with its amended guidelines of 18 March 2015. The aim of an energy management system is to get a clear picture of energy consumption within a company and subject this consumption to systematic and continuous monitoring. In this way, companies across the industry, craft, trade and services sectors can achieve a considerable reduction in some of their energy costs. The programme funds the initial certification of an energy management system in accordance with DIN EN ISO 50001 or of an alternative system. It also funds the purchase of the measuring technology and software needed for an energy management system. Additional funding has now been made available for consultation, training and installation costs. The funding is awarded as a grant and is limited to a maximum of 20,000 euros per company within a period of 36 months in the event that the company avails of several funding measures. In principle, all companies with a headquarters or branch in Germany are eligible to apply for the funding. The measure to be funded must be implemented within Germany. Companies can submit their funding applications using a convenient electronic form. In 2015, BAFA disbursed approximately 366,000 euros in funding in this area. 20 ENERGY Energy audits Refrigeration and air-conditioning systems Under Article 8 Paragraph (4) of the EU Energy Efficiency Directive (2012/27/EU, EED), Member States are obliged to ensure that companies other than small or medium-sized companies (SMEs) carry out an energy audit by 5 December 2015 and have follow-on audits conducted, at intervals of at least every four years from the first energy audit, in an independent and cost-efficient manner by qualified or accredited experts or have these audits monitored in accordance with national legislation by independent bodies. The main objective of the National Climate Initiative, in existence since 2008 when it was launched by the Federal Government, is to reduce greenhouse gas emissions. It is planned to reduce these emissions by at least 40% by 2020 and by as much as 80% to 95% by 2050 compared to 1990 levels. To achieve this goal, investment support such as the programme promoting measures for refrigeration and air-conditioning systems will be implemented, among other measures. To implement Article 8 Paragraph (4) to (7) of the EED, the Energy Services Act (Energiedienstleistungsgesetz, EDL-G) was amended to oblige non-SMEs to carry out periodic energy audits. In this connection, BAFA was tasked with spotchecking the energy audits and providing a public list of people with the required qualifications to conduct an energy audit as referred to in Section 8 of the EDL-G. Affected companies are required to provide proof, by a particular deadline, of their completion of an energy audit or that they are exempt from this obligation. Failure to comply with the requirement to carry out an energy audit, correctly, punctually and in full, may result in a fine of up to 50,000 euros. Companies that falsely claim to be SMEs can also be liable to a fine. Under Section 7 (3) EDL-G, BAFA also maintains a public list (energy auditor list) with details of people who are professionally qualified to carry out energy audits in accordance with Section 8 EDL-G in the relevant companies. To be included in this list, prospective energy auditors must provide BAFA with proof of their expertise and reliability. Alternatively, energy auditors can also prove their expertise and reliability by providing relevant documentation to BAFA in the course of a spot-check. To help companies become familiar with the new instrument, BAFA has posted extensive information on its website, for example, in the form of a fact sheet on energy audits. In Germany, refrigeration plants and air-conditioning systems account for about 16% of total electricity consumed. Supported systems consume considerably less energy due to the use of highly efficient components and systems and consequently result in significantly lower carbon dioxide emissions when electricity is generated. Moreover, in many cases, refrigerants with a lower greenhouse effect than conventional refrigerants are used, such as carbon dioxide (CO 2). Direct emissions are also reduced as a result. In 2015, BAFA supported investment to the value of nearly 100 million euros in 252 systems with efficient refrigeration or air-conditioning technology and provided grants of nearly 18 million euros for this purpose. In terms of figures, one euro of grant aid therefore generated over five euros of investment in efficient refrigeration and air-conditioning technology. This aid was accompanied by further investment in peripheral system components and construction measures. Since the Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety launched the support programme in 2008, the sum of over 114 million euros has been dedicated to reducing emissions by tapping into existing potential and has been implemented in 1,315 concrete projects. ENERGY 21 Combined heat and power The funded investment volume amounts to nearly 620 million euros. Sorption systems represent an increasing share of the subsidised systems, which is a positive development. These systems are powered with waste heat and consume less electrical energy than traditional compression refrigeration systems. In 2015, 45 sorption systems were funded; this corresponds to a share of 17.7 %. Some 60 % of the subsidised systems were operated in the retail and wholesale trade, especially in supermarkets. One in three systems is used in the manufacturing sector, half of which again are used in the manufacture of food and beverages. The amended guideline on the promotion of measures for refrigeration and air-conditioning systems came into effect on 1 October 2015. Since that date, municipalities and local municipal authorities, non-profit organisations, special-purpose associations and owner-operated municipal enterprises, schools, hospitals and religious institutions may submit applications for funding. Previously, only companies could apply. There are plans to further extend the guideline in 2016, on the basis of the Climate Action Programme 2020. In this case, for example, the application procedure will be simplified and the requirements adapted to the greenhouse warming potential of the refrigerants. The German and European climate protection objectives are challenging. Using high-efficiency combined heat and power plants is a key element in achieving the Federal Government‘s energy policy objectives. The distinctive feature of this technology is that electricity and usable heat are generated in just one combustion process, i.e. they are generated simultaneously. In terms of fuel, particularly high overall efficiency rates are achieved. This is beneficial particularly with regard to the resource-efficient use of fossil fuels such as petroleum, natural gas or lignite, which are only available in limited amounts. The reduction in emissions associated with this fuel saving contributes significantly to the protection of the environment. Furthermore, the financial benefits resulting from the fuel saving make the use of CHP technology particularly attractive. Using CHP plants to cover electricity and heating requirements in hotels, swimming pools, hospitals, private households, schools, municipal energy utilities, retirement homes, nursing homes, industrial and manufacturing enterprises and residential complexes is an increasingly popular option. The electricity generated can be fed into a public power grid and used to cover the owner‘s own requirements. The usable heat that is generated can be fed into district heating networks, used to heat specific spaces or to heat water. It can also be used for cooling purposes or as process heat (e.g. in industry for drying plants or in smelting installations). 22 ENERGY Support measures under the Combined Heat and Power Act Table 3: Since 2002, the Combined Heat and Power Act (KWKG) has offered incentives for investing in CHP technology. BAFA issues authorisations, upon application, for new, retrofitted and modernised CHP plants, new or expanded heating and cooling networks, and new heat storage and refrigeration storage systems. Once a CHP plant, a heating or cooling network, or a storage system has been authorised by BAFA, the plant operator can obtain payment from the grid operator for the generated CHP electricity on the basis of the authorisation. Payment of the bonus under the terms of the Combined Heat and Power Act is financed by a surcharge on the electricity bills of final consumers. The charge is relatively small, as the bonus amount is limited to 1.5 billion euros each year. For example, the average household with an annual electricity consumption of 3,000 kWh paid approximately 7.60 euros in 2015. The Combined Heat and Power Act is therefore a highly cost-effective and efficient instrument. Moreover, the Act is regularly reviewed to ensure it is achieving its goals. In 2014, an interim review of the development of CHP electricity generation in Germany was conducted in light of the energy and climate policy objectives of the Federal Government and the economically viable operation of CHP plants. The results of this interim review provided a basis for the amendment to the Combined Heat and Power Act, which took effect on 1 January 2016. Since the Act came into force on 1 April 2002, BAFA has authorised around 51,100 combined heat and power plants, of which 4,721 were authorised in 2015. Approximately 90% of these plants have a power output lower than 50 kW. However, most of the CHP electricity eligible for bonuses is produced in plants with a power output of over 2 MW. Authorisations granted in 2015 for CHP plants Power output Number <= 2 kW 1,167 > 2 <= 10 kW 1,758 > 10 <= 20 kW 759 > 20 <= 50 kW 462 > 50 <= 250 kW 324 > 250 <= 500 kW 76 > 500 kw <= 1 MW 60 > 1 <= 2 MW 62 > 2 <= 10 MW 30 > 10 <= 50 MW 10 > 50 <= 100 MW 2 > 100 MW 2 Total result 4,712 Since the introduction of bonuses for heating and cooling networks in 2009, BAFA has granted 3,129 authorisation notices for network pipelines measuring 2,699 kilometres in length and a total bonus amount of 294.6 million euros. Investment in the construction and expansion of heat supply networks, on which the calculations for the bonus payments are based, currently amounts to 1.266 billion euros. This equates to an average bonus payment of approximately 23%.. Table 4: Authorisations granted in 2015 for heating and cooling networks Measure Number Construction of new network 426 Expansion of existing network 589 Network 23 Network consolidation 38 Total result 1,076 The funding of storage systems included in the Act in 2012 is rising steadily. Various major projects are currently underway. To date, 167 licences for a total storage volume of 61,270 m³ and a bonus amount of 8.6 million euros have been granted. Table 5: Authorisations granted in 2015 for heat storage and refrigeration storage systems Storage system size Number <= 5 m3 8 > 5 <= 50 m3 66 > 50 m3 65 Total result 139 ENERGY 23 Investment grants under the mini-CHP programme New funding guidelines To help harness the potential of combined heat and power in smaller properties, CHP plants with a power output of less than 20 kW (mini CHP plants) obtain funding in the form of an investment grant, in addition to feed-in tariffs. The grant applies for the installation of a mini-CHP plant in an existing building. On 1 January 2015, the amended guideline for the funding of CHP plants generating up to 20 kilowatts of electrical power came into effect. The amendment increased the basic funding in the low power range, introduced additional funding for particularly energy-efficient mini CHP plants and simplified the technical requirements. In 2015, BAFA paid grants amounting to 3.07 million euros for more than 1,300 plants with net investment costs of 39.6 million euros. On average, one euro of funding generated 30 euros of investment in energy-efficient mini CHP plants. Extremely energy-efficient CHP plants can also get a bonus payment in addition to the basic funding. The heat efficiency bonus is granted for CHP plants that are equipped with a (second) waste heat exchanger for the utilisation of calorific value and are connected to a balanced hydronic heating system. The heating efficiency bonus amounts to 25% of the basic funding. The electricity efficiency bonus is granted for CHP plants with a particularly high electrical efficiency. The following table provides an overview of the investment grants issued in 2015 by Land. Table 6: Mini-CHP plants funded in 2015, by Land Land Number FFunds granted in euros Baden-Württemberg 153 342,261 Bavaria 227 527,844 Berlin 29 75,290 Brandenburg 39 76,543 Bremen 13 38,865 Hamburg 8 15,447 Hesse 87 177,994 Mecklenburg-Western Pomerania 19 50,137 Lower Saxony 218 532,046 North Rhine-Westphalia 277 640,468 Rhineland-Palatinate 69 158,634 Saarland 5 8,779 Saxony 58 142,540 Saxony-Anhalt 36 89,159 Schleswig-Holstein 44 110,522 Thuringia 39 79,934 Total result 1,321 3,066,461 24 ENERGY Funding of generic technologies To achieve its targets for increasing energy efficiency, the Federal Government has established an Energy Efficiency Fund to promote rational and economical energy use. This fund will support, for example, high-efficiency generic technologies in small and medium-sized companies (SMEs), including Germany’s “Mittelstand”, or mid-size, mainly family-owned businesses. The aim is to tap into the existing potential for conservation within trade and industry and to save on resources. BAFA therefore offers several support options for SMEs that invest in high-efficiency technologies and thus ensure economical and rational energy use within their businesses in the long term. First, as part of the individual measures in this approach, funding can be provided for the net investment costs of replacing individual plants or assemblies with high-efficiency models, from a value of 2,000 to 30,000 euros per applicant. To be eligible for funding, measures must have proven final energy savings of at least 25% compared to the current level. In addition to the listed generic technologies in the area of individual measures, funding is also provided for new investments in heat recovery plants as part of systemic optimisation. Other items that are eligible for funding are: essential services for insulating piping, pumps and fittings, the energy consultation required to draft an energy conservation plan and purchases of measurement devices to determine energy consumption. The support programme has proven to offer attractive incentives to companies to save on electrical and thermal energy. Over the course of the programme, 36,258 applications were submitted, resulting in subsequent investments to the value of 809 million euros. Final energy savings of 516 GWh annually were achieved. Individual measures eligible for funding cover the following generic technologies: Table 7: Funding of generic technologies in 2015 2015 Individual measures Systemic optimisation •• Electrical motors and drives Number of applications 7,250 1,196 Payments € 39,718 million € 19,559 million •• Pumps Final energy savings (through applications granted funding) 290,240 GWh/a 203.781 GWh/a Triggered investments (through applications submitted) € 96,356 million € 154,481 million •• Fans in air-conditioning systems •• Compressed air systems •• Heat recovery in air-conditioning systems and compressed air systems •• Lighting systems based on LED technology (limited until 30 April 2015) Second, as part of what is known as Systemic Optimisation, funding is provided for the replacement and modernisation of at least two generic technologies, as of a net investment level of 30,000 euros, on the basis of an individual business plan. Funding can also be made available for replacing and modernising systems or system parts that help to enhance the energy efficiency of a generic technology, taking into account their integration within the overall system. Before any investment is made, an energy conservation plan must be drafted by an energy consultant as part of a detailed energy consultation. This plan must review and evaluate the use of high-efficiency generic technologies to optimise the applicant‘s system under consideration. The support programme in its current form ended on 31 December 2015. However, it is expected to continue in 2016 with some modifications. In particular, under the National Action Plan on Energy Efficiency (NAPE) and as part of the “Putting waste heat to work” initiative, there will be a greater focus on avoiding waste heat emissions and promoting the use of waste heat. ENERGY 25 Heating with renewable energy The heating market plays a pivotal role in the Energiewende, since 40% of our energy consumption is accounted for by heating and hot water. The Federal Government therefore wishes to increase the share of renewable energy in the heating market to 14% by 2020. It provides hundreds of millions of euros annually under the Market Incentive Programme (MAP) for this purpose. BAFA has successfully implemented this support programme for many years: generous investment grants are provided for solar thermal systems, biomass installations and heat pumps in single-family and two-family houses, multi-dwelling houses and commercial and public buildings. Citizens, companies and local authorities are eligible for grants. In total, approximately 1.7 million renewable energy systems have already been installed with BAFA‘s support. Recognising the important role of the MAP in the transformation of heating systems, the Federal Government introduced significant improvements to the programme as of 1 April 2015. In addition to a considerable increase in grants, accompanying investments in the heating system were also added to the catalogue of support measures. The programme has also been systematically opened up to the commercial sector: Investment grants of up to 50 % are designed to encourage businesses to take an active role in the transformation of heating systems, both in initiating new construction projects and modernisation measures. Large companies can now also submit applications for funding. In 2015, BAFA disbursed funds of almost 92 million euros on 38,155 plants. This prompted investment totalling 492 million euros. Demand was strongest for solar heat with 26,308 applications. A total of 24,771 applications were received in the biomass funding segment. BAFA received 15,917 applications in the heat pump segment. In 2016, BAFA expects a further increase in demand for heating systems based on renewable energy, as the focus of federal policy is increasingly on the building sector and heating market. The Energiewende cannot succeed unless there is a corresponding shift or transformation in heating systems. 26 ENERGY Table 8 Part 1: Plants funded in 2015 for the MAP, by Land Land Solar heat Biomass Heat pumps Solar innovation Baden-Württemberg 3,904 3,302 667 150 Bavaria 4,215 5,349 819 242 Berlin 63 18 19 5 Brandenburg 385 542 148 14 Bremen 35 6 2 2 Hamburg 38 16 2 9 Hesse 1,017 1,157 206 28 Mecklenburg-Western Pomerania 195 204 56 8 Lower Saxony 1,148 831 239 47 North Rhine-Westphalia 2,097 1,313 744 119 Rhineland-Palatinate 754 915 209 16 Saarland 185 169 39 2 Saxony 797 1,017 261 30 Saxony-Anhalt 404 449 93 8 Schleswig-Holstein 337 256 96 15 Thuringia 714 891 87 16 Total result 16,288 16,435 3,687 711 Solar heating plants Biomass plants In terms of numbers, solar heat regained the top spot in 2015 with a total of almost 17,000 funded plants. Flat-plate collectors accounted for the largest group, with approximately 12,600 installations, followed by vacuum tube collectors (4,200) and air collectors (200). The total collector area of the funded plants covered an area measuring 196,700 m². This corresponds to an average collector area of 12 m² per funded plant. In 2015 nearly 16,800 plants were supported in the “Biomass plants” segment. With 8,000 installations, pellet boilers accounted for the strongest subgroup. They were followed by split log carburettor boilers (6,800), wood chip boilers (1,200) and pellet ovens (800). The installed nominal capacity of all these biomass heating plants totalled 416,000 kW. Total funding amounted to approximately 43.5 million euros, which corresponds to an average grant of approximately 2,600 euros per biomass plant. The Federal Government also covered roughly 18% of the investment costs in this segment. This means that specific investments amounting to 239 million euros were triggered by BAFA‘s support. As wood heating systems are carbon-neutral, this represented a significant contribution to the Energiewende in the heating market. Total funding amounted to approximately 35 million euros. This equates to an average grant of 2,060 euros per solar plant. The Federal Government covered approximately 18% of investment costs in this segment. Specific investments amounting to 191.5 million euros were incentivised by BAFA‘s support. ENERGY Table 8 Part 2: 27 Plants funded in 2015 for the MAP, by Land Land Biomass innovation Data visualisation Additional optimisation Number Baden-Württemberg 45 74 0 8,142 Bavaria 114 248 8 10,995 Berlin 0 11 0 116 Brandenburg 3 9 0 1,101 Bremen 1 6 0 52 Hamburg 0 3 0 68 Hesse 18 124 1 2,551 Mecklenburg-Western Pomerania 4 13 0 480 Lower Saxony 14 42 1 2,322 North Rhine-Westphalia 29 45 1 4,348 Rhineland-Palatinate 21 52 0 1,967 Saarland 5 14 0 414 Saxony 10 6 2 2,123 Saxony-Anhalt 7 7 0 968 Schleswig-Holstein 5 57 1 767 Thuringia 10 23 0 1,741 Total result 286 734 14 38,155 Heat pumps The segment for high-efficiency heat pumps jumped ahead to third place in the overall breakdown of funded plants, following the amendment to guidelines in April 2015. Just under 16,000 applications were received from this segment. However, since most applications must be submitted as part of the two-step application procedure before a project actually starts, some of the measures that received approval for funding could not go ahead. For this reason, only 3,700 measures were supported in 2015. The biggest group in this segment was air/water heat pumps with approximately 1,800 installations, followed by brine-to-water heat pumps (1,600) and water-to-water heat pumps (250). The installed nominal capacity of all these plants totalled 42,000 kW. Total funding amounted to approximately 12 million euros, which corresponds to an average grant of approximately 3,200 euros per plant. In this case, the Federal Government covered roughly 20% of the investment costs. Specific investments amounting to more than 60 million euros were thus incentivised by BAFA‘s support. As heat pumps use renewable environmental heat from the ground, groundwater or air and significantly reduce carbon emissions compared to gas or oil heating, this also made an important contribution to climate protection. Solar heat in multi-dwelling houses and solar process heat BAFA paid particularly attractive grants for solar heat plants in multi-dwelling houses and non-residential buildings (an average of 6,075 euros) and for using solar heat in industrial and commercial production processes (an average of over 24,000 euros). Of the 17,000 funded solar thermal systems, just under 700 projects received this especially high level of funding. 28 ENERGY Figure 1: Grants awarded in 2015 for the MAP, by Land Schleswig-Holstein € 1,921,457 Mecklenburg-Western € 1,123,898 Hamburg € 206,208 Pomerania Bremen € 118,954 Brandenburg € 2,548,886 Lower Saxony € 5,622,073 Berlin € 320,696 Sachsen-Anhalt 2.319.516 Euro North Rhine-Westphalia € 11,748,095 Saxony € 5,215,210 Hesse € 6,073,588 Thuringia € 3,886,377 Rhineland-Palatinate € 4,667,588 Saarland € 996,169 Bavaria € 26,329,854 Baden-Württemberg € 19,182,478 ENERGY Ambassadors of the Market Incentive Programme Local authorities (municipalities) have a leading role to play in the transition to renewable energy, since they interface with the public in a variety of ways and can therefore directly encourage home owners to upgrade their heating systems. For this reason, BAFA has established strategic partnerships with approximately 180 cities and local authorities. The aim of the partnership in each case is to create synergies between municipal climate protection activities on the ground and the Market Incentive Programme. In this way, the local authorities become “ambassadors” for the Market Incentive Programme. BAFA has also networked with several additional multipliers (energy consultants, architects, banks, industry associations, chambers of industry and commerce and gas emission technicians) to strengthen demand for modern, environmentally friendly heating. Ihre Kommune! Kommunaler Botschafter des BAFA-Marktanreizprogramms Picture: Your local authority: Representing the BAFA Market Incentive Programme at local level 29 Outlook for 2016 In its coalition agreement, the Federal Government had pledged to continue the successful Market Incentive Programme, thus sending out a clear signal about the Energiewende to the heating market. The initial detailed action plans for a transformation in heating systems (Wärmewende) in the building sector have now been developed. It is in this context that the consolidation and expansion of the Market Incentive Programme is playing a key role. Due to the many eligible funding criteria and an excellent funding environment, BAFA expects demand for the programme to increase significantly in 2016. In addition to the existing MAP guidelines, new guidelines on funding to expedite the modernisation of heating systems based on renewable energy sources are available since January 2016. These will generate further activity: The new Energy Efficiency Incentive Programme (APEE) provides assistance, in addition to the support for measures for the use of renewable energy sources in the heat market, for replacing heating systems while simultaneously boosting energy efficiency. Under this programme, a bonus of 20 % is awarded on top of MAP funding, as well as a set optimisation bonus of 600 euros. Cooperation with multipliers like local authorities, energy consultants, banks, industry associations and the Twitter information campaign will also ensure sustained demand for modern, environmentally friendly heating systems. 30 ENERGY Raw materials Energy and raw materials partnerships Natural gas The Federal Government is using international raw materials partnerships as a means of creating the conditions for a sustainable, internationally competitive supply of raw materials. Bilateral raw materials partnerships can open up new sources for industry. The liberalisation of energy markets and the growing importance of natural gas for the energy supply over the years have generated greater interest in up-to-date statistical information about the German natural gas market. In view of the objective of securing gas supplies in the long-term, up-to-date import data are especially in demand. Cross-border prices are also used by many gas providers as a basis for supply agreements. International energy partnerships focus in particular on supporting the growth of renewable energy and efficient energy technologies. In addition, these partnerships also help improve the export prospects of German companies with energy-efficient products and innovative power plants. BAFA’s task is to provide administrative support for the individual projects. This includes carrying out grant or contract award procedures and also the further processing of contracts. The project executors include the German chambers of industry and commerce abroad (AHK), the German Energy Agency and other executive organisations. Activities completed in 2015 included the establishment of various centres of excellence for mining and raw materials, organisation of diverse energy forums and set up of bilateral working groups. BAFA disbursed funds of approximately 1.55 million euros in this area in 2015. BAFA, on behalf of the Federal Ministry for Economic Affairs and Energy, determines Germany’s monthly volumes of natural gas imports and exports. How does BAFA arrive at the figures? Imports from non-EU states are determined on the basis of import control notifications. Receipts from EU countries are obtained from Intrastat (Intra-Community Trade Statistics System) returns. The natural gas import data collected in this way is published each month as a total quantity in terajoules (TJ) in the „EnergieINFO” newsletter. The data on imported quantities is also available on BAFA’s website, broken down according to main country of origin. BAFA also calculates the cross-border price in euros per terajoule by analysing the import control and Intrastat returns. This cross-border price is defined as the value of the natural gas at the German border and is also published monthly on the BAFA website. ENERGY 31 Petroleum In response to the worldwide oil crisis in 1973/1974, the Western industrialised nations established the International Energy Programme (IEP) as a means of efficiently tackling any potential disruption in petroleum supply. The International Energy Agency (IEA) was founded in Paris to coordinate the international emergency mechanism. The member states reached agreement on, for example, stock-keeping, coordinated consumption restrictions and oil redistribution in times of crisis. Within this system of crisis prevention, BAFA works closely together with the petroleum industry, the Federal Ministry for Economic Affairs and Energy and the German National Petroleum Stockpiling Agency to implement the International Energy Programme and the Energy (Security of Supply) Act within the National Emergency Strategy Organisation (NESO). BAFA enacts a range of measures to cope with the consequences of a possible disruption to supply in Germany, in particular for establishing a data system and administrative process to balance supplies. The crisis management system and operation of the data system are regularly tested at national and international level. BAFA regularly informs the International Energy Agency and the European Commission of the current supply situation and the latest trends in the German petroleum market. Once a month and in accordance with the Petroleum Data Act, BAFA collects data from the German oil companies, such as crude oil imports, refinery production, stocks, foreign trade and sales of petroleum products based on selected groups of customers. The results are published in the „Official Mineral Oil Datasheet“ and BAFA‘s “EnergieINFO” information service. These results also include information on the biofuel market. They are used as the basis for monitoring and analysing petroleum market developments and making decisions on energy and environmental policies. Furthermore, the results are included in the world oil statistics of the Joint Organisations Data Initiative Oil (JODI Oil). This initiative collates all international data, with a view to increasing transparency on the world petroleum market. Figure 2: Import of crude oil into Germany in 2015 (in millions of tons) Other 11.50 32.58 Russian Federation Egypt 2.89 Algeria 3.47 Azerbaijan 5.37 Kazakhstan 6.42 91.28 Nigeria 6.69 12.46 Norway United Kingdom 9.95 32 ENERGY Particulate filter systems The retrofitting of diesel vehicles helps to reduce the emission of harmful particles from these vehicles and improve the air quality, particularly in city centres. Due to the overwhelming demand for the support programme to retrofit particulate reduction systems in cars and commercial vehicles in 2012 and 2013 – one of the reasons being that several new environmental zones were recognised – the programme was run again in December 2014. Anyone wishing to install a particulate filter between 1 January and 31 December 2015 could get a grant of 260 euros. A total of 25,900 retrofits were supported with overall funds of 6.7 million euros in 2015. The funding period for these retrofits was extended just before the end of 2015 and the corresponding new funding guidelines were published in the Federal Gazette. According to these guidelines, retrofits completed between 1 January 2016 and 30 September 2016 are still eligible for a grant of 260 euros. Applications may be submitted up to and including 15 November 2016. Thanks to its high level of IT expertise and optimised administrative processes, BAFA will once again ensure a modern, responsive, streamlined, citizen-friendly and cost-effective application process. ENERGY 33 Subsidies for German hard coal mining Adjustment benefit BAFA allocates funding to coal mines from the federal budget and the budget of North Rhine-Westphalia for the sale of German hard coal used to generate energy and produce steel and also to cover the expenses incurred by mining companies due to closures. To alleviate social hardship caused by mine closures, older employees can receive adjustment benefit for up to five years, provided they are entitled to receive one of the pension types listed in the adjustment benefit guidelines. The adjustment benefit is laid down in the German Hard Coal Financing Act on state aid to the coal industry (Steinkohlefinanzierungsgesetz) of 2007 and has been granted since 1972. The current guidelines apply until 2027. At present, adjustment benefit is paid to 12,145 former miners. The volume of annual funding required is calculated on the basis of the difference between the individual mining company‘s manufacturing costs and the price of coal imported from third countries, or the difference between ex-mine revenues and the total verified expenses on closure as appropriate. BAFA checks and determines the amount of bad debts and closure expenses, and also verifies production costs, sales volume and ex-mine revenues. In addition, BAFA collects data on the price of coal imported from third countries (free at German border) on the basis of the purchased quantities and prices of imported coal reported by operators of power stations and steel works. Currently two mines are still being operated by the RAG coal company: Prosper-Haniel in Bottrop and the mine in Ibbenbüren. Both will be closed permanently towards the end of 2018. Figure 3: Hard coal subsidies 2007 – 2015 (€ million) 2.000 1.500 1.000 5.00 0 2007 Subsidy ceiling 2008 Payments 2009 2010 Savings 2011 2012 *not yet settled 2013 2014* 2015* 34 P R O M OT I O N O F E CO N O M I C D E V E LO P M E N T A N D S M E ‘ S Promotion of economic development and SMEs Boosting Germany’s growth: BAFA‘s promotion of economic development and SMEs focuses on making small and mediumsized businesses more competitive. P R O M OT I O N O F E CO N O M I C D E V E LO P M E N T A N D S M E ‘ S 35 Ulrich Sattler, Director-General, Promotion of economic development and SMEs Small and medium-sized businesses, including in particular the mid-size, mainly family-owned “Mittelstand”, dominate the German economy. Seven in ten jobs and eight in ten trainee positions in Germany are provided by the country’s almost four million small and medium-sized companies (SMEs). While generating only approximately 40 % of taxable goods and services, these SMEs form by far the largest group among the country’s economic players, accounting for 99.7 % of all companies. It is also notable that approximately half of the world’s innovative market leading companies, or 1,600 “Hidden Champion“ SMEs, are based in Germany. Germany is one of the world’s leading export nations and 98 % of its exporting companies are small or medium-sized companies. These companies thus form the backbone of our export-oriented economy. BAFA is an important central coordination point for most SMEs, since it offers multiple support programmes to help these companies sharpen their competitive edge. Other programmes provide support for implementing essential structural changes in SMEs, or for helping institutional bodies that represent and promote the interests of SMEs. The various support programmes managed by BAFA on behalf of and in agreement with the Federal Ministry for Economic Affairs and Energy target specific areas for future-oriented investments. With the exception of the car scrappage scheme (Umweltprämie) in 2008, BAFA’s tasks are not generally determined by economic cycles. Instead, the support programmes focus on providing a sound business environment for the SME sector. BAFA’s activities in the German SME sector are many and varied. They are designed to preserve or enhance the important contribution played by SMEs in the overall economy. Germany’s ‘Mittelstand’ is also associated with flexibility and innovation and is viewed by many other countries as the bedrock of our economic success. 36 P R O M OT I O N O F E CO N O M I C D E V E LO P M E N T A N D S M E ’ S Participation in trade fairs abroad Participation in trade fairs abroad The Federal Ministry for Economic Affairs and Energy works closely with the Association of the German Trade Fair Industry (AUMA) and BAFA to improve market and export opportunities for German companies by arranging for the Federal Government to participate in trade fairs and exhibitions abroad at joint trade stands. The German companies all present their products and services under the joint trade stand slogan “Made in Germany”. These shared trade stands mainly feature companies from the SME sector. BAFA mainly assists the Federal Ministry for Economic Affairs and Energy in this area with order placement, technical management of projects, management of budgetary funds and bookkeeping records. In 2015, BAFA organised and arranged the Federal Government‘s participation at 240 trade fairs in 44 countries, with a budget of 42.5 million euros. Overall, 6,521 German exhibiting companies thus received support with their economic activities in new growth markets. Photo: German joint trade stand at the Automechanika trade fair in Shanghai P R O M OT I O N O F E CO N O M I C D E V E LO P M E N T A N D S M E ’ S Expo 2015 BAFA supports the Federal Ministry for Economic Affairs and Energy with tendering procedures and the planning and setup of the German pavilion at the world exhibitions or “expos”. It is also responsible for the financial management involved. The Expo 2015 was hosted in Milan from 1 May to 31 October, with the theme “Feeding the planet. Energy for life”. Attracting a total of 3 million visitors, the German Expo Pavilion was one of the most popular that year. It won a number of awards, including the B.I.E. Gold Award once again for best presentation of the Expo theme. B.I.E (Bureau International des Expositions) is the intergovernmental organisation in charge of overseeing and regulating World Expos. Among other senior political leaders, Federal Chancellor Angela Merkel and the Italian Prime Minister visited the German Pavilion on 17 August. In 2015, planning also commenced for Germany’s participation at the next world exhibition in 2017 in Astana, Kazakhstan. The executive organisation selected for the Pavilion was the Messe Hamburg, while the company Laumann/Schessl/ Weismüller was commissioned with building and media project management. Photo: Federal Chancellor Dr. Angela Merkel and the Italian Prime Minister Matteo Renzi (centre) with their spouses Prof. Dr. Joachim Sauer and Agnese Landini in front of the German Pavilion. 37 38 P R O M OT I O N O F E CO N O M I C D E V E LO P M E N T A N D S M E ’ S Renewable energy export initiative Energy efficiency export initiative With its “Renewable Energy” export initiative, the Federal Ministry for Economic Affairs and Energy is providing targeted support to the development of foreign markets in this sector. The Federal Ministry for Economic Affairs and Energy works together with BAFA to support German companies’ export activities in two ways: first, through organising various trade promotion events such as trade missions to foreign countries and second, by arranging participation in sector-specific trade fairs and exhibitions at home and abroad. With its “Energy Efficiency” export initiative, the Federal Ministry for Economic Affairs and Energy is providing targeted support to the development of foreign markets in this sector. Working together with BAFA, it organises special projects and the same event modules as for the “Renewable Energy” export initiative to promote the export activities of German companies. As part of the Renewable Energy special trade fair programme, BAFA assists the Federal Ministry for Economic Affairs and Energy in particular with order placement, technical management of projects, management of budgetary funds and bookkeeping records. In 2015, BAFA disbursed some 2.1 million euros for participation at eight trade fairs. Another important component of the export initiatives is the organisation of various trade promotion events for businesses. These include, for example, trade missions abroad, information events for businesses in Germany and various other special events. The German Chambers of Industry and Commerce Abroad located worldwide are responsible for organising business trips abroad for companies. German SMEs are given the opportunity to take part in a presentation event in which they can showcase their products to foreign business partners in the relevant target country and subsequently attend business contact initiation meetings with selected partners. To this end, BAFA issues grant approvals to the German Association of Chambers of Industry and Commerce (DIHK), manages the tendering procedure for additional services to be awarded to the German companies, provides project supervision, manages budgetary funds and also audits the project bookkeeping records. In 2015, 36 business trips were made as part of the “Renewable Energy” export initiative. In addition, several service providers commissioned by BAFA organised information events and fact-finding trips from Germany to various target countries. The information event module is a one-day information event held in Germany, which mainly caters for SMEs interested in exporting their products and services for the first time. The fact-finding trip module covers a trip to Germany, held over several days, for decision-makers from businesses, industry and politics. In this case, German companies benefit from the opportunity to present their service offerings at no cost to themselves. In total, 24 information events and 10 fact-finding trips were completed for the export initiative in 2015. Events were organised for 59 target countries, all told. Some 5.1 million euros were disbursed by BAFA for the business trips and events mentioned. BAFA spent over 700,000 million euros in 2015 for participation at three trade fairs under the Renewable Energy special trade fair programme. In total, 40 business trips, 13 information events and 20 fact-finding trips were completed in 2015. Four special projects were also carried out: two industrial fairs in China and the U.S. and two projects providing training to energy managers in India and South Africa, based on European standards. Overall, events were organised for 46 target countries. Some 5.2 million euros were disbursed by BAFA for these events. P R O M OT I O N O F E CO N O M I C D E V E LO P M E N T A N D S M E ’ S 39 SME Market Development Programme The SME Market Development Programme run by the Federal Ministry for Economic Affairs and Energy funds market development initiatives to assist small and medium-sized companies, the self-employed in trade and industry, the liberal professions in specific disciplines and business services with their foreign trade efforts and thus tap into new markets. BAFA implements the programme on behalf of the Federal Ministry for Economic Affairs and Energy. With effect from 1 January 2015 and following the integration of the coordination office for the Market Development Programme, the Federal Ministry for Economic Affairs and Energy has now also charged BAFA with executing the content of the programme, as well as the associated administrative, contractual and budgetary tasks. The coordination office is responsible for compiling and implementing the Ministry’s annual Market Development Programme, and also for quality assurance. Its tasks include providing professional support to the assigned project management agencies, helping them with the design, compilation and organisation of individual measures. The office promotes the support programme itself while also assisting the project management agencies to market the individual measures assigned to them. The Market Development Programme is not restricted to particular sectors. Depending on the individual sector requirements, interested companies can also avail in this case of the individual or combined trade promotion events already offered under the “Renewable Energy” export initiative, which are aimed at developing foreign market outlets across a whole range of target countries. The Market Development Programme also includes a market prospecting trip to a target country. This market prospecting trip is intended to help companies explore business opportunities in challenging or new markets or market segments. The relevant modules are organised by professional, experienced service providers according to a consistent format. Aside from its role as coordination agency, it is also BAFA’s responsibility to manage the programme by organising tenders recruiting these service providers at European level, by concluding and managing the relevant contracts, and by handling remuneration. The market development measures of the export initiatives “Healthcare” and “Civil Security Technologies and Services“ are also organised and implemented under the Market Development Programme and the associated services provided by BAFA. As of 2016, the relevant measures for the new Environmental Technologies export initiative as well as market development projects from the aerospace industry will be carried out as part of the Market Development Programme. In 2015, BAFA commissioned a total of 79 events for 63 target countries. Of these, 48 events took place in the relevant target country, or specifically, 32 business contact initiation trips, 15 market prospecting trips and 1 services presentation. In total, 22 events were held in Germany: 16 information events, 5 fact-finding trips and 1 sourcing visit. One event was cancelled, while the remaining events will take place in 2016. The Market Development Programme and the “Healthcare” and “Civil Security Technologies and Services“ export initiatives accounted for a total spend of nearly 4 million euros in 2015. 40 P R O M OT I O N O F E CO N O M I C D E V E LO P M E N T A N D S M E ’ S Trade fair programme “Young innovative companies” Feedback from a trade fair exhibitor: Young innovative companies can avail of support for participation at joint trade stands at leading international trade fairs in Germany. The joint trade stands are organised by the trade fair organisers under the slogan “Innovation made in Germany”. The chief aim of the programme is to support the export of new products and processes. Boasting a large number of foreign exhibitors and visitors, the leading German export-oriented trade fairs offer an excellent platform for international market penetration and thus for the growth of young, innovative companies in Germany. In 2015, BAFA used a budget of 3 million euros to help 585 young innovative companies take part in 47 trade fairs. An official evaluation of the programme completed in 2015 commended its progress: BAFA scored highly for efficient administration from the supported companies. “We would not have been able to take part in the INTERSCHUTZ trade fair without your financial support. It turned out to be a tremendous success for us - so much so that I doubt we would have got much further in business, or indeed even managed to survive, if we had not taken part. We would like to thank you for your excellent coordination and support. […] Our experience with your organisation was entirely positive! We hope that other young entrepreneurs will be able to able to avail of the same opportunity for a long while yet.” P R O M OT I O N O F E CO N O M I C D E V E LO P M E N T A N D S M E ’ S 41 Consultation and funding measures INVEST – Venture capital grant The objective of the new “INVEST - Venture Capital Grant” assistance measure, launched on 15 May 2013 on behalf of the Federal Ministry for Economic Affairs and Energy, is to provide greater and more sustainable access to capital for young, innovative companies. In addition, it aims to recruit more business-minded people to take risks and invest in young, innovative companies. Existing business angels are also encouraged to invest higher and more frequent amounts of venture capital in young, innovative companies. Usually, to achieve these objectives, the first step is for the young, innovative company to apply to BAFA to assess its eligibility for funding. Investors or business angels can then apply for a grant to the value of 20% of their investment, if they intend to acquire up to 25 % of the shares in the young, innovative company (GmbH - limited liability company or AG - stock corporation). Individual investments ranging from 10,000 to 250,000 euros are eligible for a grant. Grants are also provided for investments for new companies pending start-up. Each investor or business angel (whether natural persons or single-member limited companies) can obtain funding in relation to investments of up to a total of 250,000 euros per calendar year. Any young company classified as eligible for funding can receive subsidised risk capital of up to one million euros per calendar year. For the individual funding requirements applicable to companies and investors, see the details on the BAFA website under “Wirtschaftsförderung” and “INVEST – Zuschuss für Wagniskapital” (German only). The Federal Government has earmarked budgetary funds of 30 million euros for this assistance measure for 2016. From the support programme start date to 31 December 2015, BAFA had already received a total of 2,447 from companies and 2,339 applications from investors. Some 1,927 notifications of funding eligibility were issued to companies and 1,813 grant approvals to investors. By 31 December 2015, grants to investors amounting to 26.76 million euros were approved. 42 P R O M OT I O N O F E CO N O M I C D E V E LO P M E N T A N D S M E ’ S Taskforce on the new Federal States To promote equal living conditions throughout Germany, the Federal Ministry of Economic Affairs and Energy supports key projects of the Federal Government Commissioner for the new Federal States. Financial aid is allocated to national and regional development agencies in the new Federal States for projects geared towards attracting foreign investors to the new Federal States. The Study and Work initiative helps higher education institutions to form regional networks and thus integrate international students. It is designed to enhance the social and professional integration of international students, while also helping small and medium-sized companies find skilled talent to fill vacancies. Mecklenburg-Western Pomerania Funding is also provided for projects in the cultural arena. BAFA has held administrative responsibility for the projects since 2015. This includes vetting all applications thoroughly, issuing grant approvals, managing the current budgets and verifying that expenditure is in line with the agreed objectives. In 2015, total funding of approximately 900,000 Euro was disbursed. Brandenburg Saxony-Anhalt Saxony Thuringia P R O M OT I O N O F E CO N O M I C D E V E LO P M E N T A N D S M E ’ S 43 Business advisory (consulting) services and information and training events Mandated by the Federal Ministry for Economic Affairs and Energy, BAFA implements two specific funding programmes in support of business start-ups and business management in the SME sector. Funding is provided for business advisory (consulting) services and information and training events. Both programmes are co-financed by the European Social Fund (ESF). The advisory support scheme focuses on SMEs in industry and the liberal professions that have been active on the market for at least one year. These businesses may apply to BAFA for a grant towards their consultancy fees. Funding may also be granted to companies that have been in existence for many years or decades. In addition to advisory services dealing with the broad range of issues relating to running a business, subsidies are also granted for specific consultancy services in the field of technology/innovation, foreign trade, cooperation or employee shareholding schemes. Funding is also available for advice on the following topics: securing a supply of skilled labour; business transfers; the development of inhouse systems to prevent white collar crime; improved integration of employees with a migration background into business operations. In addition, funding is targeted in particular at women in business and at companies managed by people with a migration background. Environmental protection is another key focus. Advisory services on improving work/life balance and work safety are also eligible for funding. Companies are permitted to consult several advisory services if advice is required on different matters. The consultants must be qualified and must be able to provide evidence of the delivery and scope of their consulting services. Companies can use the Consultation and Training Portal for information on the support programmes. The portal offers detailed tips on funding requirements and how to enter into a consultancy contract at www.beratungsfoerderung.info. By funding information meetings and training courses, the Federal Ministry for Economic Affairs and Energy and the European Union provides seminars fostering entrepreneurial spirit to help new businesses get off the ground. Entrepreneurship seminars inform start-ups, business owners, skilled employees and managers about successful company management. The objective of the seminars is to improve the efficiency and competitiveness of SMEs and the liberal professions. A wide range of events on setting up in business and management is eligible for funding. In addition, workshops help both new entrepreneurs and experienced business owners draft and update their business plans. As the granting authority, BAFA decides on the applications for funding once they have been reviewed and rated by the coordinating offices of industry umbrella organisa- tions. BAFA also conducts onsite audits at the premises of companies in receipt of funding. In 2015, a total of approximately 21.5 million euros was disbursed for both support programmes. Approximately 18.08 million euros of this sum covered funding of business advisory services, while about 3.44 million euros was spent on information seminars and training courses. The two support programmes were co-financed with 12.24 million euros from the European Social Fund (ESF). In total, BAFA funded 13,722 consultations and 3,713 training measures involving 33,207 participants. Consultations and training focused in particular on the craft sector, the liberal professions, the retail trade and other services. The two support programmes concluded at the end 2015. A new programme is available to provide support for business advisory services in 2016. Under the heading “Promoting entrepreneurial expertise“, the existing programme for funding business advisory services is being amalgamated in a single measure with the KfW development bank programmes “Start-up coaching in Germany“, “Turn-around advisory services“ and “Round tables”. Entrepreneurship seminars inform start-ups, business owners, skilled employees and managers about successful company management. The objective of the seminars is to improve the efficiency and competitiveness of SMEs and the liberal professions. A wide range of events on setting up in business and management is eligible for funding. In addition, workshops help both new entrepreneurs and experienced business owners draft and update their business plans. As the granting authority, BAFA decides on the applications for funding once they have been reviewed and rated by the coordinating offices of industry umbrella organisations. BAFA also conducts onsite audits at the premises of companies in receipt of funding. In 2015, a total of approximately 21.5 million euros was disbursed for both support programmes. Approximately 18.08 million euros of this sum covered funding of business advisory services, while about 3.44 million euros was spent on information seminars and training courses. The two support programmes were co-financed with 12.24 million euros from the European Social Fund (ESF). In total, BAFA funded 13,722 consultations and 3,713 training measures involving 33,207 participants. Consultations and training focused in particular on the craft sector, the liberal professions, the retail trade and other services. The two support programmes concluded at the end 2015. A new programme is available to provide support for business advisory services in 2016. Under the heading “Promoting entrepreneurial expertise“, the existing programme for funding business advisory services is being amalgamated in a single measure with the KfW development bank programmes “Start-up coaching in Germany“, “Turn-around advisory services“ and “Round tables” . 44 P R O M OT I O N O F E CO N O M I C D E V E LO P M E N T A N D S M E ’ S Skilled labour Securing the supply of skilled labour Vocational training without borders As a result of current demographic trends, small and medium-sized companies are finding it particularly difficult to source skilled labour. To meet their future needs, all options for securing and maintaining the supply of skilled labour must be deployed. In 2015, the Federal Ministry for Economic Affairs and Energy expanded existing programmes for this purpose and also initiated a number of new measures, which are being implemented by BAFA. Under the “Guidelines on vocational consultations to increase cross-border mobility of trainees and skilled young people”, which came into effect on 1 January 2016, businesses and trainees should already be encouraged during training to have an open-minded attitude towards professional mobility. With this goal in mind, mobility coaches are available to provide valuable advice on completing a stay abroad. In delivering on the commitment set out in the coalition agreement, this is an important step towards increasing the rate of mobility among trainees. A total of 1.76 million euros is available for this funding measure in 2016. P R O M OT I O N O F E CO N O M I C D E V E LO P M E N T A N D S M E ’ S 45 Tailored placement - the right person for the right trainee position The programme “Support for SMEs in arranging tailored placement for trainee positions and integrating foreign skilled workers” (or “Tailored placement” for short) is designed to provide active support to small and medium-sized businesses in ensuring a long-term supply of skilled labour for their future business needs. It forms part of the programme agreed under the National Training Pact for securing skilled labour for SMEs and is co-financed by the European Social Fund (ESF). Funding is provided for advisory and placement services to SMEs that are provided by qualified consultants from the Chambers of Commerce and other economic organisations with the objective of matching young people to trainee positions. The programme focuses on helping small or medium-sized businesses to fill their vacant trainee positions. Working together with each company, the consultants conduct a detailed analysis of business needs and use this as a basis to compile specific skills profiles. They help companies with their recruitment drive for potential trainees, with interviews and placement tests, and also with preparing a shortlist of suitable candidates. The trainee positions are subsequently filled by young high-achievers and less qualified young people alike, including young people without a school leaving certificate or with more limited opportunities for personal reasons. This highly customised approach enables the best possible match to be found between the companies providing apprenticeship training and the skills of the trainee applicants. Two funding modules were added to the programme in 2015: The consultants will now also assist SMEs with the integration of young, foreign trainees (especially from other European countries), foreign skilled workers and migrants who are already living in Germany. The programme is executed in cooperation with others, including the MobiPro-EU programme of the Federal Ministry of Labour and Social Affairs. Due to the large increase in numbers of people fleeing to Germany since summer 2015 as a result of war, expulsion and poverty, a special refugee component has been added to the “Tailored Placement” programme. The Federal Ministry for Economic Affairs and Energy is providing 6 million euros annually from 2016 to 2018 to employ 150 “welcome guides” (Willkommenslotsen). The main role of these welcome guides is to create a welcoming environment and open doors for refugees: They are to encourage small and medium-sized companies to also consider refugees when filling vacancies or internships. The welcome guides will strive to promote a greater willingness among employers to train or employees. They will also advise on how to successfully integrate refugees into the business and help companies with appropriate measures. The future welcome guides can build on and take advantage of the existing structures, experiences and business contacts used by the “tailored placement” consultants. In 2015 roughly 6.25 million euros in total were allocated to advisory and placement services, almost 3.65 million euros of which was from the European Social Fund (ESF). This funding was used to pay for 178 full-time consultants in the chambers of commerce and other business organisations, who, in turn, identified 18,044 vacant apprenticeship training positions, provided 33,835 consultations to companies and 28,588 consultations to people seeking a trainee position. Following the deployment of these consultants, some 4,873 young people were placed either in a trainee position or work experience programmes. One third of the consultations (28.45 %) covered the topic either of creating a culture of welcome or how to better integrate foreign trainees, skilled workers and young people with a migrant background who are already living in Germany. The Federal Office approves funding for consultants in chambers of commerce and business organisations on an annual basis. It is supported in this task by the German Confederation of Skilled Crafts (ZDH), which acts as a coordination centre. 46 P R O M OT I O N O F E CO N O M I C D E V E LO P M E N T A N D S M E ’ S Intercompany vocational training centres The Federal Government is funding the modernisation and restructuring of inter-company vocational training centres (ÜBS) that offer training and further training programmes, and also developing them to become technology-oriented centres of excellence. With this support, it aims to boost the efficiency and innovative capability of SMEs so they can better access all markets. Inter-company vocational training centres are in existence throughout Germany and play an important role in meeting the demand for skilled personnel in Germany. Assistance is available for investments in the fields of construction, equipment, supplementary procurement and technical fittings. As part of the strategy to further develop inter-company vocational training centres into centres of excellence, personnel expenses and material costs relating to the transfer of management and administration expertise are also eligible for funding. The Land in which each inter-company vocational training centre is situated must approve the measure and contribute financially towards the overall project expenses. The applicant is also required to make a financial contribution. BAFA supports inter-company vocational training centres that offer advanced vocational training programmes and qualification courses aimed at improving technology, research and innovation management for SMEs in trade and industry. Its tasks include coordination with the sponsors, experts and industry organisations involved. BAFA grants subsidies in accordance with the project support programme and is responsible for approvals, project monitoring and expenditure reports on use of funds. By the end of 2015, BAFA had received 79 project proposals and applications for funding of 69 inter-company vocational training centres and 10 centres of excellence, with an investment volume of approximately 237 million euros. In 2015, approximately 28.9 million euros were disbursed for 37 projects carried out in the current year and also for multi-annual projects from previous years. Funding of 27.4 million euros was allocated to 29 projects in inter-company vocational training centres, while 1.5 million euros were provided for 8 centres of excellence. P R O M OT I O N O F E CO N O M I C D E V E LO P M E N T A N D S M E ’ S 47 Other measures for securing a supply of skilled labour In 2015, the centre of excellence for ensuring a supply of skilled labour continued to receive funding for its activities. This centre aims to offer specific information and practical support and solutions to SMEs in particular on the topic of securing skilled labour. The project was jointly initiated in 2011 by the Cologne Institute of Economic Research (IW) and the Rationalisation and Innovation Centre of German Industry (RKW). Since 2014, IW has implemented the project alone. An Internet information portal called “Make it in Germany” was already added to the project in 2012. This portal provides clear, simple access to the type of information about working in Germany that is necessary to attract skilled workers from abroad. The information is available in several languages. Another research project conducted by the Centre of Excellence on securing skilled labour is studying the subject of “Securing skilled labour in an increasingly digitised economy”. The study is being carried out by the Cologne Institute of Economic Research together with the German Association for People Management (DGFP). The findings are expected to highlight the effects of digitisation in the economy on skills profiles, vocational training and human resources development. Since 2015, funding has been provided for the project “HR strategies for integrating refugees in businesses”. The Centre of Excellence on securing skilled labour is aiming to raise awareness of this topic among SMEs. Information packs are being distributed and welcome guides are organising events and training courses. A link has also been established with the practical experiences of the “Tailored Placement” consultants. Meanwhile, the study funded since 2015 by the Cologne Institute for Economic Research (IW Köln) “Chancen und Herausforderungen einer intensivierten Inklusion in der dualen Berufsausbildung aus Unternehmenssicht” (Opportunities and challenges relating to greater inclusion in Germany’s dual vocational training system: the business perspective), is exploring ways of increasing the options available to people with disabilities in a manner that meets their needs and is based on the latest scientific principles. Based on the study findings, measures will be drafted to implement successful training and remove obstacles in this area. Funding is also being provided to the SchuleWirtschaft network. This network fosters links between schools and industry in order to improve career guidance for students. In 2015, BAFA could draw on approximately 2.33 million euros for this purpose. With regard to these support measures, it is BAFA‘s responsibility to vet all applications thoroughly, issue grant approvals, manage the current budgets and verify that expenditure is in line with the agreed objectives. 48 P R O M OT I O N O F E CO N O M I C D E V E LO P M E N T A N D S M E ’ S Film and technology German Industrial Film Award The German Industrial Film Award has been granted by the Federal Ministry for Economic Affairs and Energy since 1968 and is therefore one of the oldest film awards in Germany. It has been a permanent feature of the Federal Government‘s “Culture and Creative Industries” initiative since 2008. The competition aims to create a greater awareness among the general population of business-related and economic issues. The prize is awarded to recognise exceptional films made by industry and about industry. BAFA is the main authority responsible for the competition and acts as the first point of contact for all participants. In 2015, the independent jury selected winners from 228 submissions in 4 categories: “Films about industry (short/ long”, “Films made by industry”, “Films in the new media” and “Films from the above categories that were conceived and produced by students or job starters”. Photo: German Industrial Film Award - Award ceremony 2015 The cash prizes on offer of 20,000 euros in total to promote young talent were awarded to the three top entries in the young filmmakers’ category “Langsames Internet trotz Highspeed-Kabel vor der Tür” (10,000 euros), “Flüchtlinge in Deutschland – Wer profitiert?” (6,000 euros) and “We would end the painting” (4,000 euro). Brigitte Zypries, State Secretary at the Federal Ministry for Economic Affairs and Energy, presented the awards during a gala celebration on 4 November 2015 at the Kino International film theatre in Berlin. P R O M OT I O N O F E CO N O M I C D E V E LO P M E N T A N D S M E ’ S 49 Wireless microphones Film funding To offset eligible changeover costs caused by disruption to frequency band access, the owners of wireless microphone systems can apply to BAFA for financial compensation in accordance with a directive of the Federal Ministry for Economic Affairs and Energy. Under the Federal Film Funding Act (FFG), BAFA issues certificates stating that a film is defined as a German film under the terms of the FFG. In the case of international film productions with German participation, BAFA reaches agreement with the relevant national authorities on the basis of multilateral or bilateral agreements. Since the frequencies 790 to 814 Mhz and 838 to 862 Mhz, which are currently occupied by users of wireless production technologies, are being auctioned to providers of mobile communications services as part of the Federal Government‘s broadband strategy, uninterrupted usage of these frequencies can no longer be guaranteed. In future, these users will need to be aware that operation of their equipment could be disrupted by the installation of LTE (Long Term Evolution) applications by providers of mobile communications services. If this type of disruption occurs, and is being investigated for a fixed installation as part of the official application process, BAFA grants compensation to the owner of the wireless microphone system. The amount of compensation granted depends on the notional remaining book value of the microphone system at the time the disruption occurred and/or the specific costs of switching to interference-free, operational channels or frequencies. Applications for compensation may be filed by individuals, companies, associations or cultural institutions such as theatres or music groups. Churches and local authorities or their subdivisions may also apply. By 31 December 2015, 702 approval decisions had been issued and compensation payments amounting to 1,281,550.56 euros had been paid to those concerned. The German Federal Film Board (FFA) grants subsidies based on the certificates issued by BAFA. BAFA also issues certificates of origin for the distribution of German films abroad. In 2015, 531 applications for certificates, preliminary project certificates and certificates of origin were filed. Of these, 301 were for German films, 227 for international co-productions with German involvement, and nine for other productions (e.g. commissioned productions). 50 P R O M OT I O N O F E CO N O M I C D E V E LO P M E N T A N D S M E ’ S Trade and industry National accreditation body for the Federal Republic of Germany (DAkkS) BAFA is also responsible for providing financial assistance to the National Accreditation Body for the Federal Republic of Germany (DAkkS) to fund the activities it carries out on behalf on the government within national and international committees. In Germany, approximately 4,000 certification bodies and laboratories (e.g. TÜV) conduct a diverse range of tests on products and services. They provide evidence of their technical and professional capacities through an accreditation procedure. These accreditation procedures are frequently regulated and are required by law. DAkkS is the national accreditation body under Regulation (EC) no. 765/2008 and carries out accreditations as part of its statutory duties on behalf of the government. The foundation, expansion and statutory activities of DAkkS have been financed by government grants since 2009. Accreditation is an essential part of Germany‘s quality infrastructure. It contributes to the safety and quality standards of German products, which have an excellent reputation internationally. In 2015, the government allocated funds of 1.35 million euros to ensure that DAkkS could complete its tasks properly on behalf of the government within the framework of European and international cooperation. Individual assistance measures As part of its efforts to promote tourism, BAFA provides grants for the project “Introducing the ‘Accessible Tourism’ (‘Reisen für Alle’) labelling system in Germany”. The United Nations Convention on the rights of persons with disabilities calls for measures ensuring that persons with disabilities enjoy equal access to tourism. The project aims to introduce a uniform system of labelling as well as adapting and further developing an overall strategy to provide accessible tourism services for all. It also offers training courses and the certification of tourism companies. Assistance is provided to evaluate the system, the licensing process and pricing structure. A total budget of 527,000 euros was provided for this project in the tourism sector in 2015. With respect to this funding measure, BAFA checks whether the eligibility conditions for funding are fulfilled, issues approvals, monitors budget management and checks that funds are used according to the intended purpose of the allocation and budgetary legislation. P R O M OT I O N O F E CO N O M I C D E V E LO P M E N T A N D S M E ’ S Promotion of craft trades BAFA also implements various individual measures in the craft sector to boost the efficiency and competitiveness of small and medium-sized businesses and establishments. For the craft sector in particular, funding was provided for the special exhibitions “Exempla” and “Innovation Gewinnt!” and the Federal prize for outstanding innovative achievements in the trade sector at the 67th International Craft Trade Fair (IHM) in Munich. A national competition for German crafts in Frankfurt also received support. BAFA granted funding for these measures amounting to 371,200 euros in 2015. The projects mentioned will continue in 2016. With respect to these funding measures, BAFA checks whether the eligibility conditions for grants are fulfilled, issues approvals, monitors budget management and checks that funds are used according to the intended purpose of the allocation and budgetary legislation. 51 52 P R O M OT I O N O F E CO N O M I C D E V E LO P M E N T A N D S M E ’ S Manufacturers‘ discounts in the pharmaceutical industry On behalf of the Federal Ministry of Health, BAFA has assumed the task of verifying manufacturers‘ discounts according to Section 130a Paragraph 4 and Paragraph 9 of the Social Code V. The purpose of the manufacturers’ discounts is to reduce costs for statutory health insurance funds. In the past, these health insurance funds faced increasing costs mainly because of growing volumes of drugs that were not subject to fixed prices. As a result of this measure, the solidarity community of insured persons saves 1.15 billion euros annually. Between 1 August 2010 and 31 December 2013, pharmaceutical companies were obliged to give increased discounts of 16% to the health insurance funds for prescription-only drugs that are not subject to fixed prices. At the same time, a price freeze was introduced as at 1 August 2009. If a company has increased its sales price after 1 August 2009, this increase is to be refunded as a discount to the health insurance fund. From 1 January 2014 to 31 March 2014, a manufacturers’ discount of 6 % was applicable. The discount was increased to 7% for the period from 1 April 2014 to 31 December 2017, while the prize freeze was maintained. A pharmaceutical company that is in possession of a licence for the introduction to market of a medicinal product can, according to Section 130a Paragraph 4 and Paragraph 9 of the Social Code V, in connection with Article 4 of Directive 89/105/ EEC, apply for exemption from the statutory discounts (manufacturers‘ discounts). When processing an application under Section 130a Paragraph 4 of the Social Code V, BAFA assesses whether or not the increased manufacturers‘ discount represents a threat to the financial viability of the company. This may be the case, in particular, if insolvency cannot be avoided through use of the company‘s own funds, shareholder contributions or other means. The previous year‘s audited accounts are an important factor in the decision to issue a positive or negative notice. According to Section 130a Paragraph 9 of the Social Code V, a pharmaceutical company can apply to have an exemption for certain medicinal products that are authorised for treating a rare disease. An investigation is then carried out as to whether operating costs incurred in the past (for research and development of the drug in particular) could not be refinanced as a result of the mandatory statutory discount. For an overview of all approved exemptions to date, see our website. By a resolution on 24 July 2013, the European Commission opened an investigation to examine the issue of whether exemptions from the manufacturers‘ discount constitute unauthorised state aid. In its decision of 27 March 2015, the European Commission determined that while Germany’s exemption of pharmaceutical companies from manufacturers’ discounts according to Section 130a Paragraph (4) Social Code V does constitute state aid, the measure is compatible with Article 107 Paragraph (3c) TFEU and the Single Market. All pending applications for exemptions to BAFA at the time were suspended when the Commission opened the investigation into state aid rules. Processing of these applications was resumed after the European Commission decision of 27 March 2015. New applications can now also be submitted for processing. P R O M OT I O N O F E CO N O M I C D E V E LO P M E N T A N D S M E ’ S 53 Innovative shipbuilding Institutional assistance This support programme is an important instrument for improving the competitiveness of the German maritime industry. German shipyards can apply to BAFA for grants covering up to 50% of their investment, design, engineering and testing costs. This expenditure must result directly from the industrial application of innovative products and processes in shipbuilding that are newer than the best available products and process. The products and processes for consideration must be vulnerable to technical or industrial failure. BAFA provides assistance to selected institutions that are tasked with analysing the interests of SMEs or that act as transformers and multiplier agents, facilitating the exchange of information between science and industry about current political and economic developments. The guidelines introduced on 3 July 2015 extended aid to include innovative inland waterway vessels, the development and application of new procedures and also moving offshore structures. Innovation funding is granted in the form of non-repayable grants. The current directive expired on 31 December 2015. It is planned to continue the support programme in 2016 on the basis of new guidelines. In 2015, BAFA received 37 funding applications. The number of applications received since the support programme began now amounts to 397. BAFA disbursed a total of approximately 8.8 million euros to German shipyards in 2015. These institutions include the following: •• the German National Tourist Board (DZT) in Frankfurt/ Main, which promotes Germany as a holiday destination at home and abroad on behalf of the Federal Government •• the Rationalisation and Innovation Centre of German Industry (RKW Centre of Excellence) in Eschborn, which promotes productivity, innovation and competition among SMEs through practical preparation and the transfer of relevant scientific findings in the fields of rationalisation and innovation management •• the Working Group for Economic Administration (AWV) in Eschborn, which is dedicated to the economic structuring of administrative processes. •• the Institute for SME Research (IfM) in Bonn, which analyses the situation, development and problems of SMEs •• the German Trade and Crafts Institute (DHI) in Berlin, an umbrella organisation comprising five research institutes that deal with applied craft research and trade promotion Approximately 41 million euros of funding were disbursed to these institutions in 2015. 54 FOREIGN TRADE FOREIGN TRADE Foreign trade is closely linked to growth, prosperity and employment in Germany. Nearly one in four jobs in Germany relies either directly or indirectly on exports. FOREIGN TRADE 55 56 FOREIGN TRADE Export control Export control - helping to make the world a safer place FOREIGN TRADE Georg Pietsch, Heinz-Jürgen Hartmann, Director-General for Export Control (Procedures) Director-General for Export Control (Technology) Once again in 2015/16 there was no shortage of trouble spots around the world. As Federal Minister Gabriel has pointed out, licencing of the supply of weapons and other sensitive items has always been a hot topic in public debate and one that is evaluated in terms of many moral, economic, security and strategic perspectives. As an authority under the supervision of the Federal Ministry for Economic Affairs and Energy, BAFA has a growing role to play in exercising a transparent and responsible policy governing the export of arms. In addition to awarding of licences, BAFA contributes to numerous Federal Government reports. It also provides comprehensive assistance in response to parliamentary questions about export controls on arms. In 2016, BAFA will continue to deal with issues such as post-shipment controls and compliance tests for companies. Compared to its counterparts in the rest of the EU, Germany industry is disproportionately affected by the export control regime stipulated in the European Dual Use Regulation 428/2009. BAFA will champion these interests and the Federal Government‘s political verification requirements in the EU reform process over the long term and also lend constructive support to the regulatory drafts expected in 2016. The Vienna agreements concluded between the E3+3 and Iran in 2015 have led to comprehensive changes in sanctions. Aside from relaxed provisions, bans that were essentially under BAFA‘s remit have been transformed into licensing requirements and are covered, among other things, by complex international coordination procedures for a period of up to eight years. In the normal working day, successful implementation of the nuclear agreement requires a variety of new control mechanisms. Implementing these mechanisms promptly will be a priority in 2016 and beyond. One particular challenge posed in this context is the main feasibility study to be conducted for all worldwide applications for nuclear products within the framework of the Procurement Working Group. In 2016, BAFA will continue to actively support the international agreements that are regularly concluded in export control regimes at EU level or at national level. It will provide a clear picture of the framework conditions to the business community through continuous communication. 57 The specialised work carried out in the export control regimes is also about striking the right balance between security requirements and economic interests. Besides taking an active part in the technical negotiations, BAFA is also setting new quality priorities by assuming responsibility for leading the Task Force on Control Lists as part of the assessment for the Wassenaar Arrangement (WA). The EU working group tasked with issues relating to the control of equipment for monitoring telecommunications is continuing its work. This working group was set up in response to a German initiative. In the Nuclear Suppliers Group (NSG), the INFCIRC documents will be updated in line with technological developments in 2016. Another focus of the NSG‘s work will comprise outreach activities with India. This issue will be the subject of meetings and seminars in the coming months. Meanwhile, the Australia Group (AG) will focus on synthetic biology in 2016. Within this field, CRISPR/Cas9 technology facilitates the editing of genetic material easily and cost-effectively. In 2015, the Missile Technology Control Regime (MTCR) dealt with the issue of gel propulsion systems; this led to the reformulation of controls on rocket motors with gel propellants. Additional components for gel propulsion systems, software and equipment for optional manned/unmanned aircraft are on the agenda for 2016. BAFA is charged with implementing the licensing process under nuclear law in accordance with Section 3 of the Atomic Energy Act and Section 19 of the Radiation Protection Ordinance. The licensing and reporting procedure for the transfer of nuclear fuel has been migrated to an electronic application process. With regard to the Chemical Weapons Convention (CWC): in addition to supporting industry inspections, the change in the CWC Implementation act and the international consultations on industry issues conducted under the German chairmanship were at the forefront of BAFA‘s activities. 58 FOREIGN TRADE Introduction to export control In 2015 BAFA carried out assessments on planned exports to the value of 25.8 billion euros. With globalisation, exponential advances in IT technology development and the ongoing foreign policy crises in 2015, all stakeholders in export control must be able to adapt quickly to changes in the foreign policy situation and respond appropriately. While becoming increasingly reliant on up-to-date information sources, applicants also find themselves obliged to commit to faster deliveries, particularly in relation to recipients not considered to be in the “sensitive” category. Applicants tackling these challenges are able to avail of BAFA’s expanded information service and continually improved processes. Through continued optimisation of its processes in 2015, BAFA was able to focus more attention on sensitive cases. General Licences (“Allgemeine Genehmigungen” or General Export Authorisations) and collective export licences (“Sammelgenehmigungen”) play a pivotal role in reducing the administrative burden. While the exports in this case are still subject to licensing and affected businesses must meet this requirement, the general licences and collective export licences remove the need for individual applications, i.e. it is not necessary to apply for a separate licence for each and every export project. With 21 general licences currently available to exporters, BAFA turned its attention in 2015 in particular to refining the collective export licence procedure and providing information on existing options. With this in mind, it focused on four information events on simplifying the export of spare parts, which were held in conjunction with the German Machinery and Plant Manufacturers Association (VDMA). BAFA also worked closely with industry representatives to further simplify procedures for exporting machine tools and spare parts. With these simplified procedures for exporting spare parts, BAFA is specifically responding to the increased expectation among foreign buyers of German products for faster and less complicated after-sale services to meet demand for spare parts. General licences and collective export licences should not be considered to be exclusions from the licensing requirement. Rather there is a degree of due diligence imposed on businesses both beforehand and subsequently with regard to the use of these licence types. Ensuring transparency in the procedures for processing applications and expanding the range of information offerings are increasingly important considerations in export control, in addition to continuous optimisation of the application process and the introduction of many procedural simplifica- tions for non-sensitive projects. Fast, unbureaucratic access to information is essential for economic operators wishing to conduct their planned exports as efficiently as possible. BAFA has responded to these needs and now offers four separate telephone hotlines handling queries as follows: licence applications (“Infostelle Antragsauskunft”); the electronic application portal (“Infostelle ELAN-K2”); sanctions against Russia; goods-related questions on the Iran embargo. In addition, BAFA updated the information leaflet “Export Control and BAFA” in 2015 to include not only an introduction to export control, but also a current overview of information sources and contact persons in BAFA. BAFA’s work over the past year was largely shaped by the further development of export controls on arms, as set forth in the updated version of the “Principles Adopted by the Government of the Federal Republic of Germany for the Issue of Licences for the Export of Small and Light Weapons, Related Ammunition and Corresponding Manufacturing Equipment to Third Countries”, and the preparation of new procedures following the relaxation of sanctions against Iran. Why export control? Export control is an indispensable instrument in preventing and responding to these security risks. BAFA plays its part here on behalf of the German government. Self-regulation by exporters through mutual agreement with BAFA also aims to prevent companies from unintentionally supplying WMD programmes. The existence of effective export controls is therefore also very much in the interest of the export industry. First, export controls make companies aware of unauthorised procurement measures by third parties. Second, they give companies the opportunity to ensure their own access to technologies and growing import and export markets in non-sensitive areas. The task sharing this requires between industry and the authorities relies both on efficient administration and effective internal compliance programmes. FOREIGN TRADE 59 What is BAFA‘s role in export control? A central administrative and licensing authority, BAFA implements the foreign political and security interests of the German Federal Government in accordance with government political objectives in the area of foreign trade legislation. BAFA‘s primary task is to ascertain whether the export of goods, services or transit transactions are subject to licensing and whether an export control licence may be granted. BAFA is also involved in drafting European and national laws under the auspices of the Federal Ministry for Economic Affairs and Energy and the Federal Foreign Office. BAFA takes part in the technical, legal and administrative working groups in Brussels and works within international export control regimes to facilitate the harmonisation of licensing standards and creation of transparent procedures. Its daily work involves close coordination with customs authorities and all other parties involved in monitoring of foreign trade transactions, as well as lending its technical expertise to the authorities in charge of sanctioning infringements. BAFA has referred over 600 cases to the monitoring and investigating authorities, for example, the German Customs Investigation Bureau and the Federal Public Prosecutor General. In addition, BAFA supports the German Central Bank in its task of monitoring payment transactions in accordance with the relevant embargo regulations, and brings to this role its special expertise in the technical and legal aspects of export control legislation. BAFA is keenly aware of the conflict of interests that exists between exporting companies wishing minimal intervention in economic and trade relations on the one hand, and national and international security needs on the other. Guided by the export control policy objectives of the EC Dual-Use Regulation and national law on foreign trade and payments, BAFA seeks to make provisions and procedures more transparent, predictable and more amenable to planning, while also tailoring them to companies‘ business requirements. Key elements of BAFA’s core mission are to act on the legitimate interests of the export industry and represent the industry at national and international levels. For this purpose, BAFA frequently consults with companies and industrial associations. To reinforce collaboration in this area, BAFA, together with the Federation of German Industries (BDI) and interested companies, has established working groups on technologies and procedures as open forums in which to discuss current developments in export control. In addition, BAFA supports exporting companies in the area of export control through information events, publications and practical support materials. Ongoing dialogue with industry during the implementation of export controls has proved to be helpful in this regard and will continue. Industry will be required to uphold its high level of responsibility and contribute itself to the continued development of export control. Since 2005, BAFA has also been working on projects with third countries as a contract partner of the European Commission and, in this capacity, has been instrumental in setting up effective export control regimes. 60 FOREIGN TRADE What are the effects of export control on the export industry? Companies‘ direct responsibility for self-regulation and planning certainty through transparency On average and in accordance with the principle of unrestricted foreign trade, only a relatively low percentage of exports from Germany was subject to export control. Nevertheless the restrictions had a heavy impact on the business transactions of some specialised companies. The German export control regime relies on individual companies taking direct responsibility for self-regulation. Companies assume responsibility for their own decisions when concluding contracts, exporting goods, software and technology, providing technical services abroad and exchanging expertise. Last year, approximately 7,000 companies, mostly from the SME sector, submitted over 54,000 licence applications and queries to BAFA. The value of planned exports authorised under BAFA‘s export control amounted to approximately 25.7 billion euros in 2015. Rejected applications accounted for a total value of approximately 100 million euros. Almost all communications between industry and BAFA were carried out via the ELAN-K2 portal and thus fully automated. When making these decisions, companies must take account of the existing restrictions and licensing requirements for foreign trade. A member of the Executive Board takes responsibility for the company‘s compliance with regulations. Companies are faced with a challenging set of requirements, more today than ever before. Rapid access to current information sources gives the export industry an „information head start“ and allows companies to judge quickly which legal transactions and planned exports could be subject to restrictions. BAFA once again offered many support instruments in this area and expanded the range of available information services in 2015. In accordance with BAFA‘s strategic focus on supporting the SME sector, these instruments were aimed in particular at small and medium-sized companies, as well as targeting Chambers of Trade and Commerce and industry associations. By holding information events, taking part in working groups, and producing many informative publications, BAFA helps companies get to grips with the relevant provisions and gives newcomers a clear insight into this complex policy area. In this way, BAFA has continued to provide a „single window“ for all players in the export economy over the last year. FOREIGN TRADE 61 News service, sources of information and information leaflets Providing companies with an information head start is not simply a question of offering rapid, transparent access to the information available. It also means ensuring that the information is up-to-date. With this in mind, BAFA offers direct access to several publications under the heading of „Export Control News“, which provide information on the latest legal and procedural amendments in order to advise companies immediately of any changes implemented. In addition to this news service, it publishes a monthly newsletter and several information leaflets on individual topics of interest. BAFA’s publishing efforts in the area of information leaflets in 2015 focused on current developments at European level. Developments concerning sanctions against Iran featured in particular, starting with the Vienna Nuclear Agreement successfully concluded on 14 July 2015 and entering their most significant phase on Implementation Day on 16 January 2016. Once the International Atomic Energy Agency (IAEA) confirmed that Iran had implemented the first key steps to shrink its nuclear programme, the easing of sanctions agreed under the Vienna Nuclear Agreement entered into force. BAFA has responded to a greater need for information among businesses by publishing an information leaflet on the developments surrounding sanctions against Iran: the sanctions still refer to a graduated system of activities and legal transactions that are prohibited and subject to licensing. General export control legislation must also be observed. The leaflet provides details of the lifted sanctions and all of the export control regulations that continue to apply. BAFA has also updated the information leaflets on sanctions against Russia and the procedure for collective export licences and re-issued the “Export Control and BAFA” leaflet. This leaflet offers newcomers to the field of export control an overview of the basic principles of export control, information sources and contacts in BAFA. 20 years of HADDEX, still going strong 2013 marked the twentieth anniversary of the Handbook of German Export Control (HADDEX), published by BAFA in association with the publishing body Bundesanzeiger Verlagsgesellschaft mbH. The handbook‘s readers have benefitted since 1993 from the wide-ranging expertise of its authors, whose contributions are both practical and comprehensive, and draw on their many years of experience handling legal and regulatory texts and in the licensing field. HADDEX was again adapted in 2015 to reflect legislative changes. These modifications ensure that HADDEX remains a useful, up-to-date tool for the mainly small and medium-sized exporting companies that need to implement export controls internally. Merkblatt zu den Entwicklungen des Iran Embargos – Implementation Day – Picture: Information leaflet on the development of sanctions against Iran - Implementation Day Published in the familiar loose-leaf collection format and also online, HADDEX ensures that users are constantly advised of the latest changes and additions to legislation. The online application offers the additional advantage of greater flexibility and mobility since it can be accessed from any location. 62 FOREIGN TRADE Information events Information Day on Export Control Export Control Day The seventh Information Day on Export Control was held in Frankfurt on 3 December 2015. On 26 and 27 February 2015, experts from the worlds of business, administration and politics addressed the theme of “Export Control in Transition” at the joint forum for foreign trade, the Export Control Day, which was organised by the Foreign Trade Law Centre (ZAR) at the University of Münster and the Federal Office for Economic Affairs and Export Control (BAFA). BAFA welcomed more than 500 representatives from Germany’s exporting companies on the day, along with representatives from the Federal Ministry for Economic Affairs and Energy, the Federal Ministry of Finance, the Federal Foreign Office and the German Customs Investigation Bureau. The event revolved mainly around presentations and exchanges on the latest political, legal and procedural developments in export control. BAFA President Dr. Arnold Wallraff gave the opening speech at the event. Georg Pietsch, Director-General of BAFA, then chaired a series of technical presentations, starting with an overview of European framework conditions. Kai Pawlowski, policy advisor in the division for export control policy and procedural issues (Grundsatzreferat Exportkontrolle), provided an overarching view of European framework conditions. He reported on the status of the Amendment to the European Dual-Use Regulation, the Torture Regulation and the Intra-Community Transfer Directive. Dr. Thomas Jennen, Head of Division at BAFA, provided details of the latest export control regime decisions and changes to the regime goods control list. Speaking about possible procedures for the export of spare parts subject to licensing, Mirjam Kochendörfer, also working as a policy officer in the division for export control policy and procedural issues, urged companies to make greater use of collective export licences. Thomas Barowski, Head of Division for export control policy and procedural issues, provided a general outline of procedural changes and new developments in BAFA’s range of information offerings. Finally, two other BAFA experts spoke on the topic of sanctions at the event. Leif Linnemann, policy advisor at BAFA, presented an overview of the current status of sanctions against Russia and Crimea. Mr Volker Anders, Head of Division at BAFA, described the developments around the expected changes to sanction measures in relation to Iran. Many representatives from export industries took advantage of the opportunity to ask questions and exchange ideas and information with BAFA employees following the event. This year, Professor Gabriel Felbermayr, Ph.D, from the Ifo Centre for International Economics spoke at the politics forum, where he addressed various issues relating to potential risks for German exports. In his view, Germany‘s specialisation in volatile but high-value industries is an opportunity. He said that the resulting successful exports are a sign of this strength over the global competition. The Arab Spring has also emerged as a factor in export control since it erupted in 2011. Dr. Muriel Asseburg from the German Institute for International and Security Affairs delivered a lecture on the individual states in the Arab world. In her view, the Arab Spring has not yet withered, despite the lack, as yet, of long-term stability in these countries - it is merely in a state of flux. Dr. Stefan Meister from the German Council on Foreign Relations (DGAP) provided a detailed insight into the particular factors causing conflict in the current dispute between Ukraine and Russia. Both the internal economic crisis within Russia and Putin‘s self-legitimation are fuelling the conflict. Hans-Jakob Schindler from the United Nations, New York, described in his presentation the paradigm shifts promoted by Al-Qaeda and “Islamic State” (IS) in the realm of international terrorism. New communication strategies and proselytising techniques have led to a worldwide IS network whose priority is to establish its own state. According to the speaker, the appropriate response for the Western world to combat this new terrorism lies in targeted financial sanctions. In the discussion forum, the arms export control policy was the hot topic, as it was in the media in 2014. Hosted by Uwe Proll, Editor-in-Chief of Behörden Spiegel, various political, business and church experts delivered keynote addresses and engaged in a lively and occasionally controversial debate with the audience. It was clearly emphasised that location-related factors play a major role in preserving key technologies. However, the point was also made that the preservation of jobs should not be a factor in deciding for or against an export. FOREIGN TRADE 63 Photo: Experts at the Export Control Day 2015 – l. to r.: Dr. Stefan Meister (DGAP), Dr. Hans Christoph Atzpodien (ThyssenKrupp AG), Dr. Arnold Wallraff (BAFA), Prof. Dr. Stefan Korioth (University of Munich), Dr. Muriel Asseburg (SWP), Prof. Dr. Dirk Ehlers (ZAR, University of Münster), Hans-Jakob Schindler (United Nations), Holger Beutel (BAFA), Karl Wendling (Federal Ministry for Economic Affairs and Energy), Prof. Dr. Hans-Michael Wolffgang (ZAR, University of Münster), Georg Pietsch (BAFA) It was agreed that achieving an ethically informed licensing practice was a worthwhile goal. As a result of the Federal Government‘s enhanced transparency initiative, this issue will be open for public discussion soon. The discussion was conducted by: Karl Wendling, Federal Ministry for Economic Affairs and Energy; Dr. Hans Christoph Atzpodien, Vice President of the Security and Defence Industries Association (BDSV) and Board Member of Thyssen Krupp AG; and Prelate Dr. Karl Jüsten, German Bishops’ Conference – Catholic Liaison Office. The judgement handed down by the Federal Constitutional Court on the information given to parliament in October 2014 regarding arms exports endorsed the Federal Government‘s measures in the above-mentioned transparency initiative. A key element of the new process for handling decisions by the Federal Security Council is that parliament and the public are now informed about ‘green light’ licensing decisions two weeks after these decisions have been made. As part of this process, the Federal Government now presents its Military Equipment Export Report twice a year. There is already greater transparency, thanks to early publication of the annual Military Equipment Export Report. BAFA provides the Ministry for Economic Affairs with extensive data for the report. The Military Equipment Export Report for the previous year is now published before parliament takes its summer break and a short interim report for the current year is published in the second half of the year. In the forum on judicial rulings, Prof. Dr. Stefan Korioth from the University of Munich explained the contents and legal arguments of the Federal Constitutional Court‘s judgement. Prof. Korioth represented the Federal Government in the court case. To round off the second day, senior representatives from the various departments spoke about the latest developments and practical issues in export control. Representing the Federal Foreign Office, Dr. Bernhard Schlagheck provided an analysis of international developments based on his own political experience. Karl Wendling from the Federal Ministry for Economic Affairs and Energy spoke about the economic policy trends in foreign trade law. Peter Bille from the Federal Ministry of Finance reported on the changes in customs legislation and the planned restructuring of customs administration. The latest BAFA developments were presented by BAFA representative Holger Beutel. 64 FOREIGN TRADE Other information events International activities in 2015 In 2015, BAFA continued to collaborate with various chambers of industry and commerce throughout Germany by hosting joint information events on current issues relating to export control legislation. The organisation also took part in information events on export control for decision-makers in companies. Export control can only achieve optimal efficiency if as many countries as possible implement comparable regulations and procedures. This is also an important factor for industry in terms of establishing a level playing field for competition and a guiding principle for BAFA in its negotiations at international level. Once again in 2015, BAFA attended numerous international meetings and engaged in talks with foreign delegations on practical aspects of export control. These discussions focused on legal and technical matters, in addition to administrative and procedural questions. As a contract partner of the European Commission and as part of efforts to find a lasting solution to halting the proliferation of weapons of mass destruction, BAFA helps third countries establish effective export control regimes. Finally, to complete its activities in this sphere, BAFA participated in working groups organised by the Federation of Germany Industry (BDI) and attended information events and sessions hosted by various trade associations (including VDMA and SPECTARIS), which provide a platform for the exchange of ideas and information. The focus here was on four information events about simplifying the export of spare parts, which were held in conjunction with the German Machinery and Plant Manufacturers Association (VDMA). During these events, BAFA provided information about the many simplified procedures already available for the export of spare parts. The events were organised in response to industry requests to recognise customers preferences for spare parts to be delivered as fast as possible and in an uncomplicated manner, as part of the after-sale service. European Union As in previous years, BAFA participated in meetings of various EU committees in Brussels and was involved in drafting legal provisions and further developing legislative processes for export control. Besides the central EU outreach projects, work continued on guidelines for the uniform application of the EU Dual-Use Regulation within the European Union. BAFA was intensively involved in this endeavour and worked closely with the Federal Ministry for Economic Affairs and Energy to bring its technical and administrative expertise to bear on discussions. In addition, BAFA was intensively engaged in reviewing the EU export control system for dual-use goods, a system initiated by the EU Commission with the publication of the Green Paper on dual-use export controls in 2011 and specified in more policy detail with a communication in 2014. BAFA contributed to extensive discussions on measures aimed at harmonising EU member state export control systems and expanding existing control systems appropriately without creating unnecessary administrative effort either for companies and BAFA. The impact assessment process is due for completion in 2016 and is expected to feed into a European Commission proposal for a regulation. BAFA also took part in the conferences organised at European level to inform the European Parliament and European industry as part of the impact assessment process. FOREIGN TRADE 65 Photo: European Commission in Brussels BAFA continues to perform its mandate as part of the EU sub-working group on possible controls on the export of goods that could be used in monitoring telecommunications and the Internet. publications and presentations on the subject. In addition, BAFA is assisting the German Central Bank with its task of monitoring payment transactions in accordance with the Council Regulation on the embargo on Iran. During intensive consultations on amending the anti-torture regulation, BAFA was actively involved in providing technical and administrative advice to the Federal Ministry for Economic Affairs and Energy and in meetings of the relevant Council Working Party. Consultations at EU level are also focusing on evaluating the EU directive on transfers of defence-related products within the Community. The purpose of this directive is to harmonise and simplify the transfer of military equipment within the European Union. It is currently being reviewed in terms of its effectiveness and other possible areas of improvement. As the relevant licensing authority, BAFA is contributing its technical and procedural expertise in this context in order to further strengthen intra-Community trade. The consultations between the “Letter of Intent” countries were also conducted by BAFA with the same objectives in mind. In the area of trade restrictions, 2015 was dominated by the developments around sanctions against Iran. After the Vienna nuclear negotiations between the E3+3 states (Germany, France, United Kingdom, China, Russia and the US) and Iran managed to reach a successful conclusion, the parties extensively explored possibilities for lifting sanctions. BAFA was intensively involved in this process. These explorations ultimately formed the basis of Regulations (EU) 2015/1861 and 2015/1862. “Implementation Day” took place after the International Atomic Energy Agency (IAEA) confirmed that Iran had implemented the first key steps to shrink its nuclear programme. The lifting of sanction measures contained in Regulations (EU) 2015/1861 and 2015/1862 thus came into effect on 16 January 2016. BAFA also played a major role in subsequent discussions formulating the licensing procedures with the involvement of the United Nations. Furthermore, additional changes were made to almost all other sanctions regimes. In collaboration with the Federal Ministry for Economic Affairs and Energy, BAFA provided input in these discussions in the form of technical and administrative expertise. BAFA has also kept industry informed about the new legal situation by publishing a range of notifications, responses, other Furthermore, discussions continued on implementation of the firearms regulation, continuing the exchange among EU Member States started in 2014. This regulation (Regulation (EU) No. 258/2012) entered into force on 30 September 2013. In addition to containing the relevant firearms legal provisions, it also introduces uniform provisions for the export control of certain firearms and their ammunition throughout the EU. To complete its activities in the sphere of defence-related goods at European level, BAFA also participated in the sessions organised by the COARM Working Group, which seeks to harmonise licensing practices in the member states. 66 FOREIGN TRADE EU outreach projects BAFA also continues to implement EU outreach activities with third countries on behalf of the European Commission. These activities aim to strengthen and harmonise arms transfer control systems internationally, while cementing cooperative relationships with partner countries. EU outreach projects are based on the European Security Strategy Against the Proliferation of Weapons of Mass Destruction, on UN Security Council Resolution 1540 and the United Nations Arms Trade Treaty (ATT). In relation to the ATT, BAFA is currently carrying out its largest project – the EU-ATT outreach project (ATT-OP). The project started in April 2014 and will run until 2017. It is being funded by the EU, the Federal Foreign Office and BAFA itself. The number of countries involved is much greater than in previous projects. The following countries are now included: Barbados, Benin, Burkina Faso, Cambodia, Columbia, Costa Rica, Dominican Republic, Georgia, Ghana, Jamaica, Peru, Philippines, Senegal, Togo and Zambia. The key pillar of the outreach projects, which applies also to ATT-OP, is the creation of a customised approach for each activity. This approach comprises the following subcategories: Data collection and reporting under the ATT, legislation, licensing, awareness-raising among relevant stakeholders in government institutions, industry and civil society, sanctions and customs. Over the past year, multiple events were organised in association with the partner countries. The following activities were of particular note: In May 2015, two regional seminars were organised for ECOWAS member states and some of their neighbours in Senegal, and also for the entire Asia region in the Philippines. Attracting approximately 90 participants in total, these regional seminars were mainly dedicated to raising awareness of the content and goals of the ATT. Similar events had already been organised in November 2014 in Columbia for Latin America and the Caribbean, and also in 2015 in South Africa for African countries. The final regional seminar of the ATT-OP was held in March 2016 in Georgia for OSCE member states. 2015 stood out as a year for developing long-term strategies for cooperation with the individual partner countries of the ATT-OP. Through joint efforts, some nine roadmaps were drafted. Cooperation often focused on the key topics of adapting national legislation to the ATT, training courses for customs staff, halting illegal transfers of conventional armaments and liaising between authorities. Given the global scope of the ATT, BAFA also sees the outreach measures as a contribution towards international efforts in promoting non-proliferation. For this reason and to avoid duplication of effort, close coordination and cooperation with other donor countries and international organisations is vital. In many partner countries, BAFA therefore works closely together, for example, with the United Nations Regional Centre for Peace, Disarmament and Development in Latin America and the Caribbean (UNLIREC), the United Nations Regional Centre for Peace and Disarmament in Africa (UNREC), ECOWAS and CARICOM. Partners from society at large also regularly take part in the activities. By including international experts in the dialogue, we also improve the chances of responding more appropriately to the particular needs of countries and regions. In 2015, the Federal Foreign Office tasked BAFA with executing outreach projects with a purely national scope for the first time. The “ATT Implementation Support Measures” project was one such initiative intended to promote the ATT-OP. The national ATT project in this case was increasingly aimed at regions that had not previously been strongly targeted by the ATT-OP. It consisted of two sub-regional workshops for Southern Africa and various Caribbean states. While the workshop for the African states addressed the general issues relating to implementing the ATT and the resulting demands on the signatories, the event organised for the Caribbean states focused more specifically on the subjects of shipping and transit. Both events were a resounding success. This was demonstrated by the fact, among other things, that after taking part in the national project, some of the participating states then successfully applied to the EU for partnerships in the ATTOP. BAFA’s successful work in connection with this national ATT project will also continue in 2016 in the form of a follow-up programme funded by the Federal Foreign Office. Furthermore, as part of another national ATT project, BAFA organised an “ATT Round Table” in Frankfurt (9 – 10 December 2015). This event allowed EU experts, representatives of international organisations and 40 participants from ten partner countries of the ATT-OP to discuss current developments relating to ATT ratifications in the relevant countries and also exchange their own experiences of the project. FOREIGN TRADE 67 Photo: Participants at the ATT Round Table in Frankfurt, Dec. 2015 Participants and experts took part in various working groups to discuss some of the choke points in implementing the treaty and come up with joint solutions. There was a particular spotlight on the areas of customs procedures, reporting and cooperation between authorities. Since January 2014, BAFA has led a new project in the area of dual-use goods (CoE Project no. 38), designed especially for Kazakhstan and Jordan. Following the introductory phase, which was completed at the end of July 2015, the implementation phase began and will run for two years. The action plans elaborated jointly with the two countries will be implemented with the support of a long-term expert in Amman (Jordan) and Astana (Kazakhstan) respectively. Support will also be provided by the outreach team in Eschborn. In Jordan events aimed at representatives from industry and the relevant authorities were held, in addition to a training course for customs employees and an information event on export control. Two meetings were organised with Kazakhstan on the subject of providing technical support to Kazakhstanian partners with setting up the “identification centre” for nuclear and radioactive substances. Kazakhstan is currently updating its export control legislation. With the establishment of this initial identification centre, the country plans to incorporate its technical expertise within an institutional framework and embed goods classification within a licensing procedure. A one-year project funded by the Federal Foreign Office bolstered cooperation with the People’s Republic of China. Working meetings held in Germany and China helped to strengthen bilateral dialogue. This atmosphere of enhanced cooperation also provided opportunities for all parties to exchange information on relevant technical issues. In addition, the working meetings in Germany provided an occasion for communication with representatives from the Federal Foreign Office and the Federal Ministry for Economic Affairs and Energy. There are plans to continue this successful cooperation with China with another national project carried out on behalf of the Federal Foreign Office. In the area of military equipment, the outreach measures for promoting effective control of arms export were continued in 2015 first and foremost with a project funded by the Federal Foreign Office and implemented by BAFA at national level. This followed the successful conclusion of EU outreach projects already conducted by BAFA (COARM, 2010-2014). Regional events were organised for partner states in South East Europe and the Caucasus area, in addition to individual activities for Georgia and Serbia. To continue the provision of support in the area of military equipment, BAFA was again mandated, under the Council Decision 2015/2309/GASP of 10 December 2015, to implement COARM activities for the period from January 2016 to December 2017. As in the previous COARM project, a host of events are planned, including regional seminars, study trips to EU Member States and individual support measures, for partner states in the South East European, East European, Caucasus and North African regions. 68 FOREIGN TRADE International export control regimes Australia Group (AG) Various international export control regimes have been in existence for more than 20 years. These regimes seek to prevent the “destabilising accumulation” of conventional weapons and the proliferation of weapons of mass destruction and their delivery systems. The participating states coordinate their export policies within these regimes, with decisions being implemented at national level or in accordance with the EC Dual-Use Regulation 428/2009. In 2015, the annual plenary of the Australia Group took place in Australia (Perth) to mark the 30th year anniversary of the establishment of the group. The measures taken there included clarification of the control text for a freeze-drying system, also with BAFA’s support. Proposals on implementing the equipment from P3/P4 laboratories were discussed, along with proposals on the clarification of the scope of control of equipment used for cross-flow filtration and fermentation. No final decisions have yet been reached. Reconsiderations are required regarding the substances already discussed under the heading of “Pharmaceutical Based Agents” (PBA). Diethylamine was added to the control list as a new chemical. The inclusion of salt compounds on the list of precursors for chemical warfare agents was also discussed. There are four export control regimes, namely the “Australia Group”, the “Nuclear Suppliers Group”, the “Missile Technology Control Regime” and the “Wassenaar Arrangement”. In addition to pursuing the regime aims outlined above, the states seek, through collaboration within these regimes, to harmonise the international level of export control within member states and thus level the playing field in terms of market and competitive opportunities, while protecting security interests. The “New and Evolving Technologies Technical Experts Meeting” held in 2015 focused on synthetic biology, with presentations on the latest topics such as CRISPR/Cas9 technology. There are ongoing discussions, in this context, about the control of genetic elements containing nucleic acid sequences that are associated with the pathogenicity of listed agents. Progress was made on defining and clarifying the nomenclature of some already controlled toxins and bacteria. Expert forums will continue work on this subject and the control of Shiga toxin-producing Escherichia coli. The submission made by BAFA and others to remove the dengue virus from the control list could not yet be adopted. In the area of procedures and following the successful implementation of brokering controls in the Australia Group Guidelines, Germany was mandated with drafting a discussion paper on preparing another guideline change to introduce transit controls. The discussion paper was drafted by BAFA, accompanied by a questionnaire and then presented and discussed as part of the plenary in 2015. The questionnaire was designed to ascertain the current inventory of transit controls in the AG member countries. It is planned to present an evaluation of the questionnaire to member countries as part of the plenary in 2016 and follow up with an appropriate proposal on introducing transit controls. FOREIGN TRADE 69 Missile Technology Control Regime (MTCR) In 2015, Luxembourg and The Netherlands took over joint chairmanship of the MTCR, the first time the chair was shared between two member states in the history of the MTCR. The plenary meeting was held in early October in Rotterdam and Norway, the outgoing chair, passed on the responsibility to the two new incumbents. The technical working group met in Bern in the spring of 2015. German criminal law in relation to foreign trade regulations and possible legal remedies in criminal and administrative proceedings. The session therefore covered the steps involved in a preliminary investigation and legal proceedings and also the associated forms of appeal available. On the subject of administrative law, it outlined the development of objection proceedings, associated legal remedies and bringing an action before a court. In 2015, the technical working group managed to reach agreement on proposals in 23 cases, resulting in 3 additions and 21 clarifications in the MTCR control list (MTCR annex). One of the key areas addressed by the meetings of the technical working group was the subject of gel propulsion systems and gel propellants. The addition to the control on rocket motors with gel propellants was agreed. Pneumatic flight control systems for missiles were added to the list of items controlled. It was also clarified that fly-by-light flight control systems for missiles are subject to control. Another topic on the agenda concerned the control of software and equipment necessary to enable a manned aircraft to be operated as an unmanned aircraft. At the 2015 plenary, Germany’s initiative to add brokering and transit controls to MTCR regulations was successfully completed. In 2012 Germany was mandated, in the area of procedures, with drafting proposals on the introduction of brokering and transit controls. Since then, BAFA has proposed an addition to the MTCR Guidelines, on the basis of questionnaires circulated on the existing legal framework of all MTCR members. In relation to the evaluation of export applications for MTCR-listed items, MTCR members came to a consensus that brokering and transit are to be handled with due regard to specific national conditions. This joint decision adds the control of transits and sensitive brokering services to existing national export controls, if no country-specific regulations have yet been defined. The aim here is to plug control gaps and make international export controls more efficient, in line with the standard of controls according to the EU Dual-Use Regulation. Harmonisation between the regulations of MTCR members should also remove any competitive disadvantages faced by German economic operators. BAFA also gave the MTCR partners a presentation on the German internal export compliance system or Internal Compliance Programme (ICP) and the audits carried out by BAFA in this context. Besides illustrating the legal basis of the system in the EC Dual-Use Regulation and the Foreign Trade and Payments Regulation, the presentation also outlined possible criteria for an internal compliance programme and the different audit intensities. The MTCR partners were also interested in Photo: Testing a space shuttle main rocket engine 70 FOREIGN TRADE Nuclear Suppliers Group (NSG) Wassenaar Arrangement (WA) The Technical Experts Group (TEG) continues to focus on updating the goods control lists in line with technical developments, while harmonising the control lists with other export control regimes. The modifications made to the NSG control lists in the plenary sessions are to be adopted in the plenary meeting taking place in 2016 and then published by the International Atomic Energy Agency (IAEO) in the updated documents INFCIRC/254/part 1 and INFCIRC/254/ part 2. Once again in 2015, BAFA’s technical experts took part in the annual negotiations of the 41 member states of the Wassenaar Arrangement (WA) to update the control lists. As part of this endeavour, Germany continues to be actively involved in discussions with countries in possession of the controlled technologies. The control parameter for the large number of high-quality machine tools exported from Germany was adapted. Other list updates referred to the control of analogue-digital converters and other electrical equipment (including rechargeable battery cells). A proposal from Germany addressed thermopiles, a technology mainly developed or jointly developed in Germany for infra-red sensors. Due to the non-critical application profile, a more or less comprehensive exemption was obtained. In the area of optics, special mirrors that bundle sunlight were exempted from a listing. 2015 also saw changes in the area of information security, with existing regulations being adapted more in line with risk factors. Member states jointly agreed in 2015 on best practice guidelines for the transit of goods. These guidelines will allow for more consistency in the evaluation of situations and the associated legal consequences. A position paper was published following discussions on consistent reporting standards between the member states. This will bring greater consistency to the international reports. Photo: “Cherenkov radiation” In the area of procedures, 2015 was an active year for consultations among member states on the significance and relevance of the NSG guidelines. The consultations are continuing to progress in 2016. Following the changes to sanctions on Iran, the international Procurement Channel for export of nuclear goods to Iran and the impact of this channel on the NSG regime is another important issue. The Procurement Channel was set up with the Joint Comprehensive Plan of Action (JCPoA) and UN Security Council Resolution 2231 and entered into force on 16 January 2016. BAFA played an active role in the Licensing and Enforcement Experts Meeting (LEEM), giving presentations in conjunction with the Customs Criminal Investigation Office on national customs training courses. The information exchanges between the WA member states focused on the topics of illegally diverted deliveries in regions of conflict and also on preventing destabilising accumulations of small and light weapons and related ammunition. In 2015, efforts were made to prohibit terrorists from illegally procuring armaments and dual-use goods. More intensive discussions will take place on this subject in 2016. There was closer cooperation in many agreed areas: These include risk analysis in the area of arms trade, questions on re-exported goods, trading transactions and brokering, technology transfers and the catch-all mechanism. Overall, 2015 can be described as a year in which many open issues were concluded for the Wassenaar Arrangement. New items on the agenda were proposed in preparation for the assessment year confirmed for 2016. This, the fifth assessment to date, will take place in the twentieth anniversary year of the existence of the Wassenaar Arrangement. The overall functioning of the WA will be reviewed and proposals drafted for improving effectiveness and efficiency. FOREIGN TRADE 71 United Nations/International law Other international activities in 2015 BAFA was named by an EU Council decision as the implementing agency for the Union activities supporting the implementation of the ATT in third countries, in the framework of the European Security strategy (see also EU outreach projects). In 2015, BAFA took part in various state conferences in order to help other states implement the ATT. Over the past year, as in previous years, BAFA nurtured many bilateral ties with foreign states. Talks were held, for example, with Japanese and Chinese delegations. BAFA was again actively involved this year in the trilateral consultations on export control legislation held between Germany, Austria and Switzerland. In addition to maintaining bilateral ties, BAFA actively participated in many national and international initiatives. As in previous years, BAFA attended the twenty-second Asian export control conference in Tokyo in 2015. 72 FOREIGN TRADE Germany In 2015, BAFA continued to support the relevant ministries with technical expertise in relation to legal amendments. These consultations focused on the introduction of new controls in relation to the export of surveillance technology and the provision of technical support for this type of product. Following intensive consultations between the relevant ministries and BAFA and with the involvement of the relevant industrial group, licensing requirements were introduced for the export of monitoring centres and telecommunications data retention systems, by means of a fourth amendment to the Foreign Trade and Payments Ordinance (AWV) and expansion of Part I Section B of the Export List. These licensing requirements will enable exports to be banned, if necessary, in order to protect human rights and prevent internal repression in the country of destination. With the same objective in mind, new authorisation and notification requirements for these goods were introduced (insertion of Sections 52a, 52b AWV). Another key area of focus for these national consultations was the revision of the Federal Government’s “Small Arms Principles” (Kleinwaffengrundsätze), which set out export control policy guidelines for the export of small and light weapons, related ammunition and corresponding manufacturing equipment to third countries. The revised version of these principles reinforces the export control of armaments in order to reduce the existing risk of accumulation and uncontrolled transfer of small and light weapons. According to these principles, the recipient shall undertake to destroy the weapons that are to be replaced by the new purchase or, where applicable, to destroy the weapons received when taken out of service in future. In addition, the recipient gives an assurance that German authorities can verify the end use of the exported goods on site. Furthermore, not only the fourth, but also the fifth ordinance amending the Foreign Trade and Payments Ordinance was published. In addition to implementing changes to wording, the purpose of this ordinance is to adapt sanctions, in particular against Russia. BAFA also updated the forms for nominating the Export Compliance Manager (“Ausfuhrverantwortlicher”) and their assumption of responsibility (AV1 and AV2). Instructions for completing the forms were added. Nominating an export compliance manager is an essential part of applying for export licences: this person is personally responsible to BAFA for complying with export control regulations. The export compliance manager (“AV”) must also be a member of the board of management or managing director of the company. In 2010, BAFA set up an interface with ATLAS, the IT system used by customs administration. The data for all export licences are transferred to customs via this interface. Further improvements were made to the system in 2015. This is a very positive development for the export industry, which will no longer be required to submit paper copies of export licences for customs declarations. FOREIGN TRADE War weapons control Outlook for 2016 The prohibition of wars of aggression and the full control of weapons intended for warfare are enshrined in the German Basic Law. These weapons may only be manufactured, transported and marketed with the approval of the German Federal Government. In fulfilment of this constitutional mandate, the War Weapons Control Act regulates the handling of these weapons (including their manufacture, transport, purchase and transfer). Various Federal Ministries act as the licensing authorities in charge of this regulation, in particular the Federal Ministry for Economic Affairs and Energy. The following issues will be to the fore in 2016: BAFA is responsible for the monitoring and control of companies and facilities involved in the legal handling of war weapons. Manufacturing, maintenance and recycling companies based in Germany come under this scrutiny, as well as research institutes, museums and film production firms based here. The core elements of BAFA’s war weapons control consist of on-site audits and inspections of the registers of war weapons, which must be submitted to BAFA in compliance with the semi-annual reporting requirements implemented in War Weapons Control legislation. On-site audits may include a survey of existing volumes of war weapons, inspection of safeguards implemented and verification of inhouse documents. 73 •• Providing support to the Federal Ministry for Economic Affairs and Energy in reviewing the EU export control system for dual-use goods; also organising exchanges in order to share experience on standards related to enacting export control legislation within the EU. The objective here is to draft guidelines. •• Continuation of efforts within international export control regimes to achieve international consistency across existing export control standards, especially with regard to the exchange of negative decisions (“denials”) in order to prevent disparities between decisions. •• Increasing the range of collective export licences in order to facilitate, in particular, the export of machine tools and spare parts. •• User-friendly reformulation of the statements of end-use to reflect legislative changes. •• Providing ongoing support to the Federal Ministry of Economic Affairs and Energy in implementing the “Small Arms Principles” and carrying out on-site inspections of the end use of armaments. In 2015, about 282 companies and facilities were monitored by BAFA. Overall, 106 external audits were conducted. •• Continuation of efforts towards establishing an EU database for denial notifications (denial database) to improve the exchange of information between EU member states As part of its surveillance mandate, BAFA visits amnestied owners of war weapons with arms possession registration cards and checks whether their firearms are stored appropriately. •• Provision of a wider range of information for industry through the publication of additional leaflets, particularly in the area of technology transfer by electronic means, embargoes, and existing simplified procedures Furthermore, BAFA is involved in reporting to the UN Arms Register on behalf of Germany and to the relevant bodies in accordance with the Treaty on Conventional Armed Forces in Europe (CFE). •• Continued implementation of measures to reduce red tape Prohibition of anti-personnel mines BAFA is involved in another international verification agreement: It takes part in monitoring and reporting procedures under the Convention on the Prohibition of Anti-Personnel Mines. •• Ongoing improvements to electronic communication with companies (ELAN-K2), •• Revision of goods control lists •• Support for structural reform of the Federal Revenue Administration and further enhancement of the cooperation between BAFA and customs with regard to risk-focused investigation of export transactions by customs offices (recipient-specific risk management, including handling of denials). •• Evaluation of the licensing procedure for private security services for the protection of ships after two years in practice and processing of the first follow-up licences. 74 FOREIGN TRADE Chemical Weapons Convention (CWC) The Chemical Weapons Convention (CWC) is a multilateral disarmament and arms control treaty. Its main objective is the worldwide prohibition of chemical weapons and the complete destruction of all existing stockpiles of chemical weapons. In addition to imposing trade restrictions and prohibitions, the CWC also makes arrangements for the control of certain industry sectors that handle CWC-controlled chemicals in order to enhance transparency and build confidence. The Federal Foreign Office is the national authority and relevant ministry for the CWC in Germany. BAFA is responsible for implementing the CWC in industry, under the technical supervision of the Federal Ministry for Economic Affairs and Energy. Declarations Twice a year, approximately 200 companies submit declarations to BAFA regarding their handling of the chemicals listed in schedules 1, 2, or 3 and of discrete organic chemicals (DOC). BAFA checks the accuracy of these declarations and sends the data to the Organisation for the Prohibition of Chemical Weapons (OPCW) in The Hague. BAFA published details of the CWC’s current reporting and licensing requirements in the Federal Gazette of 7 January 2015. OPCW activities The OVCW working group on industry verification discussed the classification of Schedule 1 chemicals that may arise in very low concentrations as “unavoidable by-products” during certain chemical processes. Discussions were also held on the introduction of sampling and analysis using a mobile analysis device (GC-MS) in DOC/Schedule 3 inspections. This verification tool has already been used as part of the routine procedure in Schedule 2 inspections since 2006. The recommendations of the Scientific Advisory Board to the OPCW were another key discussion point. These recommendations included the additional listing of the biotechnological production of Discrete Organic Chemicals (DOC) and the complete listing of the production of DOC compounds. They also propose the use of publicly available information for evaluations, support for verification measures and possible changes to the selection process for DOC inspections. The OPCW budget for 2016, which was agreed at the twentieth session of the Conference of the States Parties in The Hague in December 2015, provides for a total of 241 industry inspections (as per the budget for the previous year). FOREIGN TRADE 75 OPCW routine inspections Based on the declaration data received, OPCW inspectors undertake regular inspections globally in the companies making declarations under the CWC. During routine inspections, the OPCW inspection teams check for the accuracy of declarations, the non-diversion of declared chemicals and the absence of chemicals that could be misused as warfare agents. BAFA escorts the OPCW inspectors during their on-site inspections in Germany. The main objectives of BAFA‘s activities in this regard are: first, to fulfil the inspection mandate resulting from the CWC; second, to protect the company‘s confidential internal expertise. It advised companies, in the course of company visits, about the requirements of a possible OPCW inspection. In 2015, 13 industry inspections were carried out in Germany, bringing the total number of industry inspections performed in the country since 1998 to 170. All requirements were successfully fulfilled, once again, for the inspections carried out in 2015. An OPCW mobile analysis device (GC-MS) was used for a Schedule 2 inspection, for the eighth time in Germany since 2007, as part of the routine procedure for industry inspections. In 2015, due to the growing number of industry inspections in Germany, BAFA continued its work in preparing companies potentially subject to such inspections. Figure 4: Number of industry inspections in Germany 2001 – 2015 15 12 9 6 3 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 76 FOREIGN TRADE Import restrictions Under the EU common commercial policy, import restrictions were also imposed in 2015 on the basis of bilateral agreements and on autonomous EU measures. These trade restrictions and measures are intended to protect specific sectors of the European economy from excessive imports from third countries and to implement legally binding international treaties. In 2015, textiles from the third countries Belarus and the Democratic People‘s Republic of Korea were subject to import restrictions in the form of autonomous quotas. BAFA granted 55 import licences for importing certain textile products originating in these countries. Another import option for certain clothing products available to specialised manufacturers within the EU is economic outward processing: the manufacturers export goods originating in the EU to Belarus for processing and then subsequently re-import the processed goods into the EU. BAFA issued 15 prior approvals in this area. Tariff quotas Raw wood imports for the European Union are economically significant and the Russian Federation plays an important role as a supplier of raw wood to the European Union. For these reasons, the European Commission has negotiated tariff quotas with the Russian Federation at reduced export duties on certain categories of spruce and pine exported to the European Union. The administration of these tariff quotas is managed by the EU member states. BAFA issued 15 quota authorisations in this area. FOREIGN TRADE 77 Cross-border transfer of radioactive substances According to the Atomic Energy Act and Radiation Protection Ordinance, BAFA is responsible for all licensing and reporting procedures for the cross-border transfer of nuclear fuel and other radioactive substances, including highly radioactive sources. The licensing and reporting procedure was successfully migrated to an electronic application process in 2015. Information on the various licensing and reporting procedures is available on the BAFA website under the heading “Radionuclides/ Nuclear fuels”. Other key priority tasks in this field are: control of the end-use of nuclear material; monthly reports to the relevant Länder regulatory bodies on recorded imports and exports; the preparation of relevant statistics. Overall statistics compiled annually in this field by BAFA are regularly published in the „Environmental radiation and radiation exposure“ report of the Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB) and are available online at www.bfs.de. BAFA also monitors the cross-border traffic of radioactive waste and spent fuel elements, reporting regularly to the EU on this activity. Licences are also issued for consumer goods containing radioactive substances (either added or activated), such as watches, measuring devices, sighting devices and telescopic sights containing tritium, ionisation smoke detection systems, gas mantles or precious stones irradiated for certain colour effects. These specialised tasks are thus administered collectively on behalf of the Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety. BAFA advises the Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety, the relevant Federal Government-Länder Committees, as well as the EU and the industries active in the areas specified. Thus BAFA is represented on international committees, and collaborates with international partners both at an EU level and as part of the International Atomic Energy Agency (IAEA), for example. Although the above procedures are implemented independently of the export controls conducted under the supervision of the Federal Ministry for Economic Affairs and Energy, there are some similarities: in both cases, various goods are simultaneously included in nuclear energy legislation and in the goods lists of the export control regimes. 78 FOREIGN TRADE Satellite data security The German Satellite Data Security Act (SatDSiG) is intended to safeguard the foreign policy and security interests of Germany with regard to the international distribution of earth remote sensing data generated using satellites for commercial and scientific purposes. It applies only to high-grade, satellite-based earth remote sensing systems which can generate geodata (commonly referred to as satellite images) from space with a particularly high information content. Under the Satellite Data Security Act, BAFA is assigned important tasks related to national data security policy. It grants the necessary licences to the operators of high-grade earth remote sensing systems and authorisations for the primary data providers who wish to distribute the data obtained from such systems. In such cases, this requires, among other things, compliance with certain security procedures and standards, technical and organisational measures and proof of reliability. As a supervisory authority, BAFA regularly reviews the owners of operating licences and data distribution licences as part of a government audit. On application, BAFA determines whether a space-based earth remote sensing system is „high-grade“ within the meaning of the Act. It is also responsible for evaluating the plethora of different data products derived from satellite data with regard to the risk they pose to the subjects protected by the Act. BAFA issues permits for the distribution of high-grade earth remote sensing systems and for those of the data generated by these systems. Important applications of the Satellite Data Security Act are the two extremely high-performance German radar satellites TerraSAR-X and TanDEM-X. These are among the most powerful earth remote sensing systems in the world and are capable of mapping the surface of the earth by day and by night with a high geometric resolution. The Satellite Data Security Act governs the distribution of high-grade earth remote sensing data in a two-stage process. Using a test procedure strictly specified under the Act that leaves no room for the user‘s own evaluation, the service provider first checks the sensitivity of the data in terms of whether delivery of the data to a customer risks damaging Germany‘s essential security interests, the peaceful coexistence of its people or the foreign relations of the Federal Republic of Germany. A high level of transparency, predictability and speed of the test process is guaranteed as a result, particularly for the distribution of commercial data. In the case of sensitive data, the customer request may only be handled once BAFA has issued a permit. Permission is also required if the data provider intends to distribute data without a specific customer request (e.g. for a publication or for advertising purposes). BAFA must refuse permission if the distribution of the data constitutes a threat to Germany‘s essential security and foreign policy interests. To facilitate prompt processing of applications, BAFA has provided the option of electronic submissions for many years now. In 2015, BAFA issued 1,800 permits for the distribution of data from high-grade earth remote sensing systems. FOREIGN TRADE 79 Maritime security Piracy remains a serious problem for shipping companies and therefore for international trade. Private armed security personnel are still deployed on board ships in highrisk areas to protect crews, cargo and vessels. To meet these specific quality requirements and provide legal certainty to shipowners, crew and the security companies themselves, mandatory licences are required, since 1 December 2013, to exercise this business activity under Section 31 of the Trade Regulation Code (GewO), both for security companies based in Germany and those based abroad that wish to perform security functions on board ships flying the Federal flag. Since 21 June 2013, BAFA is therefore the competent authority for accepting licence applications from private security services assigned to protect the crew and cargo on board ocean-going vessels in international waters from pirate attacks. The licensing procedure (available in English and German versions) can be completed electronically to a large extent and is carried out in close cooperation with the Federal Police. The applications are assessed on the basis of section 31 of the Trade Regulation Code in conjunction with the Ocean-Going Vessel Security Ordinance of 11 June 2013 (Federal Law Gazette I p. 1562) and the Ocean-Going Vessel Security Implementing Ordinance of 21 June 2013 (Federal Law Gazette I p. 1623). BAFA has also provided comprehensive information and tools, such as the Self-Assessment on its home page in English and German, to help applicants familiarise themselves with the complex licensing procedure. Since the licensing procedure started, 13 companies have been granted an initial licence. These included 5 foreign undertakings alongside German companies. The licences were or are issued for a period of two years, subject to certain conditions. Aside from monitoring requirements, conducting spot checks and prosecuting administrative offences, BAFA also drafted an extensive report about its experience of the licensing procedure, in collaboration with the Federal Police and the Federal Maritime and Hydrographic Agency. This report was submitted to the Bundestag on 1 July 2015 by the Federal Ministry for Economic Affairs and Energy (Bundestag printed paper 18/5456). Now, over two years since the licensing procedure for private security companies on board ocean-going vessels entered into force, it is clear that the procedure has proven to be successful. It is also recognised both nationally and internationally. The procedure has improved quality assurance in the supply of maritime security services while also raising awareness among security companies about existing legal requirements. The relevant requirements relate, in particular, to the legal purchasing, export and storage of equipment and obtaining of arms and export control licences or authorisations. At international level, BAFA took part in meetings of the European Commission’s Maritime Security Council and the Maritime Safety Committee of the International Maritime Organization (IMO), in order to share its experience of regulating security companies on ships. Much of the work in 2016 will involve processing follow-up applications. 80 I N S I D E B A FA Inside BAFA The Federal Office of Economic Affairs and Export Control (BAFA) actively helps to implement structural changes within the public administration sector, interacting with citizens, companies, associations and authorities at home and abroad in a fair and responsible manner. I N S I D E B A FA Overview Management: President Dr. Arnold Wallraff Vice President Bernd Enders Locations: Eschborn and Bochum Budget 59.4 million euros in basic funds; 1.7 billion euros to fulfil our tasks Key areas of expertise •• Foreign trade •• Economic development •• Energy Number of employees BAFA Germany Trade & Invest (GTaI) On 31 December 2015, 784 people were In 2015, BAFA was again active in its employed at BAFA: capacity as employer of the 148 staff assigned to Germany Trade & Invest. •• 405 men •• 379 women Of these, 35 work internationally as foreign correspondents. •• 494 salaried employees •• 256 permanent civil servants •• 34 trainees •• •• •• •• 14 lower grade civil servants 229 intermediate grade civil servants 394 upper grade civil servants 113 higher grade civil servants 81 82 I N S I D E B A FA HR management Dr. Andrea Vater, Director-General, Central Services Berufundfamilie audit certificate Recruitment BAFA was recognised for the third time as an especially family-friendly employer in 2015 and was awarded the audit certificate berufundfamilie by the Hertie foundation. The award is evidence that a family-friendly policy must not just exist in theory, but also in practice in everyday life. An online application management system means that a seamless online application process is a given at BAFA. As an additional modernisation measure in the recruitment area, all job advertisements are now posted on an Internet jobs site. BAFA’s recruitment profile is that of a modern and forward-looking authority. In 2015, 58 staff were hired after 26 job advertisements were posted. The challenge of looking after children while coping with the demands of the workplace - this has been a key issue in the work/life balance debate over the past few years. Efforts to achieve a balance will continue in the years ahead. Measures sought include the addition of more places in the Zwergenburg day care centre for children and more opportunities for flexible ways of working (remote and mobile working). In line with general demographic trends, BAA employees are facing another pressing demand: how to combine caring for family members and dependants with their work. In 2014, BAFA joined the “Charter for Work/Care Balance”, an initiative of the Land Hesse. The charter signatories want to create a working environment in which the task of caring for family members and dependants is duly recognised as an important social responsibility, rather than being considered as a social stigma. In 2015, in a first step towards this goal, two employees were hired as care advisors. The care advisors can be contacted by employees in an acute care situation, and are also available to give basic advice on organising care and to provide information on legal requirements. I N S I D E B A FA 83 Human resources development Our policy of equal opportunities for men and women reached a number of milestones. Almost the same number of women were recruited as men. In terms of appointments to tenured civil service positions, the percentage of women employed is almost the same as the overall percentage of women employed in the higher and upper grades. The percentage of women awarded promotions is actually higher than the proportion of women in the civil servant group. At senior executive level, the percentage of women rose to 28.3 %. Training Vocational training continues to have high priority at the Federal Office of Economics and Export Control. BAFA currently has 31 trainees working in the career fields “Office communication specialist”, “Office management clerk”, “Information technology specialist” and “Chef”, two students enrolled in the dual study programme in „Business Informatics” and one student, for the first time, in the dual study programme “International Business Administration and Foreign Trade”. Ten trainees successfully completed their final examination, nine of them as specialists in office communication and one as an information technology specialist. Two graduates were invited to the Federal Ministry for Economic Affairs and Energy in recognition of their outstanding performance during their traineeship. Trainees at BAFA currently represent 6.63%, just below the required quota specified in the National Training Pact. The approach pursued by the new Alliance for Initial and Further Training is already reflected in BAFA’s dual system of vocational training. Within the application procedure for the chef training position training, for example, the applicant selected had no school leaving certificate, but completed the “qualified lower secondary school certificate” (Qualifizierter Hauptschulabschluss or “Quali”) during the application procedure. The school leaving certificates held by the trainees in the new training year thus ranged from the “Quali” to the “Abitur” certificate that gives right of entry to university. In the recruitment year of 2015, two single mothers, including one older applicant (with 1 and 2 children each) were hired for training as “Office management clerk”. Having successfully completed their trial periods, they are continuing their training on a part-time basis. At BAFA, the percentage of trainees with a migration background is usually around 25 % to 30 %. Since the new job profile “Office management clerk” no longer requires the additional commercial training previously offered by BAFA, the new trainees for this job and for the “chef” job profile look for training schemes based in cooperating enterprises in the private sector to enhance their overall training. In summer 2015, a practical vocational stay abroad was arranged for one of BAFA’s trainees on completion of her exams, as part of the European Union “Erasmus+” programme. BAFA remains committed to offering high-quality training across a comprehensive range of apprenticeships and also (since 2013) in the form of dual study programmes. In search of suitable trainees to fill the many trainee positions available, BAFA gave more presentations at various education fairs and information days in schools and other establishments such as chambers of industry and commerce or the RheinMain University of Cooperative Education. We will continue our efforts in 2016 to maintain or indeed increase the BAFA trainee quota and continue to offer young people traineeships within a skilled field. 84 I N S I D E B A FA Further education and qualification programmes Policy advisors group Employee training and further qualification is one of BAFA‘s core values. The organisation therefore offered a large number of further education measures in 2015, including internal training sessions in particular. A total of 41 internal seminars and workshops were held in addition to 203 external training events. Thanks to the internal training courses, it was possible to cover employee training requirements cost-effectively, promptly and appropriately. Participants at the seminars could also rely on receiving more personal attention. The policy advisors group (Referentenkreis) is an independently organised platform of the approximately 50 policy advisors in BAFA. With regularly organised events, it has become part of the institutional setup in BAFA. There was particularly high demand in 2015 for MSOffice2010 training courses for Word, Excel and PowerPoint. Another priority area for further training was the organisation of seminars for newly hired employees on public administration topics such as “Basic principles of German funding legislation“ and the provision of training courses on public procurement law and the legal framework surrounding administrative governance. In 2015, two presentations were held for the first time for employees with parental duties on the topics of “Protecting minors in the media” and “Addiction and Education”. These events took place in connection with the BAFA activities undertaken as part of the berufundfamilie (“Work and Family”) audit programme. Another new development was the introduction of a management development programme (FEP) for young Heads of Division. The aim of the programme is to help participants carry out their management duties in the long term, promote their personal development and facilitate the establishment of a network based on the existing policy advisors group. The management development programme has a modular format. Modules included, for example, a compact seminar, several small-group coaching sessions and an excursion. Information events organised by the Central Services divisions are also aimed at enhancing cooperation with public administration while giving the managers a greater appreciation of the interfacing role they play between their fellow employees and public administration. For the first time, BAFA offered four female, intermediate grade employees without a qualification in public administration the opportunity to complete an in-service training course in order to become clerks in public administration. All four employees completed the course with flying colours. Meanwhile, vocational training courses were successfully completed as follows: certified senior clerk in public administration (two employees); certified business management specialist in public administration (three employees) and IT technician in public administration (one employee). The main purpose of the policy advisors group is to facilitate the integration of new policy advisors and to promote direct exchange between senior and junior management. Joint activities are also held on a regular basis. These allow people working in different activity areas to exchange their experiences and gain an insight into other fields. The policy advisors group also organises a group business trip every year. The aim of the trip is to strengthen and maintain work relationships and also cultivate new contacts, if possible. It also helps to promote a positive perception of BAFA in the institutions visited. Stockholm was the destination of the annual business trip in 2015. The agenda included presentations and discussions with the Swedish Energy and Environment Ministry, the Stockholm International Peace Research Institute (SIPRI) and the German-Swedish Chamber of Commerce and Industry. All policy advisors in BAFA are free to take part in the activities of the policy advisors group. I N S I D E B A FA 85 Health management Girls’ Day BAFA’s focus on health in 2015 was themed “Movement and mobility”. At “Girls’ Day” last year in BAFA, 20 female students aged from 10 to 15 years old were given an opportunity to gain an insider view of a Higher Federal Authority. The slogan for the day was „Working for a state agency - more fun than you‘d think!“ Members of BAFA staff took part in the climate alliance “City Cycling” campaign (STADTRADELN), and “Bike to work” and “ADFC bike-night 2015” activities. Over two specially designated “Health Days”, staff could have experts check their cervical spine mobility and overall physical motion. Back checks and running consultations were on offer. There were also various workshops on the topics of “Fascia training”, “Smovey fitness” and “Brainfit”. Six yoga courses were held again in 2015 along with several drop-in sessions, which were very popular. A presentation on vegetarian nutrition concluded the range of health-related events. Thanks to very high levels of participation from staff and excellent support from our partners, the focus on health in 2015 was a great success. This was the twelfth year of BAFA’s participation in Girls´ Day: it considers this event as an ideal opportunity for girls to get a taste for life in a technical and scientific career and also learn about the key activity areas in BAFA. Subjects such as the threat posed by weapons of mass destruction or trading of sensitive components or materials were vividly presented. Topical presentations addressed questions like “What is export control?” or “What do law graduates do at BAFA?”. The energy economy and climate protection section gave a presentation under the heading of “No need to freeze!” Since a modern state agency cannot function nowadays without up-to-date information technology, half of the practical session was devoted to the topics “How do I get into IT?/ The BAFA data processing centre”. The participants were able to use a mini-program to try out the basic design of a website home page for themselves. The other half of the session consisted of a technology competition, with prizes for the winners. In this case, the girls had to make independent decisions on which goods were authorised for export to “sensitive” and “non-sensitive” countries, based on concrete examples. Fibre experiments carried out on the day were another highlight. At the end of an action-packed and varied day, the winners from the technology competition were awarded their prizes. All of the girls also received a souvenir photo of the day taken in the President’s office. 86 I N S I D E B A FA Evaluating the success of funding programmes The evaluation or success monitoring of economic policy funding measures is legally enshrined in the Federal Budget Code in Germany and has become increasingly important in recent years. Evaluations are an important means of measuring quality standards and success. They provide information about how support programmes can be adapted and developed and are also needed to meet the compliance requirements of both policymakers and the general public. Since 2008, the Federal Office of Economics and Export Control has had its own, programme-independent evaluation unit, which conducts its own evaluations and provides advice and support on third-party evaluations for BAFA and the Federal Ministry for Economic Affairs and Energy. This evaluation unit also supports BAFA and ministry expert panels at other levels in terms of content and strategy. The evaluation team has the relevant, solid methodological skills and practical experience in empirical social research. BAFA‘s membership of the evaluation group Gesellschaft für Evaluation, participation in specialist conferences and further training ensure that its employees are well versed in expert methodology. This in turn ensures the quality of its evaluation projects and support services. In 2015, BAFA completed an evaluation of the BQ portal, an information portal funded by the Federal Ministry for Economic Affairs and Energy about foreign professional qualifications. The evaluation included recommendations for the continued development of the portal. Over the year, work also commenced on another project in the area of institutional support with the evaluation of support for the Institute for SME Research. In addition, an evaluation of the “Healthcare” export initiative got underway. Both projects are due for completion in 2016. Alongside these efforts, the evaluation team monitored the support programme for helping young innovative companies participate in leading international trade fairs in Germany. This programme was carried out by external service providers. Other monitoring tasks accomplished in 2015 included the external evaluations of the SME Market Development Programme and the National Top Runner Initiative. BAFA also provides support to the Federal Ministry of Economic Affairs and Energy in other matters relating to the Federal Budget Code or evaluation. The evaluation team carried out two quality assurance programmes in 2015 of administration within BAFA. Customer surveys have regularly been conducted in relation to film funding for a long time now. A similar project on the issue of adjustment benefit for coal miners was completed in 2015. The evaluation team is frequently a point of contact for colleagues who deal with evaluations or methodological issues. I N S I D E B A FA 87 Press and public relations Photo: Staff from the press and public relations section in BAFA (l. to r.): Patrick Ortner, Janet Baenke, Christiane Fuckerer (Head of Section), Mirjam Kochendörfer, Eric Krause, Michael Rostek Publicity and much more Website The work of a press and public relations department involves much more than drafting persuasive articles or circulating newsletters. At BAFA, press and public relations covers a range of diverse activities, all aimed at communicating with our specific target groups. These include interviews, press releases, press phone service, publications, new media and the generation of many creative ideas. The BAFA website remains our most important communication medium. It is the first point of contact for citizens, businesses and journalists looking for information on the wide spectrum of activities handled by BAFA or on individual programmes or tasks. Our website is due to be relaunched shortly, boasting a fresh new design and many new functions - keep an eye out for it! Social media We increased our activity on various social networks over the past year. Since March 2015, the Twitter account @ BAFA_Wirtschaft has been used to announce news about BAFA’s promotion of economic development and SMEs. This account is active in addition to our Twitter presence in the areas of Energy and Renewable Energy (@BAFA_Energie/@ BAFA_EE). BAFA now also has a profile on “Xing”. Potential job applicants can find out about BAFA as an employer here and get information about current events. 88 O R G A N I S AT I O N C H A RT ORGANISATION CHART Last revised, 1 February 2016 Quality Management Officer, Risk Management, Internal Control Internal Auditing President Press and Public Relations Vice President SME Market Development Coordination Office Directorate-General 1 Directorate-General 2 Directorate-General 3 Central Services Export – Procedures, Authorisations, International Regimes – Procedures, Outreach Projects Export – Technology, Technical Assessment, International Regimes – Technology Division 111 Directorate 12 Directorate 21 Directorate 22 Directorate 31 Directorate 32 Human Resources* Information Technology, HR Development, Education and Training, Evaluations, Centre of Excellence for Allocations Export Procedures, Dual-Use Goods, Arms and Embargoes Export Monitoring, Information Analysis, War Weapons Control, Verification, Outreach Projects Missile and Space Systems, Weapons and Weapon Systems, Mechanical Engineering, Process Engineering, Electronics and Optics Policy Issues, Chemistry, Biology, Nuclear Technology, Chemical Weapons Convention (CWC) Division 112 Division 121 Division 211 Division 221 Division 311 Division 321 General Legal Issues, Security of Classified Material Information Technology Hardware, Networks Policy and Procedural Issues Information Analysis, Reporting Electronics: Optics, Computers Technical Policy Issues – Procedures, Lists of Goods and Regimes – Division 113 Division 122 Division 212 Division 222 Division 312 Division 322 Internal Services Information Technology Software Authorisations for Dual-Use Goods War Weapons Control Weapon Systems, Air and Land Vehicles, Ships, Missile and Space Systems (MTCR) Chemicals, Biological Agents, Materials (Australia Group) Division 114 Division 123 Division 213 Division 223 Division 313 Division 323 Budget*, Procurement, Cost-Results Accounting HR Development, Education and Training Authorisations for Conventional Armaments Internal Compliance Programmes (ICP), Collective Export Licence Procedure Machine Tools, Measurement Machines Nuclear Technology (NSG), Radioactive Materials Division 115 Division 124 Division 214 Division 224 Division 314 Division 324 Organisation*, Quality Management Evaluations, Centre of Excellence for Allocations, Data Protection Embargoes* Cooperation with Investigating and Monitoring Authorities, Licensing of Private Security Services for the Protection of Ships Electronics: Communications Technology, Military Electronics CWC Inspections, CWC Declarations Division 215 Division 225 Division 315 Other Licensing Requirements, Unlisted Goods, Special Export Procedures Outreach Projects; Policy Process Engineering, Industrial Equipment *Including responsibilities for Germany Trade and Invest Division 216 Division 226 Compliance Control, Licence Registration Outreach Projects; Management O R G A N I S AT I O N C H A RT Staff Council Corruption Prevention Security Officer/ Sabotage Protection Official Spokesperson for Severely Disabled Persons Data Protection Officer IT Security Officer 89 Equal Opportunities Officer Directorate-General 4 Directorate-General 5 Directorate-General 6 Promotion of Economic Development and SMEs Energy Efficiency, Renewable Energies, Special Compensation Audit Oversight Body Directorate 41 Directorate 42 Directorate 51 Directorate 52 Directorate 61 Directorate 62 Promotion of Economic Development, INVEST Promotion of Economic Development, Emergency Response Energy Area 1 Energy Efficiency, NAPE, MAP Energy Sector 2 Special Compensation Rule (BesAR), Refrigeration Engineering Inspections and Quality Control Professional Supervision and Policy Issues Division 411 Division 421 Division 511 Division 521 Division 611 Division 621 INVEST risk capital, Manufacturer‘s discount, Digital Dividend Crafts Promotion, Institutional Promotion Federal Energy Efficiency Centre, Policy Issues, NAPE Coordination and Communication Strategy BesAR – Policy Issues Legal Affairs and Preventative Professional Supervision HR Policy and International Issues Division 412 Division 422 Division 512 Division 522 Division 612 Division 622 Promotion of Inter-company Vocational Training Centres, Film Coal Mining Assistance/APG Local Consultations, Energy Management System BesAR – Development Area 1 Inspections 1 (Banks and Insurance Bodies) Professional Supervision 1 (Banks and Insurance Bodies) Division 413 Division 423 Division 513 Division 523 Division 613 Division 623 Assistance to Advisory Services Petroleum and Gas, Generic Technologies Heating System Promotion MAP Policy Issues BesAR – Development Area 2 Inspections 2 (Industry and Trade) Professional Supervision 2 (Industry and Trade) Division 414 Division 424 Division 514 Division 524 Division 614 Division 624 Foreign Trade, Trade Fairs Satellite Data Protection, Importation, Innovative Shipbuilding Promotion MAP – Development Area 1, Heat Pumps, Funding of PRS BesAR – Development Area 3 Technical Supervision, Quality Control Technical Supervision, Professional Supervision, Market Monitoring Division 425 Division 515 Division 525 CHP, Mini CHAP MAP – Development Area 2 BesAR – Refrigeration Engineering Division 516 Division 526 MAP – Development Area 3 Energy Consulting SME, Energy Audit Integration scheduled as of mid-2016 www.bafa.de Report 2015/2016