BERLIN (Reuters) - The German Economics Ministry want to create a nationwide database aimed at making it easier to block companies found guilty of fraud and other violations from receiving federal, state and local government contracts.

A legislative draft viewed by Reuters calls for companies found guilty of major violations to be blocked from government contracts for five years, with less serious charges to result in a three-year ban.

“The goal of the legislation is to ensure that government contracts are only awarded to companies that have not incurred major legal violations and that have competed fairly,” according to the draft.

Current law allows companies found guilty of corruption and other charges to be blocked from receiving government contracts, but it is often difficult for states and local governments to know if a company has run into legal trouble elsewhere.

Berlin, Hamburg and several other German states already have such databases, but it is difficult to share information across state lines and the rules and criteria also vary widely.

The new nationwide database would set a threshold of 30,000 euros for contracts, and 2,500 euros for fines. Money laundering, fraud, creation of a terrorist cell, kidnapping and tax evasion would be automatic grounds for exclusion from government contracts, according to the draft legislation.

Violations of minimum wage laws and other labor regulations could also trigger a contract ban under certain circumstances, the draft said. However, it said companies would have the chance to be removed from the so-called “black list” by implementing internal controls and preventative measures.

The law is currently being vetted by the coalition government, and would still need to be passed by parliament.