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In a famous case of espionage, the Nazi intelligence service SD took over the luxurious Berlin brothel Salon Kitty and equipped it with listening devices and specially trained prostitutes. From 1939 to 1942 the brothel was used to spy on important visitors.
German Democratic Republic (GDR 1945–1990)
After World War II, the country was divided into East Germany and West Germany. In East Germany, as in all countries of the communist Eastern Bloc, prostitution was illegal and according to the official position it didn’t exist. However, there were high-class prostitutes working in the hotels of East Berlin and the other major cities, mainly targeting Western visitors; the Stasi employed some of these for spying purposes. Street walkers and female taxi drivers [ citation needed ] were available for the pleasure of visiting Westerners, too.
Federal Republic of Germany (BRD 1945–2001)
In West Germany, the registration and testing requirements remained in place but were handled quite differently in the various regions of the country. In Bavaria, in addition to scheduled STD check-ups, regular HIV tests were required since 1987, but this was an exception. Many prostitutes did not submit to these tests, avoiding the registration. A study in 1992 found that only 2.5% of the tested prostitutes had a disease, a rate much lower than the one among comparable non-prostitutes. 
In 1967, Europe’s largest brothel at the time, the six-floor Eros Center , was opened on the Reeperbahn in Hamburg. An even larger one, the twelve-floor building now called Pascha in Cologne was opened in 1972. The AIDS scare of the late 1980s was bad for business, and the Eros Center as well as several other brothels in Hamburg had to close.   The Pascha continued to flourish however, and now has evolved into a chain with additional brothels in Munich and Salzburg.
Anything done in the “promotion of prostitution” ( Forderung der Prostitution ) remained a crime until 2001, even after the extensive criminal law reforms of 1973. This put the operators of brothels in constant legal danger. Most brothels were therefore run as a bar with an attached but legally separate room rental. However, many municipalities built, ran and profited from high rise or townhouse-style high-rent Dirnenwohnheime (lit.: “whores’ dormitories”), to keep street prostitution and pimping under control. Here prostitutes sell sex in a room that they rent by the day. These establishments, called “Laufhauser” in Johns’ jargon are now mostly privatized and operate as Eros Centers . Even before the 2001 reform, many upmarket prostitutes operated in their own apartments, alone or with other women. Luxurious country houses, called “FKK-Sauna-Clubs” are the top end of the scale. There, women and men pay the same entrance fees that range from about 50 to 100 euro and usually include meals and drinks and the prostitutes negotiate their deals with the clients individually, thus avoiding the appearance of pimping (“Zuhalterei”). Illegal variations on that business model, like “Flaterate-Clubs” and “Pauschalclubs” also exist and advertise openly in daily newspapers and the Internet. These establishments charge an “all-you-can handle” fee of about 75 to 90 euro.
Before the 2002 prostitution law, the highest courts of Germany repeatedly ruled that prostitution offends good moral order ( versto?t gegen die guten Sitten ), with several legal consequences. Any contract that is considered immoral is null and void, so a prostitute could not sue for payment. Prostitutes working out of their apartments could lose their leases. Finally, bars and inns could be denied a licences if prostitution took place on their premises.
In 1999, Felicitas Weigmann  lost the licence for her Berlin cafe Psst! , because the cafe was being used to initiate contacts between customers and prostitutes and had an attached room-rental also owned by Weigmann. She sued the city, arguing that society’s position had changed and prostitution no longer qualified as offending the moral order. The judge conducted an extensive investigation and solicited a large number of opinions. In December 2000 the court agreed with Weigmann’s claim. This ruling is considered as precedent and important factor in the realization of the Prostitution Law of 1 January 2002. Only after an appeal process though, filed by the Berlin town district, was Weigmann to regain her cafe license in October 2002.
The compulsory registration and testing of prostitutes was abandoned in 2001. Since then, anonymous, free and voluntary health testing has been made available to everyone, including illegal immigrants. Many brothel operators require these tests.
Legislative reform (2002)
In 2002 a one-page law sponsored by the Green Party was passed by the ruling coalition of Social Democrats and Greens in the Bundestag. The law removed the general prohibition on furthering prostitution and allowed prostitutes to obtain regular work contracts. The law’s rationale stated that prostitution should not be considered as immoral anymore.
The law has been criticized as having not effectively changed the situation of the prostitutes, often because the prostitutes themselves don’t want to change their working conditions and contracts.  The German government issued a report on the law’s impact in January 2007, concluding that few prostitutes had taken advantage of regular work contracts and that work conditions had improved only slightly, if at all.