This test is SV (Germany) proof of parentage.
When breeders register dogs in Germany (and countries which use the German system) the authorities there don't simply take the breeder's word that the sire is X and the dam is Y. They check for the certainty of that by taking DNA samples from sire, dam and puppies. They are not testing for any particular inherited disease. They are simply checking that the dog really is the progeny of the parents said to be its parents.
The dogs have to have this test before they can get the A stamp for hips/elbows and to be eligible to enter a Korung (German breed survey).