German Anti-Money Laundering Laws: New Regulations for Obliged Entities

Germany has strengthened its anti-money laundering (AML) and counter-terrorism financing (CFT) measures by introducing new regulations for obliged entities. These regulations aim to ensure effective implementation of AML/CFT laws and prevent money laundering and terrorist financing activities.

Data Processing Systems

Obliged entities under Section 2 (1) no. 15 are required to operate data processing systems that enable them to identify suspicious or unusual transactions in gambling operations and via a gambling account. These systems must be updated regularly to ensure effective detection of potential money laundering and terrorist financing activities.

• The supervisory authority may exempt certain obliged entities from this obligation if specific criteria are met.
• Obliged entities must notify the supervisory authority in advance of any changes to their data processing systems.

Reporting Contraventions

Obliged entities must make arrangements to allow employees and those in a comparable position to report contraventions of AML/CFT laws to appropriate bodies, while ensuring their identity remains confidential. This ensures that potential money laundering and terrorist financing activities can be reported and investigated effectively.

• Obliged entities must also ensure that all reports are transmitted safely and confidentially.
• The supervisory authority may issue orders to obliged entities to implement necessary internal safeguards in individual cases.

Information Provision

Obliged entities must be prepared to provide information to the German Financial Intelligence Unit (Zentralstelle für Finanztransaktionsuntersuchungen) or other competent authorities on whether they maintained a business relationship with certain persons during a specified period. This information must be transmitted safely and confidentially.

Engaging Third Parties

Obliged entities may engage third parties to implement internal safeguards, but must notify the supervisory authority in advance. The supervisory authority may prohibit this transfer if certain criteria are not met.

• Obliged entities must ensure that any third party engaged has the necessary expertise and resources to implement effective AML/CFT measures.
• The supervisory authority may issue orders to obliged entities to implement necessary internal safeguards in individual cases.

Money Laundering Reporting Officer

Obliged entities under Section 2 (1) nos. 1 to 3, 6, 7, 9 and 15 are required to appoint a money laundering reporting officer at senior management level and a deputy. The supervisory authority may exempt certain obliged entities from this obligation if specific criteria are met.

• The money laundering reporting officer must carry out their function in Germany, have unrestricted access to all relevant information, and report directly to the top management level.
• Obliged entities must notify the supervisory authority of the appointment or dismissal of the money laundering reporting officer or their deputy.