Financial Crime World

German Companies Must Implement Anti-Money Laundering Measures

Combating Money Laundering and Terrorist Financing

In an effort to prevent suspicious transactions and maintain transparency in business dealings, German companies must implement strict anti-money laundering (AML) measures. The new regulations aim to combat money laundering and terrorist financing by requiring companies to operate data processing systems that can identify unusual transactions.

Key Requirements for Companies

  • Operate data processing systems that enable identification of suspicious or unusual transactions related to gambling operations and accounts
  • Update these systems regularly
  • Make arrangements for employees and persons in comparable positions to report any contraventions of AML and counter-terrorist financing laws to appropriate bodies while maintaining confidentiality

Additional Requirements for Obliged Entities

  • Refuse to provide information if the enquiry refers to information received through a client relationship subject to professional secrecy (for entities under section 2 (1) nos. 10 and 12)
  • Engage third parties to implement internal safeguards, notify the supervisory authority in advance, and demonstrate that the criteria for prohibiting the transfer are not fulfilled
  • Maintain ultimate responsibility for implementing internal safeguards

Supervisory Authority Responsibilities

  • Issue orders to companies to implement necessary internal safeguards
  • Exempt companies from certain obligations if they can demonstrate a low risk of money laundering or terrorist financing

Mandatory Appointments

  • Companies under section 2 (1) nos. 1 to 3, 6, 7, 9, and 15 must appoint:
    • A money laundering reporting officer at senior management level
    • A deputy money laundering reporting officer

Role of the Money Laundering Reporting Officer

  • Responsible for compliance with AML and counter-terrorist financing laws
  • Reports directly to top management level

Compliance Expectations

The regulations aim to enhance transparency and prevent the misuse of financial systems in Germany. Companies are expected to comply with these measures to avoid penalties and reputational damage.