Germany Takes Aim at Financial Crime with Sweeping Reforms
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The German government has adopted a comprehensive package of laws aimed at fundamentally reshaping its approach to combating financial crime. The reforms aim to reorganize structures and institutions, improve methods and tools used to fight money laundering and other financial crimes, and enhance the country’s ability to track down criminals and sanctioned individuals.
Follow the Money Approach
Financial investigations will adopt a “follow the money” approach, utilizing data-driven digital technology to track down criminals and sanctioned individuals. This approach combines three key pillars of fighting money laundering - analysis, investigation, and oversight - in a more effective manner.
Improved Coordination and Oversight
The Federal Office for Fighting Financial Crime (BBF) will establish a money laundering investigation hub, enabling more effective prosecution of significant international cases linked to Germany. Additionally, the Central Office for Financial Transaction Investigations (FIU) and the Central Office for Sanctions Enforcement (ZfS) will be transferred to the BBF in mid-2025.
Register of Real Estate Transactions
A new register of real estate transactions will provide authorities with digital access to up-to-date data when investigating financial crimes and enforcing sanctions. This will enable authorities to track down property ownership and identify economic beneficiaries of suspect assets.
Administrative Asset Investigations
The package of laws also includes the creation of administrative asset investigations, which will enable authorities to:
- Identify “economic beneficiaries” of suspect assets or trace the source of funds used to acquire such assets.
- Order the deprivation of property if the owner or beneficiary cannot be identified.
This innovation in German law is currently being scrutinized by ministries and is expected to be presented as a proposed set of regulations soon.
Strengthening Germany’s Fight Against Financial Crime
The package of reforms delivers on several priorities outlined in the coalition agreement and implements recommendations from the Financial Action Task Force’s assessment of Germany. The government aims to further strengthen its fight against financial crime, with additional measures expected to be introduced in the coming months.
Next Steps
The German government is committed to continuing its efforts to combat financial crime and improve its anti-money laundering efforts. With these sweeping reforms, Germany is taking a significant step forward in its fight against financial crime and strengthening its position as a leader in the global effort to combat money laundering and terrorist financing.