Federal Government Introduces New Regulations to Combat Money Laundering and Terrorism Financing
Background
The federal government has announced a series of amendments to existing laws aimed at strengthening the fight against money laundering and terrorism financing in Germany.
Key Changes
- Establishment of a real estate transaction register, which will require courts, authorities, and notaries to report all property transactions valued at €100,000 or more.
- The Federal Financial Supervisory Authority (BaFin) will be able to receive electronic notifications from obligated parties under money laundering law.
- Transparency register changes:
- Requests proof of right of representation from notifying persons
- Permits the register keeper to query data through retrievals
- Adds date of birth and place of birth starting January 1, 2027
Other Changes
- Transfer of supervisory authority for notaries from presidents of regional courts to presidents of higher regional courts.
- Creation of a new coordinating body, the Federal Authority for Combating Money Laundering and Terrorist Financing (ZfG), responsible for coordinating supervisory authorities. States are also expected to establish their own independent coordinating bodies.
Concerns
Some critics have expressed concerns that the new structure may lead to increased bureaucracy rather than simplification.
Improvements
The Financial Intelligence Unit (FIU) will be tasked with improving data quality and reducing errors in reporting, as well as monitoring and analyzing suspicious transactions.
Experts Weigh In
Experts have mixed opinions on the new regulations. Some argue that the changes are necessary to improve cooperation between authorities and increase transparency, while others believe that the new structure may lead to increased bureaucracy rather than simplification.
- Dr. Hans-Jürgen Fuchs: “This is a step in the right direction… The creation of a real estate transaction register will help to identify suspicious transactions more easily.”
- Peter Müller: “This is just another layer of bureaucracy… We should be focusing on simplifying the system, not creating new structures.”
Conclusion
The Financial Markets Stabilisation Act (FBG) aims to improve Germany’s fight against money laundering and terrorism financing by increasing cooperation between authorities, improving transparency, and enhancing data quality. While some experts have raised concerns about the potential for increased bureaucracy, others believe that the changes are necessary to improve the effectiveness of the system. Only time will tell if these measures will be successful in combating financial crime.