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German Anti-Money Laundering (AML) and Counter Terrorist Financing (CTF) Regulations

Internal Safeguards

Obliged entities must implement internal safeguards to prevent and detect AML/CTF offenses. These safeguards should include data processing systems that identify suspicious transactions.

Requirements for Internal Safeguards

• Obliged entities must implement internal safeguards to prevent and detect AML/CTF offenses.
• Data processing systems that identify suspicious transactions are a necessary part of these safeguards.
• The supervisory authority may specify criteria for exempting certain obliged entities from using these data processing systems.

Reporting Suspicious Transactions

Obliged entities must have arrangements in place to allow employees and others to report suspected AML/CTF offenses confidentially. Entities must also be able to provide information about business relationships with specific individuals or entities upon request by the German Financial Intelligence Unit (Zentralstelle für Finanztransaktionsuntersuchungen) or other authorities.

Requirements for Reporting Suspicious Transactions

• Obliged entities must have arrangements in place to allow employees and others to report suspected AML/CTF offenses confidentially.
• Entities must be able to provide information about business relationships with specific individuals or entities upon request by the German Financial Intelligence Unit (Zentralstelle für Finanztransaktionsuntersuchungen) or other authorities.

Outsourcing Internal Safeguards

Obliged entities may outsource internal safeguards to third parties, but must notify the supervisory authority in advance. The supervisory authority may prohibit outsourcing if it deems the third party incapable of implementing proper safeguards or if it would compromise the entity’s management capabilities or supervision.

Requirements for Outsourcing Internal Safeguards

• Obliged entities may outsource internal safeguards to third parties.
• Entities must notify the supervisory authority in advance before outsourcing internal safeguards.
• The supervisory authority may prohibit outsourcing if it deems the third party incapable of implementing proper safeguards or if it would compromise the entity’s management capabilities or supervision.

Orders from Supervisory Authority

In individual cases, the supervisory authority may issue orders to obliged entities to implement necessary internal safeguards. The supervisory authority may also order obliged entities to apply specific measures on account of their business activities or size.

Requirements for Orders from Supervisory Authority

• In individual cases, the supervisory authority may issue orders to obliged entities to implement necessary internal safeguards.
• The supervisory authority may order obliged entities to apply specific measures on account of their business activities or size.

Money Laundering Reporting Officer

Certain obliged entities must appoint a money laundering reporting officer at senior management level and a deputy. This officer is responsible for ensuring compliance with AML/CTF regulations and serves as the point of contact for law enforcement agencies, etc.

Requirements for Money Laundering Reporting Officer

• Certain obliged entities must appoint a money laundering reporting officer at senior management level and a deputy.
• The money laundering reporting officer is responsible for ensuring compliance with AML/CTF regulations and serves as the point of contact for law enforcement agencies, etc.
• The supervisory authority may exempt some obliged entities from appointing a money laundering reporting officer if certain conditions are met.