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German Anti-Money Laundering Act: Transparency and Compliance Guidelines

The German Anti-Money Laundering Act (GwG) is a comprehensive regulation that aims to prevent money laundering and terrorist financing. This article provides an overview of the transparency requirements for associations and legal arrangements, as well as guidelines on inspection of the Transparency Register, reporting discrepancies, and compliance.

Transparency Register

The Transparency Register must provide access to information about beneficial owners of associations and legal arrangements. The following details are required:

  • Beneficial Owner Information: First name and surname, date of birth, place of residence, nature and extent of the beneficial interest, and nationality.
  • Associations (excluding foundations with legal capacity): Determination follows Section 3 (1) and (2).
  • Legal Arrangements under Section 21 and Foundations with Legal Capacity: Determination follows Section 3 (1) and (3).

Inspection of Transparency Register

Obliged entities can inspect the register in the context of associations as per Section 20(1) sentence 1 and legal arrangements under Section 21. However, they must demonstrate to the registrar entity that the inspection is being carried out to fulfill their due diligence obligations.

Reporting Discrepancies

Obliged entities must report without undue delay any discrepancies they find between beneficial ownership information in the Transparency Register and the information and knowledge available to them. A discrepancy exists if:

  • Missing Entries: There are missing entries in the register.
  • Discrepancies about Individual Details of Beneficial Owners: There are discrepancies about individual details of beneficial owners.
  • Different Beneficial Owners Identified: Different beneficial owners are identified than those listed in the register.

Compliance Guidelines

The BaFin-Interpretation and Application Guidance on the German Money Laundering Act provides detailed guidelines on customer due diligence obligations. Obliged entities must ascertain if a contracting party is acting on behalf of a beneficial owner and identify this owner following Sections 11 (5) and 12 (3) of the GwG.

By understanding and implementing these transparency requirements, inspection guidelines, discrepancy reporting procedures, and compliance regulations, financial institutions and obliged entities can ensure effective anti-money laundering measures and contribute to a safer financial environment.