Germany Takes Significant Steps to Combat Financial Crimes
The German Federal Cabinet has adopted a package of laws aimed at fundamentally realigning structures and powers for fighting financial crime. This major effort is expected to bring about a significant shift in how Germany tackles money laundering and other financial malfeasance.
Data-Driven Approaches and Digital Technology
Under the new framework, financial investigations will be conducted using data-driven approaches and cutting-edge digital technology to track down criminals and sanctioned individuals. The “follow the money” approach will be used to target financial crimes, combining analysis, investigation, and oversight to combat money laundering.
Establishment of a Money Laundering Investigation Hub
A key component of the package is the establishment of a money laundering investigation hub within the Federal Office for Fighting Financial Crime (BBF). This move aims to improve Germany’s ability to prosecute significant cases of international money laundering linked to the country. The Central Office for Financial Transaction Investigations (FIU) and the Central Office for Sanctions Enforcement (ZfS) will also be transferred to the BBF in mid-2025.
Central Office for Money Laundering Oversight
The new laws also introduce a central office for money laundering oversight, which will develop uniform guidelines for supervisory authorities across all sectors. This will ensure a coordinated approach to combating financial crime.
Register of Real Estate Transactions
Another significant innovation is the creation of a register of real estate transactions, providing authorities with digital access to up-to-date property data when investigating money laundering and enforcing sanctions.
Other Measures to Strengthen Germany’s Fight Against Financial Crime
The package also includes several other measures aimed at strengthening Germany’s fight against financial crime and money laundering. These include:
- A procedure for administrative asset investigations
- The possibility of seizing property if it cannot be identified or traced back to its owner
These reforms aim to bring about a major overhaul of Germany’s financial crime-fighting capabilities, positioning the country as a leader in combating financial malfeasance.
Next Steps
The proposed regulations are currently being reviewed by government ministries and are expected to be presented in the near future. The reforms aim to implement key priorities outlined in the coalition agreement and recommendations from the Financial Action Task Force’s assessment of Germany.