Germany Unveils Sweeping Financial Crime Prevention Strategies to Combat Money Laundering and Sanctions Evasion

Germany’s Federal Cabinet has adopted a package of laws aimed at improving methods and tools employed by authorities to target criminals and sanctioned individuals, fundamentally overhauling its structures and powers for combating financial crime.

“Follow the Money” Approach

The new strategy includes a “follow the money” approach, utilizing data-driven investigations and digital technology to track financial transactions. This will enable authorities to more effectively prosecute major cases of international money laundering linked to Germany.

Enhanced Investigation and Prosecution Capabilities

A new Money Laundering Investigation Hub will be established within the Federal Office for Fighting Financial Crime (BBF), allowing authorities to: * Conduct more effective investigations * Prosecute major cases of international money laundering * Enhance cooperation with international partners

Reorganization and Consolidation of Authorities

The Central Office for Financial Transaction Investigations (FIU) and the Central Office for Sanctions Enforcement (ZfS) will be transferred to the new BBF in mid-2025. Additionally, a Central Office for Money Laundering Oversight will be created to develop uniform guidelines for supervisory authorities across the non-financial sector, ensuring a coordinated approach.

New Regulations and Initiatives

The package of laws also includes: * The creation of a Central Register of Real Estate Transactions, providing digital access to up-to-date real estate data for law enforcement agencies fighting money laundering and enforcing sanctions * Procedures for administrative asset investigations * Measures to identify “economic beneficiaries” of suspect assets * Plans to allow authorities to order the deprivation of property in cases where it is impossible to identify the owner or beneficiary (currently under investigation)

Implementation Timeline

The measures are designed to deliver on priorities outlined in the coalition agreement and implement recommendations from the Financial Action Task Force’s assessment of Germany. A proposed set of regulations on administrative asset investigations will be presented in the near future, subject to constitutional considerations.

Germany’s new financial crime prevention strategies aim to enhance its ability to effectively investigate and prosecute significant cases of international money laundering linked to the country, demonstrating a commitment to combating financial crime and upholding international standards.