Germany Takes Aim at Financial Crime with New Strategy and Agency
A Decisive Shift in Approach to Tackling Financial Crime
Germany has announced a significant change in its approach to combating financial crime, with the establishment of a new Federal Financial Crime Agency (FFCA) and a “follow the money” strategy. The government aims to take decisive action against financial crime, particularly money laundering, by bundling key competencies under one roof.
The Role of the Federal Financial Crime Agency (FFCA)
The FFCA will be established in 2024 and operational in 2025, bringing together analysis, criminal investigations, and supervision in a holistic anti-money laundering approach. The agency’s primary focus will be on tracing illicit financial flows to uncover underlying crimes, rather than starting with predicate offenses.
Key Features of the FFCA:
- Holistic Approach: Combining analysis, criminal investigations, and supervision to combat money laundering
- State-of-the-Art Technology: Equipped with data analytics and artificial intelligence to support investigative work
- Strong Analytical Capabilities: Crucial in fighting complex financial crimes, particularly in areas such as cryptocurrencies
Improving Money Laundering Supervision in the Non-Financial Sector
In addition to the FFCA, the government is introducing reforms aimed at improving money laundering supervision in the non-financial sector. The Central Office for AML Supervision will develop uniform guidelines for supervision and operate a statistics and reporting system to enable decentralized authorities to pursue a risk-based strategy.
Key Reforms:
- Uniform Guidelines: Developing consistent standards for supervision across the non-financial sector
- Statistics and Reporting System: Enabling decentralized authorities to pursue a risk-based approach
- Risk-Based Strategy: Focusing on high-risk areas and activities
Enhancing Transparency on Beneficial Owners
The government plans to improve transparency on beneficial owners by providing additional access authorizations to the transparency register and introducing a new real estate transaction register. This will make it easier to discover false entries and initiate adjustments.
Key Measures:
- Additional Access Authorizations: Allowing for more transparent and accurate information on beneficial owners
- New Real Estate Transaction Register: Enhancing transparency in property transactions
Conclusion
Germany’s new approach to financial crime aims to strengthen its position as a leader in the fight against money laundering and other financial crimes. The establishment of the FFCA and the implementation of the “follow the money” approach are key components of this strategy.