Money Laundering Reform Package Takes Shape in Germany

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The German government has adopted a comprehensive package of laws aimed at fundamentally reshaping the country’s approach to fighting financial crime and money laundering. This reform package is designed to improve structures, powers, and methods, repositioning institutions and strengthening the “follow the money” approach.

Key Components

• Establishment of a dedicated money laundering investigation hub within the Federal Office for Fighting Financial Crime (BBF) to effectively prosecute significant international money laundering cases linked to Germany.
• Relocation of the Central Office for Financial Transaction Investigations (FIU) and the Central Office for Sanctions Enforcement (ZfS) to the BBF in mid-2025.

Central Office for Money Laundering Oversight

• Creation of a new office tasked with developing uniform guidelines for supervisory authorities across the non-financial sector, ensuring a coordinated approach to fighting money laundering and enforcing sanctions.
• Maintenance of a register of real estate transactions, providing authorities with digital access to up-to-date property data when combating money laundering and enforcing sanctions.

Additional Regulations

• Introduction of a procedure for administrative asset investigations aimed at identifying the “economic beneficiaries” of suspect assets or tracing their source.
• Authorities will be empowered to order property deprivation if the owner or beneficiary cannot be identified, an innovation in German law currently under investigation by government ministries.

Next Steps

The proposed regulations are expected to be presented in the near future. The reforms aim to implement recommendations from the Financial Action Task Force’s assessment of Germany and deliver on key priorities outlined in the coalition agreement.