Germany’s Compliance with FATF Recommendations Under Scrutiny

A recent report by the Financial Action Task Force (FATF) has shed light on Germany’s progress in implementing the technical requirements of its recommendations. The country received a mixed assessment, with varying levels of compliance across different areas.

Assessing Risk and Applying Risk-Based Approach

Germany was found to be largely compliant (LC) in this area, demonstrating a robust risk-assessment framework and effective implementation of a risk-based approach.

National Cooperation and Coordination

The country was also deemed largely compliant (LC), with good cooperation and coordination between various agencies and institutions involved in combating money laundering and terrorist financing.

Money Laundering Offence

Germany was found to be compliant (C) in this area, having a clear and effective framework for the offence of money laundering.

Confiscation and Provisional Measures

The country received a compliance rating (C), with a well-established confiscation regime and effective provisional measures in place.

Terrorist Financing Offence

Germany was found to be largely compliant (LC) in this area, having a robust framework for the offence of terrorist financing.

The country received a largely compliant (LC) rating, with effective targeted financial sanctions in place to combat terrorism and terrorist financing.

Germany was found to be largely compliant (LC), having targeted financial sanctions in place to combat proliferation.

Non-Profit Organisations

The country received a largely compliant (LC) rating, with effective measures in place to prevent the misuse of non-profit organisations for money laundering and terrorist financing purposes.

Financial Institution Secrecy Laws

Germany was found to be compliant (C), having laws in place that balance the need for secrecy with the requirement to report suspicious transactions.

Customer Due Diligence

The country received a largely compliant (LC) rating, with effective customer due diligence measures in place.

Record Keeping

Germany was found to be compliant (C), having robust record-keeping requirements and practices in place.

Politically Exposed Persons

The country received a largely compliant (LC) rating, with effective measures in place to prevent the misuse of politically exposed persons for money laundering and terrorist financing purposes.

Correspondent Banking

Germany was found to be partially compliant (PC), with some progress made but still room for improvement in this area.

Money or Value Transfer Services

The country received a largely compliant (LC) rating, with effective measures in place to prevent the misuse of money and value transfer services for money laundering and terrorist financing purposes.

New Technologies

Germany was found to be largely compliant (LC), having taken steps to address emerging risks associated with new technologies.

Wire Transfers

The country received a compliance rating (C), having effective measures in place to prevent the misuse of wire transfers for money laundering and terrorist financing purposes.

Reliance on Third Parties

Germany was found to be largely compliant (LC), with effective measures in place to manage risks associated with relying on third parties.

Internal Controls and Foreign Branches and Subsidiaries

The country received a largely compliant (LC) rating, with effective internal controls and measures in place for foreign branches and subsidiaries.

Higher-Risk Countries

Germany was found to be compliant (C), having effective measures in place to address higher-risk countries.

Cash Couriers

The country received a compliance rating (C), having effective measures in place to prevent the misuse of cash couriers for money laundering and terrorist financing purposes.

Overall, Germany has made significant progress in addressing money laundering and terrorist financing risks. However, there are still areas where improvement is needed to ensure that its financial system remains robust and secure.