Financial Crime World

Germany Scores Well in FATF Money Laundering Prevention Report, Recommendations for Improvement Made

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The Financial Action Task Force (FATF) has published its country report on money laundering prevention in Germany, assessing the work of BaFin. The international body’s assessors found that BaFin has made progress but identified recommendations for improvement.

Assessment Highlights

  • BaFin’s understanding of risks is strong, and its supervisory system is effective.
  • The organization takes adequate preventive measures against money laundering and terrorist financing in the financial sector.
  • Assessors praised BaFin’s differentiated risk-based supervisory approach and satisfactory framework for supervising the financial sector.

Strengths

Strong Understanding of Risks

BaFin has a comprehensive understanding of risks, enabling it to take effective measures against money laundering and terrorist financing.

Differentiated Risk-Based Supervisory Approach

The organization uses a risk-based approach to supervise the financial sector, focusing on high-risk areas.

Satisfactory Framework for Supervising the Financial Sector

BaFin’s framework is adequate for supervising the financial sector and preventing money laundering and terrorist financing.

Areas for Improvement

  • More effective monitoring of the private sector: BaFin needs to improve its monitoring of the private sector to prevent money laundering and terrorist financing.
  • Additional supervisory divisions: Creating additional supervisory divisions will help BaFin to better supervise the non-bank financial sector.

Recommendations for Improvement

Increasing Staffing Levels in Anti-Money Laundering Supervision

BaFin plans to increase staffing levels in anti-money laundering supervision to improve its effectiveness.

Creating Additional Supervisory Divisions

The organization will create additional supervisory divisions to oversee the non-financial sector and prevent money laundering and terrorist financing.

Next Steps

  • BaFin has committed to implementing the recommendations for improvement.
  • The organization plans to strengthen its inspection activities in the non-bank financial sector and make greater use of its arsenal of measures and sanctions.
  • A follow-up report is due next year, marking the official completion of Germany’s FATF assessment.

Rating

Germany’s FATF assessment results are moderate, in line with the average for other member states.