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Anti-Money Laundering (AML) Requirements in Germany

As a business operating under the supervision of BaFin, it’s essential to understand the Anti-Money Laundering (AML) requirements in Germany. This article summarizes the key points you need to know.

Suspicious Transaction Reporting (STR)

Entities supervised by BaFin must report suspicious activities or transactions to the Financial Intelligence Unit (FIU). Here are the details:

  • Submit STR electronically: The reporting entity can submit the STR electronically through the “goAML” system.
  • No investigation required: The reporting entity does not need to investigate, but should provide an explanation for why they think the activity is suspicious.

Other Reporting Requirements

In addition to STR, BaFin has other reporting requirements for entities under its supervision. These include:

  • Annual reports and external audit reports: Entities must submit these reports to BaFin.
  • Balance sheets and major changes report: Entities must also submit these reports to BaFin.
  • On-exchange and off-exchange dealings in financial instruments: Some entities, such as investment service companies, must report all on-exchange and off-exchange dealings in financial instruments.

Recording and Retention Requirements

Entities supervised by BaFin must record and retain certain data for a specified period. These include:

  • STRs and other reports: Entities must store data related to STRs and other reports.
  • Video identification process: The entire video identification process must be recorded and retained for at least 5 years, but no longer than 10 years.

Penalties for Non-Compliance

Failure to comply with BaFin’s AML requirements can result in severe penalties. These include:

  • Fines: Administrative fines can range from €1 million to €5 million in serious cases.
  • License termination: Entities may face license termination as a result of non-compliance.
  • Seizure of assets: Assets may be seized in cases where entities fail to comply with AML requirements.
  • Criminal liability: Individuals or entities may face criminal liability for non-compliance.

Helpful Resources

For more information on BaFin’s AML requirements, visit the official website at www.bafin.de. Additionally, you can refer to the following resources:

  • Interpretation and Application Guidance: This guidance provides further details on how to implement BaFin’s AML requirements.
  • FATF Recommendations on AML/CFT: The Financial Action Task Force (FATF) recommends best practices for anti-money laundering and combating the financing of terrorism.