Title: German Companies Brace for Stricter Money Laundering Regulations

Germany’s Crackdown on Money Laundering

Germany, known for its robust financial system, is strengthening its stance against money laundering with new regulations. Here’s a closer look at the measures.

Extensive New Regulations

Germany, under the German Money Laundering Act (Geldwäschegesetz, GwG), is implementing stringent identity verification, monitoring, and reporting obligations to prevent money laundering. The European Union (EU) also requires credit institutions and companies to establish effective anti-money laundering (AML) management.

Consequences of non-Compliance

Failing to comply with these regulations could lead to severe consequences, including hefty fines and potential criminal charges. For intentional violations, companies may face fines of up to €150,000. Negligent infringements can result in fines of up to €100,000. Additionally, there is the possibility of a corporate fine under the Administrative Offenses Act and potential criminal proceedings against individuals.

Assessing AML Risks

To effectively manage AML risks, companies must conduct a risk analysis, document it, and update it regularly. This risk analysis forms the basis for implementing appropriate security measures throughout the company or corporate group. Although not directly bound by the German Money Laundering Act, firms should still enforce internal security measures to prevent any possible AML breaches relevant under criminal law.

Confirming Compliance

An anti-money laundering audit can confirm a company’s adherence to these regulations, demonstrating that they have a functional AML program in place.

The Persistence of Money Laundering and Tax Evasion

Despite increased regulations, recent investigations like the Panama Papers and FinCEN files show that money laundering and tax evasion still exist. Authorities are responding to even the smallest indicators of suspicious transactions, making it crucial for companies to prioritize AML compliance.

Stay Informed and Compliant

To stay updated on current legal developments and court decisions related to AML, subscribe to our quarterly German Business Law Newsletter. For comprehensive AML compliance services, contact WINHELLER. Our offerings include:

• Internal risk analysis
• Creation of company guidelines
• Regular employee training
• Complaint management
• Anti-money laundering audit procedures

We also assume the role and tasks of an external money laundering officer and offer criminal defense for administrative offenses and criminal proceedings related to AML obligations.