Financial Crime World

Preventing Money Laundering in Germany: Compliance Requirements under AMLA

In Germany, companies are required to take measures to prevent money laundering as per the Money Laundering Act (AMLA). The following sections outline the key requirements and obligations for businesses.

Effective Risk Management Measures

To comply with AMLA, companies must implement the following risk management measures:

  • Risk Analysis: Conduct a thorough, documented, and regularly updated risk analysis of sales partners to identify potential money laundering risks.
  • Individual Security Measures: Develop company-specific or internal security measures based on the risk analysis to mitigate identified risks.
  • Control Mechanism: Establish an adequate control mechanism to ensure compliance with AMLA requirements.
  • Workforce Information: Regularly provide information to employees about money laundering and its prevention.
  • Appointing a Money Laundering Officer: Consider appointing a money laundering officer and deputies to oversee compliance efforts.

Recording and Retention Requirements

Companies must also comply with recording and retention requirements, including:

  • Digital Copying of Identification Documents: Obtain digital copies or records of identification documents for all business partners.
  • Retention Periods: Maintain records for the required period as specified by AMLA.

Due Diligence Obligations

When establishing business relationships, companies must perform due diligence to comply with AMLA requirements. This includes:

  • Clear Identification: Clearly identify the contractual partner or individual acting on their behalf.
  • Review of Agency Relationships: Review agency relationships to ensure they are compliant with AMLA.
  • Information Gathering: Obtain and evaluate information about the purpose and intended type of business relationship.
  • PEP Status Clarification: Determine whether the money comes from a politically exposed person (PEP).
  • Continuous Monitoring: Continuously monitor business relationships and transactions for potential money laundering risks.

Consequences of Non-Compliance

Companies that fail to report suspicious activity or disregard AMLA regulations may face severe consequences, including:

  • High Fines: Up to €150,000 in many cases.
  • Serious Violations: Up to €5 million for serious, repeated, and systematic violations.

The Act to Improve the Criminal Law Fight Against Money Laundering aims to simplify prosecution for authorities.