Germany Takes Bold Steps to Combat Financial Crimes with Internal Controls
==========================================================
The German government has taken a significant step towards combating financial crimes by adopting a package of laws aimed at reshaping the structures and powers for fighting financial crime, repositioning institutions, and improving methods and tools employed.
A New Approach: “Follow the Money”
Under the new plans, financial investigations will adopt a “follow the money” approach, leveraging data and digital technology to track down criminals and sanctioned individuals. This strategy combines three key pillars of fighting money laundering:
- Analysis: Utilizing advanced analytics and machine learning algorithms to identify suspicious transactions and patterns.
- Investigation: Conducting thorough investigations into suspected money laundering cases, including real-time monitoring of financial transactions.
- Oversight: Providing robust oversight mechanisms to ensure that financial institutions are compliant with anti-money laundering regulations.
Strengthening Institutions
A money laundering investigation hub will be established within the Federal Office for Fighting Financial Crime (BBF), designed to facilitate more effective prosecution of significant international money laundering cases linked to Germany. Additionally, the Central Office for Financial Transaction Investigations (FIU) and the Central Office for Sanctions Enforcement (ZfS) will be transferred to the BBF in mid-2025.
Improving Data Access
The new office will also oversee a register of real estate transactions, providing authorities with digital access to up-to-date data when fighting money laundering and enforcing sanctions. This improved data access will enable more effective enforcement and prosecution of financial crimes.
Additional Regulations
The package includes other regulations aimed at improving Germany’s fight against financial crime and money laundering. These measures include:
- Procedure for Administrative Asset Investigations: A new procedure designed to identify “economic beneficiaries” of suspect assets or their source.
- Deprivation of Property: Authorities may be granted the power to order deprivation of property within constitutional limits if it is impossible to identify the owner or beneficiary.
Future Plans
Further measures will be introduced to enhance efforts, including:
- Regulations on Administrative Asset Investigations: Currently under investigation in government ministries and expected to be presented as a proposed set of regulations in the near future.
- Additional Initiatives: The German government has outlined several priorities for combating financial crime, which will be implemented in the coming months.