Germany Takes Steps to Prevent Money Laundering and Terrorist Financing

Introduction

Germany is strengthening its efforts to combat financial crime and maintain a secure business environment. This includes both state supervisory and law enforcement authorities, as well as private-law actors in the financial and non-financial sectors.

EU Measures Against Money Laundering and Terrorist Financing

At the European level, there has been significant emphasis on combating money laundering and terrorist financing. The EU Commission has recently published a comprehensive package of measures to address these issues, including:

New Regulations

Draft EU Money Laundering Regulation: Aims to harmonize regulations across EU member states.
6th EU Money Laundering Directive: Requires supranational and national risk analyses, register obligations, and regulates the responsibilities and tasks of central reporting offices and supervisory authorities.

Company Obligations

Companies will be required to conduct a money laundering-related risk analysis according to their risk profile and take appropriate safeguards, including:

Due diligence obligations: With regard to business partners.
Obligations in connection with the reporting of suspicious cases.
Introduction of group-wide procedures.

Whistleblower System

A whistleblower system must be set up to enable confidential reporting of violations.

Consequences of Non-Compliance

Non-compliance with regulations can result in fines, even if non-effective preventive mechanisms are already in place under the Money Laundering Act.

Changes to the Transparency Register

All legal entities under private law and registered partnerships will be required to identify their beneficial owners and report this information to the register.

Challenges related to sanctions and embargoes are subject to constant change due to global political developments. Companies can seek support from experts who offer a range of services, including:

Prevention Measures

Prevention measures: To help companies embed money laundering prevention in their compliance strategy.
Clarification and processing of suspicious circumstances.
Consultation and examination: To identify business partners and ensure effective preventive mechanisms are in place.
Forensic investigation: To assess, monitor, and manage legal risks related to misinterpretation of corresponding regulations.

Conclusion

Germany is taking significant steps to combat financial crime and maintain a secure business environment. Companies must be aware of the new regulations and consequences of non-compliance to ensure effective preventive mechanisms are in place.