Financial Crime World

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Financial Crime Prevention Techniques in Germany: Staying Ahead of Money Laundering and Terrorist Financing

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In a bid to protect against financial crime, Germany has taken a proactive approach to prevent money laundering and terrorist financing. While state supervisory and law enforcement authorities play a crucial role, private-law actors in the financial and non-financial sectors are also essential in this fight.

EU Measures Against Money Laundering and Terrorist Financing

The European Union has recently published a comprehensive package of measures aimed at combating money laundering and terrorist financing. The package includes:

  • Draft EU Money Laundering Regulation: ensures uniform implementation of measures to prevent money laundering and terrorist financing across EU member states.
  • Draft 6th EU Money Laundering Directive: sets out requirements for supranational and national risk analyses, as well as register obligations.
  • Proposals for creating a new supervisory authority: combat money laundering.
  • Revisions to the Money Transfer Regulation: includes expanded definitions of terms such as “cryptovalue” and “crypto service provider,” and a ban on anonymous cryptowallets.

Obligations for Companies

Until the new regulations come into force, companies must continue to comply with the provisions of Germany’s Money Laundering Act. This includes:

  • Conducting money laundering-related risk analyses according to their risk profile.
  • Taking appropriate safeguards.
  • Establishing whistleblower systems.

Non-compliance with regulations can result in fines, and companies are advised to ensure they have effective preventive mechanisms in place to avoid such penalties.

Challenges for Companies

Companies must also navigate the following challenges:

Transparency Register

Germany’s Transparency Register and Financial Information Act pose challenges for companies. With the conversion of the transparency register from a catch-all to a full register, all legal entities under private law and registered partnerships must:

  • Identify their beneficial owners.
  • Keep information up to date.
  • Actively report it to the transparency register.

Sanctions and Embargoes

Closely related to money laundering and terrorist financing are challenges related to sanctions and embargoes. Companies with an international purchasing and/or sales market must navigate constant changes in sanctions and embargoes, which can lead to legal risks due to misinterpretation of corresponding regulations.

Our Services

To help companies meet the diverse challenges of preventing money laundering, terrorist financing, and sanctions violations, we offer a range of services, including:

Prevention

  • Status checks.
  • Gap analyses.
  • Risk assessments.
  • Business partner identification.
  • Compliance strategy advice.
  • Organizational structure development.
  • Process definition.
  • Training concepts.
  • Whistleblower system implementation.
  • Transparency register reporting.

Clarification and Processing of Suspicious Circumstances

  • Internal audit support.
  • External auditor support.
  • Guideline adaptation.
  • Look-back analyses.
  • Forensic investigations.

Consultation and Examination

  • Compliance advice.
  • Regulatory audits.
  • Corporate monitorships.

By staying ahead of financial crime prevention techniques in Germany, companies can ensure compliance with legal and regulatory requirements while minimizing the risk of fines and reputational damage.