Financial Crime World

Banks’ Responsibilities in Preventing Financial Crime in Germany

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Preventing money laundering and terrorist financing is crucial for maintaining an attractive business location in Germany. In addition to state supervisory and law enforcement authorities, private-law actors in the financial and non-financial sectors play a vital role.

Recent Developments in Regulations

In recent years, there has been a significant increase in regulations aimed at combating money laundering and terrorist financing. The EU Commission published a comprehensive package of measures on July 20, 2021, which includes:

  • Draft EU Money Laundering Regulation
  • Proposal for the 6th EU Money Laundering Directive
  • Plan to create a new supervisory authority
  • Revised versions of the Money Transfer Regulation

These regulations aim to ensure uniform implementation of anti-money laundering measures across EU member states.

Responsibilities of German Banks

Germany’s banks have a crucial role to play in preventing financial crime. Until the new regulations come into force, the provisions of the German Money Laundering Act will continue to apply. All obligated parties must 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
  • Reporting of suspicious cases
  • Group-wide procedures

Non-compliance with regulations can result in fines. It is essential for German banks to have effective preventive mechanisms in place to avoid such penalties.

Challenges Posed by the Transparency Register

The transparency register also poses challenges for companies. With the conversion from a catch-all to a full register, all legal entities under private law and registered partnerships must:

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

German banks must navigate the complexities of sanctions and embargoes, which are subject to constant change due to global political developments. The legal risks associated with misinterpreting corresponding regulations (especially those of the EU and the USA) and resulting violations must be assessed, monitored, and managed in a functioning governance system.

Our Services for German Banks

To help German banks meet these diverse challenges, our services include:

Prevention

  • Risk management
  • Economic sanctions advice
  • Business partner identification
  • Compliance strategy development
  • Training programs

Clarification and Processing of Suspicious Circumstances

  • Internal audit department support
  • Adaptation of guidelines
  • Look-back analysis
  • Forensic investigation
  • Regulatory audits

Consultation and Examination

  • Legal requirement compliance
  • Corporate monitorships
  • Domestic and foreign-initiated audits

By partnering with our experts, German banks can ensure they are adequately prepared to prevent financial crime and maintain their position as a leading financial hub in Europe.