Money Laundering Compliance and Criminal Defense for Money Laundering in Germany

Why money laundering compliance?

In recent years, the demands placed on companies and credit institutions in terms of preventing money laundering have steadily increased in Germany. Money laundering, the financing of terrorism and organized crime are being combated more intensively at national and international level.

Among other things, extensive identity verification, monitoring and reporting obligations have been introduced. These obligations are mainly regulated by the German Money Laundering Act (GWG), which is also being tightened up on a regular basis. Most recently, the European legislator again increased the requirements for credit institutions and companies with its fourth and fifth money laundering directive.

Companies that comply with money laundering regulations help making it more difficult for organized crime to disguise illegal cash flows. This also reduces the risk of being caught in the public prosecutor's crosshairs. Furthermore, companies that disregard money laundering guidelines are threatened with six-figure fines.

Companies in Germany are obligated to risk analysis

With the fourth and fifth money laundering directives, the EU is placing a focus on internal corporate risk management. According to these directives, companies are required to first determine the specific money laundering risks existing in their company (risk analysis). This risk analysis must be documented in an auditable manner and updated regularly.

Based on this individual risk analysis, appropriate security measures must then be taken in a second stage. In the case of corporations and groups of companies, the parent company must perform the risk analysis for the entire group. Internal prevention measures must be uniform throughout the group.

Non-compliance may result in severe sanctions

The requirements of the law on money laundering are not only difficult to understand due to their complexity, but also entail considerable liability and criminal law risks in the event of non-compliance. First of all, the German Money Laundering Act contains its own provisions on fines, which punish

  • an omitted or incorrectly assessed risk analysis,
  • failure to document or review the results of the risk analysis,
  • omission of internal security measures,
  • failure to implement internal security measures throughout the group

with a fine of up to EUR 150,000 in case of intent, otherwise with a fine of up to one hundred thousand Euros.

There is also the threat of a corporate fine under the Administrative Offences Act (Section 30 OWiG). In addition, criminal proceedings against the responsible employees and a possible personal liability of the managing director (Section 43 GmbHG) or the board of directors (Section 93 AktG) may also be incurred.

Panama Papers, FinCEN Files and others

Over the past few years, various journalistic investigations have uncovered the fact that money laundering and tax evasion still occur despite comprehensive tightening of laws. We are observing that the authorities are taking increasingly harsher action and are reacting with ever lower thresholds to suspicious reports. We anticipate that there will be further toughening of the law and have already noticed that the penalties imposed are getting higher.

WINHELLER gets your company money laundering compliant

We offer our clients a comprehensive range of money laundering law services. These include, among others:

  • Execution and documentation of internal risk analysis
  • Regular updating of the risk analysis
  • Development and implementation of (group-wide) internal security measures such as
    • Creation of internal company guidelines (codes of conduct), checklists and a money laundering manual
    • Informing and regularly training employees (in-house and e-learning)
    • Checking the employees' dependability
    • Complaint management
    • Notification systems, whistle blowing systems
    • Compliance Helpdesk
  • Audit procedures, efficiency and effectiveness audit, audit documentation, follow-up audits
  • Assumption of the position and tasks of an external money laundering officer
  • Criminal defense both for administrative offences and criminal proceedings in the event of accusations of violations in connection with money laundering law (GWG as well as Section 261 German Criminal Code)

Your attorney for money laundering compliance in Germany

Would you like to conduct a risk analysis or is your company already under investigation for money laundering? Our experts are at your disposal. Your contact persons are attorney Bartosz Dzionsko and attorney Alice Romisch (specialist in tax law). The easiest way to contact us is to call (+49 (0)69 76 75 77 80) or send us an e-mail (info@winheller.com). Do not hesitate to contact us with your specific questions.

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Awards

Juve AwardLegal 500 Germany 2019
azur100: Top Employer for Lawyers 2018