Money Laundering Compliance in Germany

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. However, companies that are not directly obligated under the German Money Laundering Act should also take appropriate internal (security) measures to prevent possible violations of money laundering obligations that might also be relevant under criminal law.

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 the most extreme case, criminal proceedings may be instituted against the persons involved and the managing director or the Executive Board may be held personally liable.

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 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 (code of conduct, checklists and a money laundering manual)
  • Regular training of employees
  • Checking the employees' dependability
  • Complaint management
  • Notification systems, whistle blowing guidelines
  • 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 obligations