The risks for financial intermediaries and advisers in Germany
| Published date | 01 July 2005 |
| Date | 01 July 2005 |
| DOI | https://doi.org/10.1108/13685200510620975 |
| Pages | 220-226 |
| Author | Katlen Blöcker |
| Subject Matter | Accounting & finance |
Journal of Money Laundering Control Ð Vol. 8 No. 3
The Risks for Financial Intermediaries and Advisers
in Germany
Katlen Blo
Ècker
DEVELOPMENTS IN ANTI-MONEY
LAUNDERING LEGISLATION
After a very active year in 2002 in terms of new anti-
money laundering legislation, the year 2003 has
mainly been used to implement and carry it out.
Major relevant legislation of 2002 includes the Law
on Combating International Terrorism,
1
the Fourth
Act on the Advancement of the Financial Market
(Financial Market Act)
2
and the Law on Combating
Money Laundering and International Terrorism.
3
Only minor legislative amendments have been made
in 2003.
4
In addition to the already existing obligations
to identify customers and store identi®cation details
and to notify the authorities of any suspicions of
money laundering, new duties have been introduced
and the group of professions which are subject to
these obligations has been widened. In accordance
with the European Directive 2001/97/EG on prevent-
ingthe use of the ®nancial system for money laundering
purposes,
5
lawyers, notaries, chartered accountants,
tax advisers and other professionals have to ful®l
obligations under the Money Laundering Act. New
obligations have been inserted into the Money Laun-
dering Act but also into the Banking Act, such as the
screening of bank accounts and the online supervision
of data by the supervisory authorities.
DUTIES OF PROFESSIONALS
DEALING WITH ASSETS
Identi®cation duties
Financial intermediaries and other professionals deal-
ing with people's assets (obliged persons) are subject
to speci®c duties arising from the Money Laundering
Act. The ®rst task is the identi®cation of the person
who carries out the transaction (ss 2,3,4,6 Money
Laundering Act) and the identi®cation of the person
having an economic and legal interest in the deal (s.
8 Money Laundering Act).
Recording duties
Further to this, the Money Laundering Act contains
regulations with respect to recording and safekeeping
of the data gained by the identi®cation (s. 9 Money
Laundering Act) and their use (s. 10 Money Launder-
ing Act).
Reporting duties
A key piece of the Money Laundering Act is the
reporting duty in case of suspicion of money launder-
ing (s. 11 Money Laundering Act). It is especially in
case of non-compliance with this duty that liability
can result.
Structural duties
Obliged persons have to ensure that their internal
structure is prepared to ®ght any abuse for money
laundering or terrorist ®nancing purposes. This
includes the nomination of a compliance ocer, the
installation of adequate security and control measures
and the training of personnel (s. 14 Money Laundering
Act).
According to the amended s. 24c(1) Banking Act,
banks and ®nancial intermediaries are now obliged
to set up a database which is designed to allow the
German Finance Supervisory Authority (BAFin) to
access information without the knowledge of the
respective ®nancial institution. Financial intermedi-
aries are under the obligation to set up appropriate,
primarily electronic data-processing security systems
against money laundering and fraudulent activities.
Data of clients and their businesses are to be screened
if there is evidence of the adherence of a client to a
high-risk group and the behaviour can be regarded
as suspicious.
LIMITATION OF LIABILITY
Section 12 of the Money Laundering Act, a conse-
quence of Article 9 of Directive 91/308/EEC, provides
the following: `A person who reports to the law enfor-
cement authorities facts which point to a crime of s. 261
German Criminal Code or to the ®nancing of a terror-
ist group in accordance with s. 129a or s. 129b German
Criminal Code, cannot be held liable, unless an untrue
report has been made intentionally or by way of gross
Page 220
Journalof Money Laundering Control
Vol.8, No. 3, 2005, pp. 220± 226
#HenryStewart Publications
ISSN1368-5201
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