Statutory Amendments in Money Laundering Prevention

As of January 1, 2020, some further significant changes to the German Money Laundering Act (GwG) came into force. Obligors under the GwG, who establish a new business relationship with a legal person, partnership or similar structures, such as trusts, have to identify their business partner by providing an official register extract or, if a registration in a public register does not exist, by providing an extract from the transparency register. If deviations between the data collected and the data contained in the transparency register are determined while identifying a business partner, these circumstances have to be reported to the registry office immediately. In the future, failures to comply with such reporting obligations may result in a fine.

Furthermore, the transparency register – which was set up two years ago – is accessible to the public since January 1, 2020 without proof of a legitimate interest. In order to avoid any misuse, however, prior online registration is required to use the transparency register.

The so called Beneficial Owners will now be able to request information, but only in anonymous form, about the relevant disclosures of the transparency register referring to them. If the interests of a Beneficial Owner that are worthy of protection preclude access to his data in the transparency register, access may be restricted in whole or in part at the request of the Beneficial Owner.

From 2024 at the latest, it will finally no longer be only mandatory to register suspicious transaction reports, but mandatory to all Obligors under the GwG to register with the Central Office for Financial Transaction Investigations (FIU). On the one hand, this should lower the inhibition threshold for reporting suspicious transactions, on the other hand, it should improve the options for informing all Obligors under the GwG on issues relevant to money laundering.