Money laundering; implementation of supervision

The Money Laundering Act (Geldwäschegesetz - GwG) requires compliance with security measures and due diligence requirements for the performance of particularly vulnerable trades and professional activities. This is intended to prevent misuse for the purpose of money laundering.

Description

Money laundering is a process in which criminally obtained assets (e.g. through drug or arms trafficking) are converted into apparently legal assets.

The objective of the AMLA is to detect criminal assets (a legal definition of the term "asset" can be found in Section 1 (7) of the AMLA; please refer to the link under "Legal basis") derived from serious criminal acts in monetary transactions. For this purpose, it is necessary for the legal economic system to take security precautions. This also applies to measures to prevent terrorist financing.

The so-called "non-financial sector" and certain financial enterprises that are not subject to supervision by the Federal Financial Supervisory Authority (BaFin) are subject to supervision by state authorities (Section 50 No. 9 GwG). Please refer to the item "Prerequisites" to find out which professional activities and companies are subject to supervision.

The task of the supervisory authorities is to ensure that the obligated parties comply with the statutory requirements under the Money Laundering Act, in particular with regard to internal security measures and due diligence obligations, and to prosecute and punish any administrative offences that are established with probative value.

Some of the due diligence obligations are to be complied with by the obligated companies across the board vis-à-vis all contractual partners. Therefore, they may have an impact on every citizen and consumer. The Money Laundering Act obliges contractual partners to identify themselves on request and, if necessary, to have a copy of their ID produced. Further information, e.g. on the beneficial owner, may also be requested.

In order to document the information collected, the obligated parties are recommended to use the documentation forms available for download under "Forms". Irrespective of this, the Money Laundering Act now gives obligated parties the right and the obligation to make copies of the documents submitted for identification purposes. This means that even if the documentation sheet is used, a copy must always be made.

In the Free State of Bavaria, according to Section 8a of the Competence Ordinance (Zuständigkeitsverordnung, ZustV), the focal governments of Central Franconia and Lower Bavaria are responsible. For the administrative districts of Upper, Lower and Middle Franconia, Swabia and Upper Palatinate, the government of Middle Franconia is responsible; for the administrative districts of Upper and Lower Bavaria, the government of Lower Bavaria.

Prerequisites

Obligated persons in the so-called "non-financial sector" include according to

  • § Section 2 (1) no. 6 AMLA "Financial enterprises"

    Pursuant to Section 1 (24) sentence 1 AMLA, financial enterprises are enterprises whose main activity consists of,
    • acquiring, holding or disposing of participations (as a rule, holding companies in the industrial sector are not obligated parties under the MLA; holding companies which exclusively hold participations in companies outside the credit institution, financial institution and insurance sector and which do not engage in entrepreneurial activities beyond the tasks associated with the administration of the participation holdings are not financial enterprises within the meaning of the MLA),
    • to acquire monetary receivables with a financing function against payment (in particular, securitization transactions and cases of factoring are covered here, whereas collection activities are generally not),
    • to trade in financial instruments for their own account ("proprietary trading"),
    • financial investment intermediaries pursuant to § 34 f (1) sentence 1 of the German Trade Regulation Act (Gewerbeordnung),
    • fee-based financial investment advisors pursuant to Section 34 h (1) Sentence 1 of the Trade Regulation Act, unless the brokerage and advisory services relate exclusively to investments distributed or issued by obligated parties pursuant to this Act,
    • advising companies on capital structure, industrial strategy and related issues, and advising and providing services to companies in the event of mergers and acquisitions (in particular mergers and acquisitions advice), or
    • broker loans between credit institutions (money broking)

      The obligation also applies to branches and subsidiaries of such companies located in Germany and having their registered office abroad, insofar as they are not already covered by Section 2 (1) Nos. 1 to 5, 7, 9 10, 12 or 13.
  • § Section 2 (1) No. 8 AMLA "Insurance Intermediaries"

    Insurance intermediaries are among the "obligated parties" under the AMLA if they act as so-called "unbound intermediaries" and, within the scope of this activity, they
    • Offer life insurance activities with an investment purpose,
    • offer accident insurance with return of premium, or
    • offer money loans and acceptance credits.
  • § Section 2 (1) No. 11 GwG

    legal advisors who are not members of a bar association and registered persons pursuant to Section 10 of the Legal Services Act, insofar as they are involved in the planning or execution of one of the following transactions on behalf of their client, with the exception of the provision of collection services as defined in Section 2 (2) Sentence 1 of the Legal Services Act:
    • Buying and selling real estate or commercial businesses,
    • Managing money, securities or other assets,
    • Opening or managing bank, savings or securities accounts,
    • Raising funds necessary for the formation, operation or management of corporations,
    • establishing, operating or managing trusts, companies or similar structures,
    • carry out financial or real estate transactions in the name and for the account of the Client,
    • advise the client with respect to the client's capital structure, industrial strategy or related matters; or
    • Provide advice or services in connection with mergers or acquisitions.
  • § Section 2 (1) No. 13 GwG

    Service providers for companies and trusts or fiduciaries who do not belong to the professions listed in numbers 10 to 12, if they provide any of the following services for third parties:
    • Establishing a legal entity or partnership,
    • Exercising a management or executive function of a legal entity or a partnership, exercising the function of a partner of a partnership, or exercising a comparable function,
    • Providing a registered office, business, administrative or mailing address and other related services to a legal entity, to a partnership or to a legal arrangement under Section 3(3),
    • Performing the function of a trustee for a legal arrangement under Section 3(3),
    • Performing the function of a nominal shareholder for another person that is not a company listed on an organized market pursuant to Section 2 (11) of the Securities Trading Act, which is subject to transparency requirements in respect of voting shares in accordance with Community law or equivalent international standards,
    • creating the possibility for another person to perform the functions referred to in Section 2 (1) no. 13 letters b, d and e.

  • § Section 2 (1) No. 14 AMLA

Real estate agent (a legal definition of the term "real estate agent" can be found in Section 1 (11) AMLA - see under "Legal Basis").

  • § Section 2 (1) No. 16 GwG

dealers in goods, art brokers and art warehouse keepers, insofar as the warehousing takes place in duty-free zones (a legal definition of the terms "dealer in goods", "art broker" and "art warehouse keeper" can be found in Section 1 Paragraph 9 and Paragraph 23 GwG - see under "Legal basis").

Forms

Fees

  • The supervisory authorities may charge costs (see Annex to the Schedule of Costs, No. 2.II.3) to cover administrative expenses (Section 51 (4) AMLA).

Links to more information

Status: 09.04.2022

Responsible for editing: Bayerisches Staatsministerium des Innern, für Sport und Integration

Contains machine translated content. Show the original content

  • Online transactions, Bavaria-wide
  • Online transactions, locally limited
  • Prefillable Form, Bavaria-wide
  • Legal bases, Bavaria-wide
  • Legal bases, locally limited
  • Fees, Bavaria-wide
  • Fees, locally limited
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