The Act Implementing the Fourth EU Anti-Money Laundering Directive¹, Interpreting the EU Funds Transfers Regulation and Reorganising the Financial Intelligence Unit (FIU) (Gesetz zur Umsetzung der Vierten EU-Geldwäscherichtlinie, zur Ausführung der EU-Geldtransferverordnung und zur Neuorganisation der Zentralstelle für Finanztransaktionsuntersuchungen) of 23 June 2017² entered into force on 26 June 2017 (see info box "BaFin involved in Level 3 measures"). The Act revised the Money Laundering Act of 2008. It is intended to prevent and combat money laundering and terrorist financing more effectively in Germany.

Electronic transparency register

The Act created the conditions for a central electronic transparency register. This register went live on 1 October 2017, creating and facilitating access to a record of the beneficial owners of corporations, partnerships und trusts that are active on the financial market. It is intended to increase the transparency of these legal entities and make it more difficult to abuse companies and trusts for the purposes of money laundering or terrorist financing. The register also makes use of information on equity investments stored in existing registers, such as the commercial register or the register of associations (section 22 (1) of the Money Laundering Act).

The register may be accessed by the Financial Intelligence Unit as well as supervisory authorities and law enforcement agencies. Companies and persons that are obliged entities within the meaning of the Money Laundering Act also have access – in fulfilment of their due diligence obligations under money laundering law. Even other individuals and organisations that demonstrate to the entity keeping the register that they have a legitimate interest may view the register.

Risk-based approach and group-wide obligations

The amended Money Laundering Act is based on a strong risk-based approach, under which all obliged entities as defined by the Act have to determine both their own risks and group-wide risks if they have subordinated companies in Germany or abroad. This enables not only the companies themselves, but also supervisory authorities to deploy their resources efficiently.

Administrative fines and sanctions

Serious, repeated or systematic violations of the Money Laundering Act may now be punished with an administrative fine of up to €1 million. In such cases, certain obliged entities that are legal persons or associations of individuals may be fined up to €5 million.

Moreover, the Act gives the competent authorities additional tools, including the option to temporarily prohibit the persons responsible for the violations from exercising management duties at an obliged entity.