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Erscheinung:24.01.2019 | Topic Anti-money laundering Experts from financial supervision, politics and industry took part in the discussions in Bonn
BaFin’s first symposium on combating money laundering and terrorist financing
“If anyone in the private sector still believes that combating money laundering is unimportant, they clearly aren’t up-to-date.” With this message, BaFin Chief Executive Director Dr Thorsten Pötzsch opened the first BaFin symposium on combating money laundering and terrorist financing, held in Bonn on 12 December. 500 representatives of banks, insurance companies, public authorities, and associations attended Dr Pötzsch’s opening speech, in which he pointed out that combating money laundering and terrorist financing has significantly grown in importance both in terms of regulation and in terms of public perception.
Dr Jens Fürhoff, Director-General of the Prevention of Money Laundering Directorate at BaFin, and Bettina Volprecht, Head of the Internal Communications, Internet and Central Event Management Division at BaFin, acted as hosts for the event, which took place in the German Bundestag’s former plenary chamber at the World Conference Center in Bonn. Dr Jan-Gerrit Iken (Commerzbank AG), Thorsten Höche (Association of German Banks – Bundesverband deutscher Banken), Daniel Thelesklaf (Moneyval – the Council of Europe's Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism), and Dr Fürhoff took part in the panel discussion on the future direction of money laundering prevention. One interesting observation was that banks are already using artificial intelligence to detect money laundering. BaFin’s new guidelines for the interpretation and application of the German Money Laundering Act were received positively.
At a glance:Interpretation and application guidelines
BaFin has published interpretation and application guidelines (Auslegungs- und Anwendungshinweise - AuA) in accordance with section 51 (8) of the German Money Laundering Act (Geldwäschegesetz - GwG - only available in German). These apply to all obliged entities under the GwG that are supervised by BaFin.
The guidelines provide more detailed information on the legal provisions and are intended to help the obliged entities comply with their obligations.
They also aim to facilitate the proper implementation of customer due diligence requirements and internal safeguards and follow a risk-based approach. In particular, new legal requirements are also explained in the guidelines – such as the concept of a “fictitious beneficial owner”. The requirements relating to the identification of contracting parties are also clarified, among other things.
BaFin held a consultation on the guidelines in writing and by way of an oral hearing. With the publication of these guidelines, BaFin has fulfilled its legal mandate under section 51 (8) of the GwG.
Interpretation and application guidelines
The presentation by Tatjana Leonhardt and Golo Trauzettel (BaFin) focused on the guidelines and the new Money Laundering Act. They began by putting the provisions within a national and an international legal context and highlighted the dynamic nature of the guidelines – which are not static but continuously changing.
They also looked into the regulatory content of the guidelines in detail. For instance, all obliged entities are required to draw up a risk analysis as part of risk management. Money laundering reporting officers, who play a key role, cannot be linked to any other organisational departments or units reporting directly to senior management. In addition, BaFin rigorously scrutinises applications for an exemption from the obligation to appoint a money laundering reporting officer and the appointment of senior management members as money laundering reporting officers. Leonhardt and Trauzettel went on to outline internal safeguards and customer due diligence and record-keeping obligations. Leonhardt concluded by stressing the magnitude of the challenge of finding the right balance between a risk-based approach and the principle of binding provisions while drawing up the interpretation guidelines.
Olaf Rachstein (Federal Ministry of Finance – Bundesministerium der Finanzen) described the key points of the 5th Anti-Money Laundering Directive, which EU Member States are required to transpose into national law by 10 January 2020.
At a glance:5th Anti-Money Laundering Directive
The directive amending the 4th Anti-Money Laundering Directive is known as the 5th Anti-Money Laundering Directive. Its official name, however, is a bit of a mouthful: Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU.
European legislators considered that the 4th Anti-Money Laundering Directive needed to be improved following the terror attacks in Paris on 13 November 2015 and in Brussels on 22 March 2016 and after the revelations of the Panama Papers.
On the basis of the 5th Anti-Money Laundering Directive, the transparency register has been opened to the public, centralised bank account registries have been set up and the scope of the directive has been expanded to include virtual currency exchange platforms and custodian wallet providers.
EU Member States are required to transpose the provisions into national law by 10 January 2020.
Insights from the field
Christof Schulte, who has been the head of the German Financial Intelligence Unit (Zentralstelle für Finanztransaktionsuntersuchungen) since August 2018, shed light on current issues relating to suspicious transaction reports from the FIU’s perspective. Schulte outlined plans to expand the FIU in stages. 400 positions are to be filled upon completion of the expansion. This increase in staff is urgently needed as the number of reports has risen significantly. The FIU receives between 300 and 400 reports every day. Close attention is currently paid to reports relating to the real estate sector as special money laundering risks can be observed here.
Dr Barbara Roth (UniCredit Bank AG) discussed early experiences with the new German Money Laundering Act from a credit institution’s perspective. The greatest challenge, she said, was the very short time frame between the adoption of the final version by the German Bundesrat on 2 June 2017 and the entry into force of the new Act on 26 July 2017. Roth also addressed certain aspects such as risk management and money laundering reporting officers.
Michael Thelen (BaFin) talked about experiences with on-site inspections at credit institutions. BaFin conducts its own inspections because they allow supervisors to gain direct insight into the prevention systems of obliged entities and to exchange information more closely and directly with those involved at the institution, Thelen explained. The inspections focus on key areas and are conducted on the basis of current events or the particular features of an institution. 70 inspections were carried out in 2018. These inspections include examining documents, holding discussions, and following up on how any identified shortcomings are being resolved. BaFin works in close collaboration with the institutions’ money laundering reporting officers because the two sides ultimately have a common goal. Thelen clearly stated: “We are not working against you but tackling criminal activity together with you.”
The next symposium on money laundering and terrorist financing is set to take place at the same location on 12 December 2019.
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