The main aim is to ensure transparency in business relationships and financial transactions using specific precautions on a risk-oriented basis.

According to section 4 of the GwG obliged parties have to have a risk management, which includes a risk analysis according to section 5 of the GwG and internal risk measures according to section 6 of the GwG. This obligation is the core of the risk-based approach regarding money laundering and terrorist financing. According to section 4 (1) of the GwG type and extent of the business of the obliged parties must be taken into account in the design of the risk management.

Obliged parties have also to comply with the customer due diligence duties. In addition to identifying the customer, any person acting on his behalf and any different beneficial owner or beneficiary in the case of insurances it is also necessary to determine whether these persons are politically exposed persons, relatives of such persons or known close associates.

In addition, information on the purpose and the type of business relationship must be obtained and evaluated where not self-explanatory. Furthermore, a continuous monitoring of the business relationship or transactions processed must take place. As part of this continuous monitoring, the obliged parties must ensure that the relevant documents, data or information are updated within an appropriate timeframe taking into account the relevant risk. Such measures make it possible to retrace cash flows and to discover uncommon or even suspicious transactions or business relationships.

Obliged parties can apply simplified due diligence measures if they determine that there is only a low risk of ML/TF in certain areas. In doing so they have to take into account the risk factors listed in Annex 1 of the GwG.

According to section 15 (2) of the GwG obliged parties have to comply with enhanced due diligence measures if they determine in the course of their risk analysis or in individual cases that there might be a higher risk of money laundering or terrorist financing. In doing so they have to take into account the risk factors mentioned in Annex 2 of the GwG. Enhanced due diligence measures have to be applied in addition to the general due diligence measures.

Another primary duty is the obligation to report suspicious transactions to the German Financial Inteligence Unit (FIU) (Zentralstelle für Finanztransaktionsuntersuchungen) (cf. Section § 43 of the Anti-Money Laundering Act, see also Suspicious Transaction Reporting System.