Electronic transparency register

One of the important elements of the planned law is to lay down the conditions for a central electronic transparency register. The register is intended to contain information about the beneficial owners of companies, i.e. all natural persons who own or control a company or at whose instigation a business relationship has been founded. It is supposed to increase transparency and thus make it harder to abuse companies and trusts for the purposes of money laundering, tax fraud and terrorist financing.

To keep bureaucracy for companies to a minimum, information on participations is also be to be gleaned from existing registers such as the register of companies (Handelsregister). In addition to the FIU, supervisory authorities and law enforcement agencies, companies and institutions subject to the GwG will also be allowed to access the register in order to fulfil their obligations under this law. Other persons and organisations with legitimate interest, such as non-governmental organisations and specialist journalists, will be able to access it too.

Risk-based approach and group-wide obligations

The planned law takes an even more strongly risk-based approach. In future, all obliged entities pursuant to the GwG must document their own and – in the case of companies subordinate to them in Germany or abroad – group-wide risks and base their measures to prevent money laundering and terrorist financing thereon.

Simplified measures may be enough for low risks, but conversely when risks are higher, more must be done to compensate for them. Therefore, both obliged entities and supervisory authorities like BaFin will be able to make more targeted use of their resources in future, which should enable the constantly evolving methods of money launderers and financers of terrorism to be combated flexibly and effectively.

Administrative fines and sanctions

Breaches must incur effective sanctions to ensure that money-laundering provisions be complied with. For this reason, the range of administrative fines which may be imposed for serious, repeated and systematic breaches by institutions and companies of the financial sector will be raised significantly. The maximum sum for administrative offences pursuant to the GwG is to rise from EUR 100,000 to EUR 5 million for banks.

Moreover, the law is to give supervisory authorities additional tools to employ in cases where money-laundering obligations are contravened. These will include the possibility temporarily to ban persons responsible for the breaches from exercising managerial functions at an obliged entity. In future, BaFin will generally publish on its website sanctions it has imposed, as soon as they have become incontestable.

Financial Intelligence Unit (Zentralstelle für Finanztransaktionsuntersuchungen)

Finally, as mentioned above, the new law will also cause the FIU to be restructured and expanded. The FIU was previously based at the BKA within the portfolio of the Federal Ministry of the Interior. It will now be transferred to the Central Customs Authority (Generalzolldirektion) as an administrative authority, i.e. within the portfolio of the Federal Ministry of Finance.

At the same time, the FIU’s functions and competencies will be revised on the basis of the provisions of the Fourth Money Laundering Directive, with one area of emphasis to be operational and strategic analysis. The FIU will also act as a filter for the first time, only forwarding "worthwhile" reports on to the law enforcement agencies so as to take some of the burden off them.