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The Financial Crime Prevention Act - Further Tightening of Money Laundering Law!?

German money laundering prevention law has been tightened a lot in the last years. Taking into account the problems that still exist in this area, this is a useful approach. Anyhow: New legislation means new obligations, also for companies in Germany.

Recently, the Federal Ministry of Finance presented another draft bill, this time on the so-called Financial Crime Prevention Act (Finanzkriminalitätsbekämpfungsgesetz). According to this draft, further tightening of money laundering law is to be expected already beginning of next years.

Most German companies and also foreign companies with (direct or indirect) ownership on real estate in Germany would be concerned by the new legislation as the transparency obligations applying to them will be broadened again. Now already, they are obliged to register the Ultimate Beneficial Owners (UBOs) in the (partially public) transparency register. Under the new Financial Crime Prevention Act, it is to be expected that they need to file even more information with the transparency register than before (such as the place of birth of beneficial owners). In addition, the collected data is to be checked more strictly for accuracy and false reports are to be processed more quickly and comprehensively (e.g. via the so-called inconsistency checks). Due to the high risk of money laundering in the area of real estate transactions, a new real estate transaction register is also to be created and further data collected there.

Furthermore, there will be changes of an organizational nature. The authorities responsible for money laundering prevention are to be better organized and structured. For this purpose, for example, a "Money Laundering Investigation Center" is to be created.

At the same time, the obligations under money laundering prevention law – which essentially are specific identification obligations with regard to contractual partners - will be extended. The new obligations do concern financial holding companies in particular.

The Financial Crime Prevention Act shall come into force January 1, 2024. The new regulations will make money laundering prevention compliance more complicated. Therefore, every company should deal with the new regulations and check its own need for action.

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