Money Laundering Act: Risk Management as Evidence with German Authorities

Jun 29, 22 • Compliance • No Comments • Dr. Constantin Goette

Recently, we have experienced a rise in feedback from our clients that the requirements of the German Money Laundering Act (GwG) are increasingly being enforced consistently by the relevant supervisory authorities, particularly with regard to risk management which is also part of Compliance Management Systems. Obligated parties under the Money Laundering Act (GwG) are required, among other things, to have an effective risk management system in place in accordance with Sections 4 ff. of the Money Laundering Act.

Which group of entrepreneurs is subject to the Money Laundering Act (GwG)?

Clients engaged within the professions of real estate agents, organizers and brokers of games of chance as well as dealers in goods, art brokers and art warehouse managers are particularly affected as obligated parties. However, lawyers, auditors and tax consultants, for example, are also obligated parties under the same law.

How is professional risk management implemented?

Have you received a request from the supervisory authorities to introduce risk management into your company? Or do you want to take preventive action?

We support you in the creation of a comprehensive risk management system in the form of the execution of a risk analysis and the development of suitable preventive measures as well as these in corresponding written form.

This includes the analysis of your company or your business activity in the form of an inventory of the company-specific situation by classifying the business and organizational structure under assessment of the location, the customer structure of the company, the distribution channels and the offered products and services as well as those under consideration of the volume and the structure of the national and international payment transactions.

The next step is to record and identify the money laundering risks in the respective sectors within your company, which will then be assessed individually.

Subsequently, we will work with you to develop suitable measures to prevent money laundering. In particular, this also requires a regular review of the risk analysis and the correspondingly implemented measures.