The Money Laundering Act (GwG) is a German law designed to combat money laundering and, in particular, the resulting financing of terrorism. It sets out obligations and measures that must be taken by certain individuals and companies to ensure that they do not contribute to money laundering or the financing of terrorism.

Entities subject to the Money Laundering Act include, amongst others, banks, financial service providers, auditors, tax advisers, solicitors, notaries and estate agents. These obliged entities must, for example, carry out a money laundering risk assessment, identify their customers and monitor their business relationships. Suspicious transactions must be reported and documentation requirements must be met.

Breaches of the Money Laundering Act may result in heavy fines and custodial sentences.

The Money Laundering Act (GwG) sets out who is considered an „obliged entity“ for the purposes of the Act and is therefore required to fulfil certain obligations to prevent money laundering and the financing of terrorism.

Obligated entities within the meaning of the Anti-Money Laundering Act include, amongst others:

• Credit and financial services institutions, such as banks, savings banks and insurance companies
• Merchants who make, receive or cannot rule out cash payments in excess of 10,000 euros
• Art dealers and art agents with payments of 10,000 euros or more
• Estate agents
• Notaries, solicitors and chartered accountants
• Tax advisers and tax agents
• Precious metal dealers

These obliged entities must take certain measures to prevent money laundering and the financing of terrorism. These include, amongst other things, carrying out risk assessments, identifying customers and monitoring business relationships. Suspicious transactions must be reported and documentation requirements must be met.

The Money Laundering Act, which aims to prevent money laundering and the financing of terrorism, came into force back in 2012. The directives and the implementing legislation for the 5th Anti-Money Laundering Directive have been fully in force since 1 January 2020.

On our programme „hsp live at 11“, we spoke to chartered accountant Stefan Dreßler about the content and obligations set out in the Money Laundering Act.

The Money Laundering Act of the Federal Republic of Germany is complex and far-reaching. That is why we have put together an informative and accessible white paper on the Money Laundering Act for you. It explains the basics of the Money Laundering Act and helps you to comply with the legal requirements and, where necessary, to advise your clients on matters relating to the Money Laundering Act.

Get your free digital copy of hsp’s GwG white paper – comprising just under 20,000 words – now. Simply fill in the form below to receive the document by email. By requesting the white paper, you are of course under no obligation whatsoever to take out a subscription or make a purchase.

Whether you wish to deal with the Money Laundering Act yourself or have delegated the task to a compliance officer, the solution is Opti.Tax.

This is because, in the field of compliance documentation too, intelligently implemented taxonomy solutions are gaining ground. They are used, for example, to create procedural documentation, such as a Tax Compliance Management Systems or a money laundering risk assessment.

For these tasks, hsp provides taxonomies developed in-house that also reflect sector-specific characteristics. As such, all requirements of the GwG are already incorporated into Opti.Tax.

Tackle the issue of money laundering properly now. With Opti.Tax, you get the GWG solution that will take further tasks off your hands in the long term: procedural documentation, e-balance sheets, the Federal Gazette, liquidity advice, transfer pricing documentation, TCMS and much more – all from a single source, with no disruption to your workflow.