Anti-Financial Crime / Money Laundering

The prevention of money laundering and terrorist financing serves to protect against financial crime and is an important factor for an attractive business location. In addition to state supervisory and law enforcement authorities, private-law actors in the financial and non-financial sectors also play a central role.

Particularly at the European level, great importance is attached to the topic. The EU Commission published a comprehensive package of measures to combat money laundering and terrorist financing on 20 July 2021. These include the draft EU Money Laundering Regulation, the draft for the 6th EU Money Laundering Directive, the proposal for the creation of a new supervisory authority and the revised version of the Money Transfer Regulation.

The Money Laundering Regulation aims at a uniform implementation of measures for the prevention of money laundering and terrorist financing at the level of the EU member states. The proposal for the 6th EU Money Laundering Directive contains requirements for supranational and national risk analyses as well as requirements for register obligations. In addition, the directive is to regulate the responsibilities and tasks of central reporting offices and supervisory authorities and to specify the cooperation with competent authorities for affected companies. In addition, a new supervisory authority for combating money laundering is to be created. Also included in the EU package of measures are proposals for a renewed EU Money Transfer Regulation. The existing definitions of terms are to be expanded to include "cryptovalue" and "crypto service provider" and the term "virtual currencies" is to be interpreted more comprehensively. The complete traceability of the originator and recipient of payments should be ensured in the future, especially with regard to crypto service providers. Furthermore, the proposed regulation includes uniform KYC regulations, requirements for the continuous monitoring of transactions and a ban on anonymous cryptowallets.

Until the planned regulations come into force, the provisions of the Money Laundering Act will continue to prevail. All obligated parties must conduct a money laundering-related risk analysis according to their risk profile and take appropriate safeguards. These include, in particular, due diligence obligations with regard to business partners, obligations in connection with the reporting of suspicious cases and, if applicable, the introduction of group-wide procedures. In addition, a whistleblower system must be set up that makes it possible to report violations of money laundering law confidentially.

Non-compliance with the regulations can result in fines. It must be taken into account that it is already sufficient for the imposition of a fine not to have effective preventive mechanisms in place according to the Money Laundering Act.

In addition to the Money Laundering Act, the Transparency Register and Financial Information Act also poses challenges for companies. With the conversion of the transparency register from a catch-all to a full register, all legal entities under private law and registered partnerships must identify their beneficial owners, keep the information up to date and actively report it to the transparency register for registration.

Closely related to money laundering and terrorist financing are the challenges related to sanctions and embargoes. Following the global political situation, sanctions and embargoes are subject to constant change. This leads to numerous challenges for companies with an international purchasing and/or sales market. The legal risks due to misinterpretation of corresponding regulations (especially those of the EU and the USA) and resulting violations must therefore be assessed, monitored and managed in a functioning governance system.

In order to meet the diverse challenges in the context of preventing money laundering, terrorist financing and sanctions violations, we support you with the following services:

• Status check and gap analysis of money laundering-related risk management
• Advice on the topic of economic sanctions
• Analysis of money laundering-related risks, taking into account the company-specific risk profile
• Identification of business partners and clarification of the beneficial owner (KYC)
• Advice on embedding money laundering prevention in the compliance strategy, taking into account best-practice solutions
• Advice on the allocation of responsibilities (three lines of defence), the organisational structure and procedures as well as suitable controls
• Definition of processes and required documentation as well as development of training concepts
• Conducting training courses for employees and management
• Support in the conception and implementation of a whistleblower system
• Support in reporting to the transparency register

• Support in the processing of findings by the internal audit department, the external auditor of the annual financial statements or special auditor as well as other internal and external bodies
• Advising on the adaptation of guidelines, processes and measures, taking into account best-practice solutions
• Conducting look-back analyses to identify and address deficiencies
• Forensic investigation of facts relating to money laundering, terrorist financing or sanctions violations

• Advice on compliance with legal and regulatory requirements around the prevention of money laundering, terrorist financing and sanctions violations
• Conducting and accompanying regulatory audits
• Support in the context of domestic and foreign-initiated corporate monitorships