Key Points at a Glance
- Individuals should also keep the Anti-Money Laundering Act in mind: For payments over €10,000, the proof of origin requirement applies. The buyer must be able to demonstrate where the money comes from.
- Proof of the money’s origin can include: invoices, receipts, donation agreements, bank statements, etc.
- Reporting obligation: In cases of suspected money laundering, companies and individuals are obliged to report to authorities.
Table of Contents
A Brief Overview: The Anti-Money Laundering Act
The Anti-Money Laundering Act (GwG for short) was first passed in 1991. It is a central instrument in the fight against illegal financial transactions and financial crime, and it establishes rules to prevent money laundering and terrorist financing. Various institutions such as banks, insurance companies, and other industries are obliged to identify their customers, report suspicious transactions, and implement internal controls. The goal is to make financial flows more transparent and strengthen cooperation between authorities to detect and prevent criminal activities.
Is the Anti-Money Laundering Act also relevant for individuals?
The Anti-Money Laundering Act always first raises the question of the origin of the money in a transaction. In this context, it can happen that individuals and companies unintentionally violate the GwG. This can occur when products or services are purchased with cash or when cash is deposited into a current account. Above a limit of €10,000, the origin of the money must be verifiable. To ensure this, it is advisable to keep various proofs of transactions or other evidence of the money’s origin readily available. These include:
- Receipts for cash withdrawals from another bank
- Invoices and receipts
- Will, donation agreements, certificate of inheritance, etc.
- Current bank statements with details of cash withdrawals
What happens if I want to make a transfer over €10,000?
As soon as a transfer exceeds the sum of €10,000, your bank must send you a corresponding form in accordance with the provisions of the Anti-Money Laundering Act. You fill this out with your personal data and information about the transaction and send it back. In addition to the bank, the tax office may also ask questions about the transaction.
Reporting Suspected Money Laundering When Buying a Car
When buying a car, care should be taken to ensure that payment is not made with cash. If it does happen, strict regulations of the Anti-Money Laundering Act must be observed.
The law applies from a sum of €10,000. The seller is obliged to identify the buyer (checking the identification document) and to create a risk analysis. The aim must be to ensure that the money’s origin comes from legal sources. In the case of suspicious transactions, a report must be made to the competent authority (FIU).
Form for Identifying Natural Persons According to the Anti-Money Laundering Act
There is no uniform form for identifying natural persons according to the Anti-Money Laundering Act (GwG) that is used nationwide in Germany. The exact requirements and procedures can vary depending on the industry and type of business relationship. The identification obligations are regulated in various sectors, including banks, insurance companies, financial service providers, and other companies subject to the GwG.
At Nect, we have developed a tool that allows you to conveniently identify your customers online in compliance with the GwG. Contact us for a brief introduction to the product, and you can get started immediately.
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