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Created on Friday, 23 January 2009 16:21

Last Updated on Saturday, 22 December 2012 18:51

Stricter Law against Money Laundering, Now Including Consultants

Previously, only banks in addition to financial services had to have a "professional mistrust"  towards those paying cash. Now it's almost everybody, who can receive larger payments in fees or sales payments.

The German Bundestag adopted on June 19, 2008, with some delay, a statute to combat money laundering and the financing of international terrorism, and tightened the previously existing law. The relevant EU directive, which was passed years ago, had actually already should have been adopted as national law by the end of 2007.

Now anybody receiving a cash transaction of more than € 15,000 is obliged to check the identity of the payer (§3 GWG). This can be lawyers, jewelers, tax consultants, art dealers, real estate vendors, etc. When the payer seems suspicious, this must be reported to the authorities.

So when you are to receive such larger payment, make a copy of the payer's ID and store it with your tax records. When keeping in your tax records, you can easily retrieve it again were it to be demanded by the authorities. On the other hand, when your rich uncle (Dagobert) give you a gift of €20,000, you will not be obligated to report this to the authorities but just keep and mention it in your gifts tax return.

To which authority are you to report? The district attorney (Staatsanwaltschaft) in your vicinity and a copy is to go to Federal Criminal Police Office (Bundeskriminalamt - Zentralstelle für Verdachtsanzeigen). They will expect your report either in writing, orally in person or per phone. When you have a suspicious transaction that will take place, then it may only occur after the district attorney has given his okay or when two days after reporting have elapsed without the district attorney banning the transaction (§11 I GWG).

When you do not take sufficient care in identification or correctly report suspicious cases, you can be fined up to € 100,000 (§17 GWG). In German, this is called "Ordnungswidrigkeit".