Money laundering; appointment of a money laundering officer and a representative

The obligation to appoint an anti-money laundering officer depends on risk factors such as the area of activity or structure of the company, which could facilitate possible misuse for money laundering by third parties.

The German Money Laundering Act (Geldwäschegesetz - GwG) stipulates that obliged entities must take appropriate business and customer-related internal security measures to prevent money laundering and terrorist financing. These internal security measures include, in particular, the appointment of an anti-money laundering officer and their representative. The obligation to appoint an anti-money laundering officer or a representative exists either directly by law (Section 7 (1) sentence 1 GwG) or by order of the competent authority (Section 7 (3) GwG).

This order was issued in mid-August 2021 for all Bavarian administrative districts for commercial goods dealers whose main activity (more than 50% of total turnover in the previous financial year) is trading in precious metals such as gold, silver and platinum, precious stones, jewelry, watches, works of art, antiques, motor vehicles, ships, motorboats or aircraft, who employed a total of at least 15 employees in the areas of acquisition, cash register, customer accounting, sales and distribution including management personnel (in particular management) on the last day of the previous financial year and who were obliged under Section 4 para. 5 No. 1 GwG are obliged to have an effective risk management system in place.

The appointment of an anti-money laundering officer and a deputy or their dismissal must be reported to the competent authority in advance (Section 7 (4) sentence 1 GwG). We recommend using the forms that can be downloaded under "Forms" for the notification (notification of change/representation/release).

According to Section 7 (2) GwG, an exemption from the obligation to appoint an anti-money laundering officer can be applied for from the locally competent supervisory authority.

According to Section 6 (7) sentence 1 GwG, the obligated party may conclude a contractual agreement to transfer the duties of the anti-money laundering officer to a third party. The approval of the supervisory authority is not required for this. Rather, prior notification of the transfer is sufficient.

Information on the contractual requirements can be found under "Further links".

The obligation to appoint an anti-money laundering officer exists for

• obliged entities pursuant to section 2 (1) nos. 1 to 3, 6, 7, 9 and 15 GwG in principle (section 7 (1) sentence 1 GwG);
• obliged entities pursuant to section 2 (1) nos. 4, 5, 8, 10 to 14 and 16 AMLA only by order of the supervisory authorities (section 7 (3) sentence 1 AMLA);
• for obliged entities pursuant to Section 2 para. 1 no. 16 GwG, this order is effective mid-August 2021 for all Bavarian administrative districts for commercial goods traders whose main activity (more than 50% of total turnover in the previous financial year) is trading in precious metals such as gold, silver and platinum, precious stones, jewelry, watches, works of art, antiques, motor vehicles, ships, motorboats or aircraft, ships, motorboats or aircraft, where on the last day of the previous financial year a total of at least 15 employees were employed in the areas of acquisition, cash, customer accounting, sales and distribution, including management personnel (in particular management) and which are obliged under Section 4 para. 5 No. 1 GwG are obliged to have an effective risk management system (§ 7 para. 3 sentence 2 GwG);
• as the parent company of a group pursuant to Section 9 para. 1 sentence 2 no. 2 GwG or
• for group-affiliated obliged entities that have to implement group-wide obligations (Section 9 para. 4 GwG);

In all these cases, both the appointment and the dismissal of the anti-money laundering officer and his/her deputy must be notified in advance (Section 7 para. 4 GwG and Section 9 para. 1 sentence 4 and para. 4 GwG).

Competent supervisory authority for

• Financial companies (Section 2 para. 1 no. 6 GwG in conjunction with Section 1 para. 24 sentence 1 GwG)
• Insurance intermediaries (Section 2 (1) No. 8 GwG)
• Service providers for companies and trust assets or trustees (Section 2 para. 1 no. 13 GwG)
• Real estate agents (Section 2 (1) No. 14 GwG)
• Goods dealers and art brokers (Section 2 (1) No. 16 GwG)

is the Government of Middle Franconia for the administrative districts of Upper, Lower and Middle Franconia, Swabia and Upper Palatinate and the Government of Lower Bavaria for the administrative districts of Upper and Lower Bavaria (Section 50 No. 9 GwG in conjunction with Section 8a of the Competence Ordinance - Zuständigkeitsverordnung - ZustV).

The voluntary appointment of a money laundering officer as an "additional" internal security measure is possible without you being obliged to do so by the AMLA or a provision of the supervisory authority.