Germany Update: Money laundering – a risk that should not be underestimated

In 2021, the Bundestag passed the Act to Improve the Fight against Money Laundering under Criminal Law. The impetus for this was provided by the EU’s 6th Anti-Money Laundering Directive (EU Directive 2018/1673). Comprehensively – and far beyond the requirements of the Directive – the criminal offence of money laundering in § 261 StGB has been redesigned. Critics speak of a “paradigm shift” in the fight against money laundering under criminal law (Dr. Nikolaos Gazeas NJW 2021, 1041) and see the revised § 261 StGB as an “all-purpose instrument” in the fight against crime (Prof. Dr. Jens Bülte Money Laundering & Law No. 01/2021).

The following article provides an overview of the significant changes and the resulting risks.

Extension of criminal liability through “all-crime approach”

In its old version, § 261.1 sentence 2 StGB provided for a comprehensive list of predicate offences. This meant that a suitable predicate offence could only be a crime or an offence defined in § 261 sec. 1 sentence 2 no. 2 StGB old version. With the new version of the standard, the so-called “all-crime approach”, this enumerative catalogue was completely deleted. Thus, in principle, every offense can now be considered as a money laundering predicate offence. This enormously increases the risk of criminal liability and prosecution of those involved in commercial transactions. Critics fear that an initial suspicion of money laundering could be used by the investigating authorities in the future as a “door opener” to locate so-called chance finds (Dr. Nikolaos Gazeas NJW 2021, 1041).

Risks for companies and all those involved in trade

The lack of selection not only leads to a potential criminalization of legal economic activities, but will also lead to constant mistrust within business relationships and processes, according to the Association of German Chambers of Industry and Commerce and Deutsches Aktieninstitut. For companies, the circle of predicate offences is no longer manageable. According to the Association of Chambers of Industry and Commerce, this means that companies will report any facts in case of doubt in order to avoid penalties (statement of the Association of German Chambers of Industry and Commerce of 07 September 2020, p. 3).

This is also made clear by the reformulation of § 261 sec. 9 StGB. Until now, acts carried out abroad could only be considered as a suitable predicate offence if the act was also punishable at the foreign crime scene (§ 261 sec. 8 StGB old version). The German legislator had to deviate from the mandatory requirement of double criminality due to the requirements of the EU Directive. Foreign acts can now lead to incrimination if they are unlawful under German law or if there is a criminal law obligation under EU law. As a result of the new regulation, transactions in third countries that are not subject to EU law may be punishable even if they were legal in the said third country.

Self-disclosure

In contrast to the draft bill of 11 August 2020, the revised money laundering offence also maintains the possibility of voluntary self-disclosure. In view of the massive expansion of the criminal offence, this possibility should not be underestimated.

What to do?

The review of one’s own risk management and compliance requirements is unavoidable. If necessary, compliance must be adapted to the risks of money laundering. For companies and entrepreneurs who have so far seen no reason for money laundering compliance, this circumstance can now potentially threaten their existence.

If you are unsure whether your risk management and compliance requirements are sufficient, seek legal advice. We are happy to help you with the review and further development.

By MELCHERS, Germany, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact germany@transatlanticlaw.com

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