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Money laundering prevention - notification of outsourcing of internal safety measures

As an obliged party according to the Money Laundering Act, you must take adequate internal business and customer-related measures to control and reduce risks of money laundering and terrorism funding, using suitable principles, methods and control processes.

You may also instruct a third party to handle such internal safety measures in the context of a contractual arrangement. However, you must inform the competent supervisory authority before outsourcing these tasks.

Internal safety measures include, for example:

  1. Drawing up internal principles, methods and control processes for handling money laundering risks,
  2. Compliance with reporting duties toward the Central Office for Financial Transaction Investigations (FIU) and compliance with customer due diligence duties such as identifying the contract partner and the economic beneficiary (see below ‘Further Information’ customer due diligence duties),
  3. Appointing an anti-money laundering officer and deputy,
  4. Reviewing trustworthiness of the company’s employees through suitable measures, in particular staff check and assessment systems,
  5. Initial and ongoing instruction of the company’s staff with regard to risks related to money laundering, current money laundering and terrorism funding methods, and relevant legal regulations and duties, including data protection rules that must be observed.
The ‘Fact sheet: Risk-based organisational measures’ (see ‘Further Information’ below) includes further comprehensive information and practical examples of internal safety measures.

Procedure:
  1. As an obliged party you must inform the Senate Department in charge of business matters about the specific internal safety measures you wish to outsource in advance.
  2. Your notification is reviewed by the competent authority.
  3. You will be informed when the process is complete.

Note:
As the obliged party, you continue to be responsible for the implementation of the internal safety measures. You will remain responsible if internal safety measures are not implemented properly, due to the fact that the third party does not fulfil its contractual duties.

Prerequisites

  • Obliged parties according to the Money Laundering Act
    Only the following natural and legal entities are eligible to submit an application:
    1. Financial enterprises in the sense of § 1 section 24 of the Money Laundering Act (GwG, obliged pursuant to § 2 section 1 item 6 GwG)
    2. Insurance consultants based abroad, provided that they operate branches in Germany (obliged pursuant to § 2 section 1 item 8 GwG)
    3. Service providers for companies and trust property, and trustees that perform the specific service for third parties indicated in § 2 section 1 item 13 GwG (obliged pursuant to § 2 section 1 item 13 GwG)
    4. Real estate agents (obliged pursuant to § 2 section 1 item 14 GwG)
    5. Bookmakers in the sense of § 2 section 1 of the Race Betting and Lottery Act (RennwLottG, obliged pursuant to § 2 section 1 item 15 b GwG)
    6. Goods traders, art agents and art store keepers, provided that storage takes place in duty-free areas (obliged pursuant to § 2 section 1 item 16 GwG).
  • Authorised representative
    The person submitting the application must be a member of the company management or the company’s internal/external anti-money laundering officer.
  • Suitability of the third party
    The third party must meet the following criteria to perform the internal safety measures:
    • be sufficiently qualified and reliable,
    • guarantee that the safety measures will be implemented properly, and
    • outsourcing must not affect the obliged party’s control options and the supervisory authority’s monitoring activities.

Documents required

  • Notification of the intention to outsource internal safety measures
    • You can submit the notification in text form either by mail or electronically.
    • In your notification you must explain plausibly that the third party is qualified and specify the measures you want to outsource.
  • Evidence of eligibility to submit an application
    • evidence of appointment as anti-money laundering officer, or
    • outsourcing contract for internal safety measures, or
    • evidence that the person submitting the application is a member of the company management (e.g. excerpt from the Trade Register or partnership agreement)
  • Evidence of the third party’s qualification
    The third party must be sufficiently qualified for performing the safety measures. They must present:
    • their curriculum vitae detailing their professional activities in tabular form, and
    • confirmation of participation or certificates for attended training courses or similar qualification measures.
  • Certificate of good conduct for presentation to an authority
    To verify personal reliability, a certificate of good conduct for presentation to an authority (criminal record) is needed for the third party. This certificate must be no older than 3 months. When requesting the certificate, please indicate ‘outsourcing of internal safety measures according to the GwG’ as the purpose.
    The Federal Ministry of Justice also offers an online procedure for requesting the excerpt. (see ‘Further Information’).
  • Excerpt from the central business register for presentation to an authority
    To verify personal reliability, an excerpt from the Commercial Central Register for presentation to an authority is needed for the third party. This certificate must be no older than 3 months. When requesting the excerpt, please indicate ‘outsourcing of internal safety measures according to the GwG’ as the purpose.
    As a private individual residing/registered in Berlin, you can request an excerpt from the Commercial Central Register for presentation to an authority by visiting any Citizens’ Office in Berlin.
    Legal entities based in Berlin can request the excerpt from their competent public order office.
    The Federal Ministry of Justice also offers an online procedure for requesting the excerpt. (see ‘Further Information’),
  • Contract with the third party
    Copy of the contract concluded with the third party to which the safety measures are to be outsourced.
  • Up to date excerpt from the Trade Register, if applicable
    Registered companies are required to submit an up to date excerpt from the Trade Register when applying. Legal entities that are in the process of being established (GmbH, AG) are required to submit their partnership agreement or statutes.

Fees

  • none
  • EUR 138.00 to EUR 1,380.00, depending on the administrative effort, in the event that outsourcing is prohibited

Responsible authorities

Members of the group of enterprises listed above (see ‘obliged parties according to the Money Laundering Act’) who are based in Berlin, can submit their notification regarding the outsourcing of internal safety measures to the Senate Department in charge of business matters.

Senatsverwaltung für Wirtschaft, Energie und Betriebe