Money Laundering Prevention: Government Requirements and Social Responsibility

Regardless of whether it's corruption, tax evasion or robbery: When people acquire money illegally, they often seek ways to inject it into the regular financial cycle. Legal transactions often serve as a bridge to conceal its criminal background. This approach is not new: As early as 1929, mafia boss Al Capone succeeded in “washing away” his wealth acquired through extortion of protection and other criminal activities through investments in laundromats. This concealment technique was subsequently imitated by numerous imitators and continued to gain momentum as a result of the globalization of financial markets. Even though the actual extent of this international phenomenon is difficult to determine, estimates assume that money laundering transactions are carried out annually in the amount of between 500 billion and up to two trillion US dollars. In Germany alone, their annual volume is likely to amount to around 100 billion euros. Germany is particularly popular as a location for money laundering. Germans are not only characterized by their general love for cash transactions, they can also process them in any amount. While in some neighboring European countries, cash transactions are significantly restricted by limits of a few hundred to a thousand euros, in Germany even cars and real estate are paid for with cash. Since this not only results in significant tax losses, but money laundering primarily finances organized crime and promotes crimes such as human trafficking and terrorism, government measures have been introduced to prevent money laundering.

The Money Laundering Prevention Act poses challenges for companies

The Money Laundering Prevention Act, which came into force in Germany in 2017, is intended to make illegal transactions more difficult and thus ideally prevent them. Some sectors of the economy are naturally more likely to be affected by money laundering than others. Accordingly, banks, insurance companies, real estate agents, casinos, goods dealers and financial service providers in particular must deal with the regulations of the preventive money laundering law. The number of regulations to be observed has risen from 17 to 59 as a result of the legislative amendment from 2017. As part of a special due diligence obligation, affected companies must carefully check their business partners in order to be able to identify money laundering as early as possible. This includes, for example, an identity check, which prevents anonymous transactions, as well as a check as to whether corresponding contractual partners act for beneficial owners. Should there be any suspicion, companies are required to report this to the Central Office for Financial Transaction Investigations.

In order to be able to meet these requirements reliably, appropriate structures must be created within the company and employees must be trained, for example. This is costly and risky: Violations of government requirements may result in fines of up to 100,000 euros for the first infringement, or up to 5 million euros or up to 10% of the previous year's turnover in more serious cases.

Automated money laundering prevention reduces administrative effort with maximum transparency

The payment management platform bezahl.de works with numerous cooperation partners who are affected by the Money Laundering Prevention Act and must invest a lot of money and time in implementing it. By using cutting-edge technology, the Cologne-based start-up has succeeded in optimizing all processes relating to the internal money laundering prevention of companies: Processes are simplified and digitized, thus minimizing administrative costs. By automatically comparing the name and country of origin of the contract partners and payment senders, the process guarantees efficiency and convenience. Companies only have to deal with suspicious cash receipts, which significantly simplifies conscientious compliance with government requirements and significantly reduces administrative burdens. Although the software from bezahl.de cannot provide legal guarantees for its customers, it can create maximum transparency.

If the money laundering prevention check from bezahl.de could also be considered for your company, arrange a individual product presentation.