Saturday, October 31, 2020

German Parliament introduce stricter anti-money laundering measures for estate agents, others

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The German Parliament on Thursday passed a raft of anti-money-laundering measures to bring the country in line with EU directives.

The reform packet imposes stricter regulations for real estate agents, notaries, precious metals dealers and auction houses to declare transactions to prevent money laundering and terrorism financing.

The laws still have to pass through the upper house of Parliament, the Bundesrat.

Real estate sector

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Notaries and real estate agents in the property sector will have to follow tighter rules to report suspected money laundering cases. This includes any lease of more that €10,000 ($11,024) per month.

In its annual report last year, the government’s Financial Intelligence Unit (FIU) noted an “extreme vulnerability” in Germany’s real estate market when it comes to dubious business deals and the investigation of criminal activities. The FIU found that of the 77,252 cases of money laundering in Germany last year, about 3,800 involved the real estate sector.

Anti-corruption group Transparency International found that about €30 billion in illicit funds were funneled into German real estate in 2017. It said criminal networks, particularly the Italian Mafia, had managed to exploit legal loopholes to launder money through properties in Germany.

Metals, auction houses and transparency registers

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The new rules will also require precious metal dealers to report suspicious activity of more than €2,000, from €10,000 previously. Regulations for art dealers will also be extended down the chain of control to warehouses, intermediaries and auction houses.

A transparency register will also make it more difficult for straw men to disguise the real ownership of companies.

In addition, the Financial Intelligence Unit will gain more power to identify and prevent money laundering. The aim is to prevent illegal money from entering the legal economic sector to finance terrorist networks and criminal networks.

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