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Germany Unveils Details Of AML Law

by Ulrika Lomas,, Brussels

08 April 2011

The German Finance Ministry has recently published details of the new anti-money laundering law (das Schwarzgeldbekämpfungsgesetz), which strengthens existing rules on voluntary disclosure.

In accordance with the new law, in future immunity from prosecution will only be granted provided that information on all assets qualifying for tax is “completely and accurately” given during the voluntary disclosure. As a result, individuals providing only “piecemeal” information will not be granted immunity.

The timeframe for submitting voluntary disclosures is also to be amended under the new rules. Currently, individuals will still avoid prosecution if their voluntary disclosure is submitted to the German tax authorities at the beginning of an investigation. In future, however, individuals will only be granted immunity if the voluntary disclosure is submitted prior to the issue of a written notice.

According to the Finance Ministry’s statement, given the significant number of voluntary declarations which followed in the wake of recent tax data disc revelations, there was a need for the government to define an amount in excess of which the voluntary disclosure no longer grants automatic immunity.

Consequently, individuals with undeclared assets in excess of EUR50,000 will be required to pay a 5% surcharge on the undeclared sum, in addition to the back payments of taxes and interest.

In addition to the changes in the criminal tax law, the ministry has also confirmed changes to the offence of money laundering in the penal code, in a bid to strengthen Germany as an economic location and to offer more effective protection against money laundering and the financing of terrorism.

Consequently, in accordance with the Financial Action Task Force On Money Laundering’s international standards, market manipulation, insider trading, and piracy are all considered predicates of money laundering.

Adopted by the German Bundestag, or lower house of parliament, on March 17, the anti-money laundering bill is due to be examined by the Bundesrat or upper house of parliament on April 15, with the aim that the new law then enters into force in Germany in May.

TAGS: individuals | money-laundering | tax | business | interest | law | enforcement | Germany | standards | penalties

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