Mandatory Transparency Register And Money Laundering Prevention

Mandatory Transparency Register And Money Laundering Prevention

Either an ordinary individual or a rich businessman, he’d always choose to be decent because he has a family waiting for him. This is why we tried our best to study and have a career since that’s something to be proud of. As much as possible, we’d like to be a part of trustworthy companies in Germany and spend comfortable lives without risking anything.

We should stay away from organizations that will teach us to do all sorts of misconduct because these contradict our goals as law-abiding citizens. Thus, if we have commitments in our families, workplaces, and local government, then let’s settle them sensibly. In this way, we won’t have to hide from the law and can face everybody with our heads up.

If you have ownership of certain assets for transparency registrations, then check out to seek information and legal advice about your obligation. You’re required to submit a report regarding corporate finances and the people involved in your institution. In this way, we can help in preventing various forms of money laundering in Germany and protect our companies.

Money laundering and Finance Terrorism

To succeed in the business industry, you have to avoid engagements with capitalists who are previously linked to illegal activities. Keep in mind that you invested your money in stocks or company shares, thus, this shouldn’t be wasted. That’s why you must consider the reputation of a particular company, especially when you’re managing this.

The main goal of money laundering is to make a profit from various misconducts. So it would be different from raising illicit funds for future illegal activities which refers to terrorism financing. I supposed finding the source would be tough, thus, the authorities will have to find a way to catch them.

Fighting this kind of lawbreaking act isn’t easy because large sums are usually involved. Entrepreneurs are often threatened and abused so detecting the organization leading this would be challenging. That’s why the government started implementing resolutions to stop their undertakings.

The Federal Financial Supervisory Authority

Bundesanstalt für Finanzdienstleistungsaufsicht or BaFin is an institution under the Federal Ministry of Finance. Their goal is to prevent numerous criminal offenses that threaten the assets or finances of a certain organization in Germany. They supervise companies engaging in different financial services, such as banks, credit cards, insurance, e-money, and lending to name a few.

They need to make sure that the corporations under their administration follow mandatory requirements, such as a transparency register. These obligations are instigated due to some laws such as the Money Laundering Act or  Geldwäschegesetz – click   for more details. 

This institution was given a tough task since its responsibility to certify the honor of financial systems is huge. Managing consumers’ and providers’ financial accounts, as well as, its safety is such a big responsibility. This is why they also need to follow the Banking Act as a tool for money laundering prevention.

Mandatory Transparency Register And Money Laundering Prevention

Transparency as an Aid in Avoiding Risks

The risks related to businesses and finances are already determined, that’s why precautions were defined. One of these is through the mandatory transparency registry which must be processed and accomplished by covered sectors. Thus, those with obligations must deal with the risk management concerns illustrated through Geldwäschegesetz or GwG.

Again, this isn’t only about identifying beneficial owners and associates but the customers as well. Monitoring all parties will be constant to ensure that the obtained information won’t be used in unlawful practices.  I supposed this could be the reason why annual updating of the records must be performed.

Individuals, associates, and organizations with suspicious transactions can be subject to investigations. Such cases will be forwarded to the Financial Intelligence Unit which is under Central Customs Authority.  You may check on GwG section 43 if you’d like to learn more about this duty – this website will be helpful.

Due Diligence

You might not be aware that you’re already in jeopardy of the ML and TF in your country. If the risk level is low, then you must take action for a preliminary assessment. You may go over the risk factors from the GwG stated in Annex 1.  

However, if the parties involved were suspected of high-level ML and TF risk, they must comply with enhanced due diligence evaluations. The risk factors to be considered are defined in Annex 2. I guess this isn’t the only measure you’d take, so it’s better to discuss this with your legal adviser.

Electronic Account Retrieval System

According to Kreditwesengesetz or KWG of section 24c, BaFin may also supervise the access of records on automated accounts. For example, when law enforcers requested information on suspected financial terrorists, they can be granted permission. If conditions for these demands aren’t met, then they’re not allowed to obtain any data.

This request is made for the purpose of identifying and obtaining information on the suspects. The report will be sent to the authorities who are asking for it. Once the accounts were disclosed, they’ll freeze them and can’t transact with banks because they’re prohibited.

In my opinion, this is a very important step in finance-related crimes. The parties involved could still be suspects and with frozen accounts, they can’t make a move while under investigation. Thus, helpful in preventing ML and TF that may be targeting foreign investors, where BaFin works with the FAFT or AMLC.

Transparency Register

This was first announced in 2017 for company structures, particularly ownership to be transparent. Let’s assume that you invested in an organization, but you weren’t registered. This could mean that you’re not a recognized shareholder or they must have used your funds criminally.

It only shows that you’re hidden for some reason. However, a transparency register is obligatory, so your company may be involved in ML and TF without your knowledge. With the help of legal experts and an enhanced registration system, you can report this situation.

The authorities in charge will be needing your statement. In this way, they can investigate the circumstance and eradicate criminal practices.

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