New Obligations for Attorneys under German Anti-Money Laundering Act

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Wednesday, January 1, 2003
Florian Hauswiesner
Despite vehement criticism by the German Bar Association, the new Anti-Money-Laundering Act (hereafter German AML Act) became effective in its main parts on August 15, 2002, after its approval by the Bundestag (House of Representatives) and the Bundesrat (Federal Council). These persons are obligated to identify their clients and to identify any person from whom they receive cash securities or precious metal, if it is worth at least $15,000, or even if the sum of several financial transactions add up to $15,000. These obligations have to be fulfilled if they concerned persons participate in the following matters: a) purchase and sale of real estate; b) managing of money, securities or other assets of the client; c) opening or managing of banks, savings, or securities accounts; d) founding or managing of trust companies, corporations or similar structures and if financial and real estate transactions occur in the name of the client. The most dramatic change for attorneys as a result of this bill will be, without a doubt, that lawyers are now obligated to file a suspicious transaction immediately if the advice requested by the client concerning a transaction aforementioned is suspicious of a money-laundering activity according to 261 of the German penal code. The persons covered by the German AML act must also report to the competent law enforcement agencies and send a copy to the Bundeskriminalamt (BKA). Therefore, insofar as an attorney is covered by the German AML Act, his or her confidentiality obligation according to German attorney?s rules concerning his clients are superseded. As Germany is one of the first member states of the European Union to implement to so-called money laundering directive it will be interesting to see how the new German AML aAct affects not only the work like of an attorney in Germany but also everyone doing business in Europe.