13/03/2025
Recently, German financial regulator BaFin identified several areas for improvement in the fight against money laundering and terrorist financing during inspections of financial institutions. Despite the progress made, the risk of money laundering remains significant, mainly due to political tensions.
Common deficiencies encountered during an inspection are:
- No ongoing monitoring.
- No complete and sufficient documentation of business activities.
- Incomplete inventory of customers, products and structures.
- No structured identification and assessment of risks.
- No clear distinction of entity-specific risks and corresponding measures to prevent money laundering and terrorist financing.
- Storing identity documents in the system without origin marking.
BaFin stresses that a strong approach requires serious investments and well-organised AML-compliance. Anti Money Laundering Officers (AML officers) must be adequately resourced and supported by management. Institutions should also conduct thorough risk assessments, strengthen internal controls and regularly train their staff to identify suspicious transactions in a timely manner.
Close cooperation between financial institutions and regulators is therefore important. BaFin calls for further strengthening of anti-money laundering measures and continuous improvement to ensure the integrity of the financial system.
Read the full article on BaFin's website.
