Why it is better to be safe than sorry – eCommerce Magazin

The Money Laundering Act in force in the EU has been in constant flux since 1991. In what is now the fifth edition, the guidelines have been changed, particularly when the so-called Panama Papers became known and in connection with the terrorist attacks in Paris and Brussels. A study by the University of Halle in 2016 showed that 100 billion euros are still laundered in Germany every year. The latest revisions therefore mainly expanded the group of obligated parties, but also saw another Increase in transparency in front.

The duty of care, primarily when using virtual currencies or in business relationships with high-risk third countries, is becoming significantly more stringent. The implementation of these extensions means a high bureaucratic effort for obligated companies, which can tie up some capacities. A clear prevention strategy and innovative software support are therefore all the more important.

Money Laundering Act: Risk Analysis in Companies

Risk management can be described as the first pillar within money laundering prevention and is mentioned in Section 4 of the Money Laundering Act. Obliged start with a Risk analysisin order to identify those positions in your own company that are susceptible to criminal activities – this includes the interface between analog and digital processes. In the next step, all departments should install clearly defined, internal security measures.

This includes, for example, the establishment of general principles, the appointment of a competent money laundering officer and a deputy and regular employee training for identification and Reporting suspicious processes. Decision-makers should proceed in a structured and careful manner when laying this basis, because the penalties for carelessness or deliberate non-compliance have been significantly higher since the last change: 100,000 to five million euros or even five percent of the total previous year’s turnover may be incurred depending on the severity of the violation.

Identification and copying obligation towards customers

The duty of care turns out to be the second cornerstone on the foundation of the Money Laundering Act. Obliged parties must know their customers exactly from the beginning of the contractual relationship – there is an obligation to identify and copy. In the case of natural persons, the business relationship begins with the recording of the classic personal details, while legal persons also have to submit the name of the company, the legal form and the personal details of the legal representative, for example by means of founding documents. The Money Laundering Act requires a Review of every transaction over 15,000 euros or closer inspection if there is sufficient suspicion of money laundering or the financing of terrorism. To simplify the later identification of criminals, there are extensive recording and retention requirements. Here, too, care and a flawless system are recommended.

Money Laundering Act: Courage made an obligation

With the innovation in money laundering, the banking secrecy, which has been well protected for many years, can be seen as finally fallen – it is moving in the direction of absolute transparency. Even the slightest suspicion of money laundering or terrorist financing is required to report to the Central Office for Financial Transaction Investigations (FIU). The refusal of disclosure by the business partner can also prove to be a decisive point. The indicators that point to money laundering also include: a large number of accounts, regularly high cash deposits, storage and carrying large amounts of money or that the business partner simply accepts poor conditions for investing the money without asking. In order to get an overview of these points, good employee training pays off again, because: more eyes see more.

Creating such a complex infrastructure naturally requires a large number of personnel and ties up time capacities. In addition, the probability of making mistakes – primarily when transferring data from the analog to the digital area – is immensely high, but at the same time also fatal. Companies can counter this problem with individually adapted scanning software: for example, existing multifunctional devices can be expanded with properties that convert static information on paper – for example from photo IDs or contract documents – into dynamic data for all further business processes.

Above all, the all-important recording and retention obligation can thus be guaranteed without errors: the software feeds the data of new customers directly from the paper into the systems used in order to ensure transparency in such processes. This not only saves the obligated a lot of work, but also avoids a number of unintentional violations of the Money Laundering Act – and that at the push of a button. (sg)

Money Laundering Act exapture
Myrko Rudolph is the managing director of exapture GmbH. (Image: exapture GmbH)

About the author: Myrko Rudolph is the managing director of exapture GmbH, an industry-independent software provider for intelligent printing and scanning solutions.

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