New guidance on Suspicions Activity Reporting in the fight against Money Laundering

The obligation to report suspicions is a central component in the fight against money laundering and terrorist financing and is one of the main obligations of the GwG. Violations of the reporting obligation can be sanctioned with significant fines.

A crucial element in assessing whether a reportable incident has occurred is the determination of specific indications that point to the circumstances mentioned in Sec. 43 (1) of the GwG, namely money laundering or terrorist financing. It is important to note that suspicious activity reports are not criminal charges and therefore do not require initial suspicion within the meaning of the German Code of Criminal Procedure (Sec.152, 160 StPO). This was confirmed by the Federal Constitutional Court (BVerfG) in a chamber decision of 31 January 2020 (2 BvR 2992/14), which considers the threshold for a report of suspicion to be reached if there are objectively recognisable indications of a criminal background.

The guidance particularly highlights the vague terms ‘promptness’ and ‘completeness’ of suspicious activity reports, which often raise questions in practice. ‘Promtness’ means ‘without culpable delay’ and therefore generally requires immediate and direct reporting to the FIU. In the absence of generally applicable rules or even specific deadlines for the promptness of reporting a suspicion, each case must always be considered individually. BaFin and the FIU have therefore published their considerations for determining whether the conditions of Sec. 43 (1) sentence 1 GwG have already been met in a kind of decision tree with the guidance. In principle, reports of suspicions should be made on the same day, or at the latest on the following working day, provided, that facts within the meaning of Sec. 43 (1) GwG are available in such a way that the report of suspicion is comprehensible and self-explanatory for the FIU.

A report is considered ‘complete’ if all relevant facts that indicate possible money laundering or terrorist financing are transmitted to the FIU. This is to ensure that the FIU can conduct its thorough analysis and, if necessary, forward the information to the law enforcement authorities.

For the work of the FIU, every single relevant piece of information must be fully recorded in the reporting form or the XML schema of goAML.

The joint guidance draws on the existing interpretation and application notes (AuA) of BaFin as well as the general requirements for the presentation of the facts of the FIU and serves as a supplement to these requirements. It recommends that in case of doubt, a report of suspicion should always be submitted.