Money Laundering Prevention in Companies: Obligations under the Money Laundering Act (GwG) for SMEs

The Money Laundering Act no longer only affects banks. Real estate agents, goods dealers, tax advisors, and many other companies are subject to comprehensive due diligence, reporting, and documentation obligations. Violations can be punished with significant fines.

Legal Status: March 2026

Category: Business Law, Compliance, Money Laundering Prevention

Content

1. What is Money Laundering?

2. Who is Obligated under the GwG?

3. General Due Diligence Obligations

4. Enhanced and Simplified Due Diligence Obligations

5. Risk Management and Internal Safeguards

6. Recording and Retention Obligations

7. Suspicious Activity Reporting via goAML

8. The Transparency Register

9. Sanctions for Violations

1. What is Money Laundering – and How Does it Work?

Money laundering refers to the concealment of assets derived from criminal activities. The goal is to introduce illegally obtained funds – such as from drug trafficking, extortion, or arms trading – into the legal economic cycle and to hide their criminal origin.

Money laundering is punishable as an independent criminal offense – regardless of the underlying predicate offense. The penalty ranges from three months to five years imprisonment, in particularly serious cases (e.g., commercial or organized money laundering) up to ten years.

Typically, money laundering occurs in three phases: placement, layering, and integration.

2. Who is Obligated under the GwG?

The GwG assigns active monitoring and reporting obligations to a wide range of companies and professional groups. The circle of so-called obligated parties has been continuously expanded in recent years and includes, among others, credit and financial services institutions, lawyers, auditors, real estate agents, goods dealers, and many others.

3. General Due Diligence Obligations

3.1 Identification of the Contractual Partner (KYC)

The GwG obligates all obligated parties to know their business partners. This so-called KYC principle (“Know Your Customer") requires determining and verifying the identity of the customer when establishing a new business relationship. In existing business relationships, this information must be updated at appropriate intervals.

3.2 Purpose and Nature of the Business Relationship

In addition to the identity of the contractual partner, the purpose of the business relationship must also be clarified – particularly whether there is a private or business background. This can be done through standardized identification questionnaires.

3.3 Determination of the Beneficial Owner

A beneficial owner is considered to be any natural person who directly or indirectly controls more than 25% of the capital shares or voting rights of a company.

4. Enhanced and Simplified Due Diligence Obligations

Enhanced due diligence obligations and simplified due diligence obligations are applied depending on risk factors.

5. Risk Management and Internal Safeguards

Companies must create a company-specific risk analysis and implement internal safeguards.

6. Recording and Retention Obligations

Obligated parties must record and retain information about contractual partners, transactions, and business relationships.

7. Suspicious Activity Reporting via goAML

If there are indications of money laundering or terrorist financing, this must be reported immediately without informing the affected customer.

8. The Transparency Register

In the transparency register, companies must provide information about their beneficial owners. Reporting companies must submit first and last name, date of birth, nationality, and other information.

Finally, companies are urged to take money laundering prevention seriously and to diligently comply with all legal requirements to avoid fines and penalties.