Germany Proposes New Money Laundering Combating Act to Implement EU AML Package

Germany’s Federal Ministry of Finance published a draft bill on 28 October 2026 proposing a comprehensive overhaul of the country’s anti-money laundering framework. The proposed legislation, known as the Money Laundering Combating Act (Geldwäschebekämpfungsgesetz – GwBG), is intended to implement the EU’s 2024 Anti-Money Laundering Package and replace Germany’s existing Money Laundering Act (Geldwäschegesetz – GwG).

The reform forms part of the EU-wide transition towards a more harmonised framework for preventing money laundering and terrorist financing. The package comprises the Sixth Anti-Money Laundering Directive (AMLD6), the directly applicable Anti-Money Laundering Regulation (AMLR), the regulation establishing the European Anti-Money Laundering Authority (AMLA), and amendments to the EU framework governing access to financial information.

Under the proposed approach, many substantive obligations currently contained in German national legislation, including customer due diligence, risk management and suspicious transaction reporting, will primarily be governed by the directly applicable AMLR. The new German legislation will focus on implementing the provisions requiring national measures, organising supervisory responsibilities, strengthening the Financial Intelligence Unit (FIU) and improving access to financial and ownership information. The draft also makes use of certain national options available under the EU framework.

One of the principal changes concerns the scope of businesses subject to AML obligations. From 10 July 2027, the definition of obliged entities will be based primarily on Article 3 of the AMLR. This will bring additional categories of businesses within the regulatory framework, including crowdfunding service providers and intermediaries, as well as non-financial mixed holding companies. Certain activities currently covered by German national legislation will become subject to a narrower scope, including some trading activities and entities such as central counterparties.

Germany also intends to retain AML obligations for certain categories of businesses through national discretion permitted under the Sixth Anti-Money Laundering Directive. These include specific institutions conducting deposit-taking activities, certain financial instrument underwriting activities and providers of qualified crypto custody or crypto securities registry services. The draft also allows exemptions for certain entities carrying out financial activities only occasionally or on a very limited scale.

The proposed legislation introduces changes to the requirements applicable to Money Laundering Reporting Officers (MLROs). Under the current German framework, obliged entities are generally required to appoint both an MLRO and a deputy. The draft no longer expressly requires the appointment of a deputy MLRO, reflecting the fact that the EU framework does not establish such a general requirement. Supervisory authorities would nevertheless retain the power to require an entity to dismiss a deputy where appropriate.

The requirement for the MLRO to perform the function physically in Germany would also be removed. This could be particularly relevant for financial institutions and branches operating across the European Economic Area, as it would provide greater flexibility in organising compliance functions at group level. The draft retains the obligation to notify the supervisory authority in advance of the appointment of an MLRO.

A further significant development concerns the expansion of automated access to financial account information. Germany's existing system under Section 24c of the Banking Act requires credit institutions to maintain specified information about accounts, securities accounts, safe-deposit boxes, account holders and authorised persons. The proposed amendments would substantially expand the information available through the system, incorporating the full identification data required under the AMLR and extending coverage to virtual IBANs and crypto-asset accounts.

The changes would also broaden access to the information for competent supervisory and enforcement authorities, including AMLA. In addition, Germany intends to connect its national account information systems to the EU-wide Bank Account Registers Interconnection System (BARIS). This would enable authorised authorities and Financial Intelligence Units across participating jurisdictions to query relevant information through a more interconnected framework. Standardised technical formats for transmitting transaction data to law enforcement authorities are also envisaged.

The supervisory structure would undergo further changes through the establishment of a Central Coordination Office for AML Supervision (Zentrale Koordinierungsstelle Geldwäscheaufsicht – ZKGw) within the Federal Financial Supervisory Authority (BaFin). The office would coordinate cooperation between the numerous authorities responsible for AML supervision across Germany, support consistent interpretation of regulatory requirements and facilitate interaction with AMLA.

The new office would not itself become a supervisory authority and would not have powers to issue instructions to the other supervisory bodies. Responsibility for supervising individual obliged entities would remain with the competent authorities. BaFin would continue to supervise financial-sector entities, except for institutions selected for direct supervision by AMLA under the EU framework.

The draft also provides for certain payment institutions, electronic money institutions and crypto-asset service providers operating cross-border in Germany to be required to appoint a central contact point in the country. This contact point would act as the link with BaFin and be responsible for ensuring that the relevant AML requirements are observed.

The FIU would receive additional powers to address potentially suspicious financial activity. Under the proposed framework, it could require an obliged entity to monitor specified transactions or activities conducted through bank, payment or crypto-asset accounts, or other business relationships, where significant money laundering or terrorist financing risks have been identified. The institution could then be required to report the results of that monitoring to the FIU.

The draft also proposes changes to the period during which the FIU may prohibit a transaction. The maximum period would be reduced from the current one-month period to ten working days, or five working days where the prohibition concerns the use of an account or business relationship. The proposed framework would align these periods with the limits provided for under the Sixth Anti-Money Laundering Directive.

Enforcement measures would also be strengthened. The draft provides for increases in certain maximum administrative fines, while retaining the possibility of fines based on up to 10% of an entity's total annual turnover. It also introduces periodic penalty payments of up to 3% of average daily net turnover, intended to encourage compliance with supervisory requirements and ensure that identified deficiencies are addressed.

Germany's Transparency Register would receive expanded verification responsibilities. In addition to checking the accuracy of beneficial ownership information submitted by companies and other registered entities, the register would be required to verify whether registered entities or their beneficial owners are subject to EU financial sanctions. The measure is intended to improve the quality of ownership information and strengthen the connection between beneficial ownership transparency and sanctions enforcement.

Access to real estate ownership information is another area targeted by the reform. By 10 July 2029, Germany plans to establish a central access point allowing competent authorities, particularly law enforcement agencies, to obtain digital information on property ownership, encumbrances, purchase prices and related records. The initiative is intended to overcome the fragmented nature of existing property information, which is currently held across decentralised systems.

The legislation will also introduce the EU-wide €10,000 limit on cash payments in commercial transactions from 10 July 2027. Germany does not currently have a general cash payment ceiling, although cash payments in real estate transactions are already prohibited. The government does not intend to introduce a lower national threshold, while the existing prohibition on cash payments for property transactions will remain in place.

The draft bill is currently undergoing consultation, with interested stakeholders invited to submit comments by 19 November 2026. The government is expected to consider the proposal before the end of the year, after which it will proceed through the formal legislative process. The intended application date is 10 July 2027, corresponding with the application of the EU Anti-Money Laundering Regulation.

For banks, payment institutions, crypto-asset service providers, corporate service providers and other obliged entities, the proposed changes will require a review of existing compliance arrangements. Particular attention will be needed in relation to the revised scope of obliged entities, MLRO arrangements, account-information systems, reporting procedures and supervisory requirements. The expansion of accessible financial and beneficial ownership information will also increase the importance of accurate customer data and effective internal recordkeeping.

Although many core AML obligations will become directly applicable under the EU regulation, the proposed German legislation will determine how these requirements are implemented and supervised nationally. Businesses operating in Germany should therefore monitor the legislative process and begin assessing the operational and technological changes that may be required before the new framework takes effect.

By fLEXI tEAM