BaFin orders notice on all Iran and North Korea business

Published

May 13 2020

Written By

As co-head of the global Finance & Financial Regulation Practice Groups and head of the German Finance & Financial Regulation Practice Group, I advise on national and international finance and capital markets law as well as on commercial and corporate law. I am also a member of the international steering group of our Financial Services Sector Group.

Practices

Finance & Financial Regulation

Countries

Germany

The German Federal Financial Supervisory Authority (BaFin) issued a general decree demanding written notice of all business and transactions conducted in connection with Iran or North Korea. Taking effect on 14 Mai 2020 all obliged entities in the sense of section 50 No. 1 of the German Anti-money Laundering Act (Geldwäschegesetz – GWG) and all insurance businesses supervised by BaFin according to section 2 paragraph 1 No. 7 GWG must immediately provide such a notice for which BaFin encloses a standardized form.

The notice must include an indication of an existing business relationship or a past transaction in connection with legal or natural persons.

The decree is effective next to existing domestic, European and UN-Security Council measures to combat money laundering, terrorist financing and proliferation financing. According to BaFin this step became necessary as a countermeasure after the Financial Action Task Force (FATF), during its plenary session in February 2020, found North Korea and Iran negligent in the fulfilment of their duties.

The Financial Action Task Force is the independent international organization tasked to monitor money laundering, terrorist financing and proliferation financing. Germany is a member since its foundation in 1989. The FATF has since become the most important agency in its field and issues widely regarded codes of conduct and sets standards for effective anti-money laundering, anti-terrorist financing and anti-proliferation financing measures.