Money Laundering Prevention
Information for Clients
Money laundering is the concealment of the true origin of illegally obtained income. This illegal income is “laundered” into the legal economic and financial cycle. The problem is: money laundering operations are difficult to recognise as such. They are usually well disguised, not easily distinguishable from everyday transactions and often take place across borders. Therefore, not only banks and insurance companies are urged to be cautious. The Money Laundering Act (GwG) also requires lawyers to exercise certain duties of care when dealing with clients. This includes identifying the client, any persons acting on his behalf and the beneficial owner and keeping records and documents for five years. If you wish to obtain advice from a lawyer concerning
- the purchase and sale of real estate or commercial enterprises
- the management of money, securities or other assets,
- the opening or management of bank, savings or securities accounts, the raising of funds necessary for the formation, operation or management of companies,
- the formation, operation or management of trusts, companies or similar structures; or
- have the lawyer carry out financial or real estate transactions in your name and for your account,
then you are required under the Money Laundering Act
- to provide the necessary information (your name, place of birth, date of birth, nationality, address as well as identity card number and issuing authority) and permit the copying or optical digitisation of documents and records to be produced in the course of an identity verification,
- to disclose whether you are acting for yourself or possibly for a third party, the so-called beneficial owner,
- if you conclude one of the above-mentioned transactions for a beneficial owner, to provide also information on the beneficial owner’s identity, disclose the company name or designation, legal form, registration number, address of the registered office or principal place of business and the names of the members of the representative body or the legal representatives if you are acting for a legal entity or a partnership. You must substantiate your disclosures by means of an extract from the commercial register or a comparable official register or directory, by means of founding documents or equivalent evidential documents. In addition, you must allow the lawyer to copy or digitise these documents (by means of scans or a stored photograph) and
- to provide information about the purpose and intended nature of the business relationship.
Insofar as we hold a mandate for an investment fund of a capital management company (KVG), we are obliged to identify the investors behind the managed investment fund with more than 25% of the shares in the investment fund as beneficial owners. The same applies to a regulated KVG domiciled in other EU/EEA member states. If neither the KVG nor the investment fund are subject to regulation under local regulations, we may be subject to enhanced due diligence requirements.
This does not violate data protection. The Money Laundering Act explicitly requires the collection, verification and documentation of personal data for the purpose of identification. The identification card must therefore be copied or optically digitised. If you refuse to cooperate in the cases required by the Money Laundering Act, the lawyer may not conclude the mandate agreement with you.