The obligation to report suspicions was previously regulated in Section 43 (1) of the Money Laundering Act (GwG). In future, it will now be regulated in Art. 69 para. 1 subpara. 1 lit. a) EU AML Regulation. This provision stipulates that a suspicious activity report must be submitted immediately to the FIU if there is a suspicion or reasonable grounds to believe that:
- Funds or activities with proceeds of criminal activity,
- funds or activities involving terrorist financing or
- Funds or activities involving criminal activities
are connected. These three categories of circumstances require closer examination.
1. reporting facts
The first issue provides for a reporting obligation for cases in which funds or activities are linked to proceeds from a predicate offence (the "criminal activity"). In principle, criminal activities are exhaustively defined in the European provisions of the Regulation (with reference to other directives). However, recital 6 of the EU AML Regulation states that the term "criminal activities" should also include further or any kind of involvement in criminal offences that are considered a predicate offence to money laundering under national law. In Germany, any unlawful act can be a predicate offence to money laundering ("all-crimes approach"). It remains to be seen whether this will be maintained in Germany and whether the AMLA will also take the view that this should then also be taken into account in the EU AML Regulation. Should this be the case, the first reporting circumstance will not result in any significant changes compared to the reporting offence under Section 43 para. 1 sentence 1 no. 1 AMLA.
2. reporting facts
The second reporting situation under the EU AML Regulation also does not provide for any substantive changes to the previous legal situation under the AMLA. A report must also be submitted if funds or activities are associated with terrorist financing. This must already be reported today (see Section 43 para. 1 sentence 1 no. 2 AMLA).
3. reporting facts
The third reporting circumstance, on the other hand, is completely new and represents a paradigm shift (Art. 69 para. 1 subpara. 1 lit. a) EU AML Regulation). Accordingly, a reporting obligation exists if there is a suspicion that funds or activities are merely connected to a criminal activity. It is therefore sufficient that there is a suspicion that the customer intends to use or has already used legal assets for illegal purposes. Assets from a predicate offence - as is necessary for money laundering - are no longer a prerequisite here. For example, a suspicion of fraud - without a suspicion of money laundering or terrorism - is also subject to reporting.
The third reporting circumstance also covers activities that are related to criminal activities. Activities should at least be understood as those of a contractual partner or third party if they are directly related to products or services of the obligated party (e.g. activities when concluding a contract or when using the product, etc.). A broad interpretation of the term activities could otherwise lead to a de facto obligation to report many offences that are not related to the obligated party's products and services. This would present obliged entities with a task that would be difficult to fulfil in practice.
FIU as addressee of the suspicious activity report
For all of the above-mentioned situations, the addressee of the suspicious activity report is still the respective national Financial Intelligence Unit (FIU). Until now, the form in which transactions are reported to the national FIU can differ depending on the member state. In future, the new EU Anti-Money Laundering Authority (AMLA) is to develop a standardised reporting form for reporting suspicious transactions. It remains to be seen whether the current reporting channels (goAML) in Germany will be retained (although nothing to the contrary is known to date). A standardisation of reporting systems in Europe is to be welcomed.
Conclusion
It therefore remains to be seen what the suspicious activity reporting obligation will look like in practice and how certain definitions will be interpreted by the AMLA and national supervisory authorities. However, one thing is certain: it is advisable to familiarise yourself with the upcoming changes now.
For further information on this topic, please refer to the publication "The suspicious activity reporting obligation under the EU Money Laundering Regulation" by Dr Lars Haffke provides more detailed insights.
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