07 December 2021

In the past year 2020, there was a total of 144,000 suspicious money laundering reports, an increase of approximately 25 percent in the total number of reports compared to the previous year (2019). This was revealed by the 2020 annual report published by the Financial Intelligence Unit (FIU).

Last year, the number of SARs received from notaries, who belong to the obligated groups in the non-financial sector, was striking. While only 8 and 17 SARs were submitted by notaries in the previous years 2018 and 2019, respectively, this number increased to a total of 1,629 SARs in 2020. Notaries are thus the obligated party group with the highest percentage increase in 2020 (9,400%).

What is the reason for this enormous increase?

The massive increase in the number of suspicious activity reports submitted by notaries is directly related to the entry into force on October 1, 2020 of the Ordinance on Facts and Circumstances Subject to Reporting in the Real Estate Sector under the Money Laundering Act (GwGMeldV-Immobilien). The GwGMeldV-Immobilien reinforces the reporting obligations of certain professionals, including notaries, in transactions involving real estate. These are obliged by the GwGMeldV-Immobilien to report to the FIU any conspicuous facts that indicate a possible connection with money laundering. Other obligated parties who must report suspicious circumstances under the GwGMeldV- Immobilien include lawyers, tax advisors, auditors, patent attorneys and real estate agents. Although the increase in the number of reports submitted by these groups of obligated parties was not as significant as among notaries, the number of suspicious activity reports submitted rose here as well. In the obligor group of real estate agents, for example, the number of SARs received rose from 84 in 2019 to a total of 135 in 2020.

Previously, the number of SARs received, especially from notaries and attorneys, was comparatively low. Due to their professional duty of confidentiality, notaries were previously only obliged to file a SAR if they had specific knowledge of money laundering taking place.

Among these obligated parties, the new regulation earned criticism in some cases, as it was not compatible with the current duty of confidentiality according to the views of some affected professionals. There was even an urgent application against the obligation to report suspicions of money laundering. The application was rejected by the Administrative Court, which recognized the reporting obligation as compatible with the duty of confidentiality. The basis for the rejection of the application were the duties of notification and information applicable in various areas, to which notaries are subject and which are legally superior to the duty of confidentiality. Also, according to the Professional Regulation for Lawyers, the duty of confidentiality does not apply in cases where other legal provisions allow exceptions.

The regulation that has come into force aims to promote money laundering prevention in the real estate sector and to strengthen the seizure of incriminated funds. According to studies, up to 30 billion euros are laundered on the real estate market in Germany every year. The GwGMeldV-Immobilien is part of the measures to counter this abuse and to fight crime in the real estate sector.

Source: Lawyers and notaries must report conspicuous real estate transactions (beck.de)

Customs online - Press releases - FIU annual report 2020