BaFin orders notice on all Iran and North Korea business

By Dr. Michael Juenemann

05-2020

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.