Overview
Over the years, Germany has marked itself as one of the biggest exporters in the world, accounting for 41% of national output. In 2020, motor vehicles and parts (15.6%) were the highest exported goods, followed by machinery (14.6%) and chemical products (9.3%). Due to the pandemic, Germany’s export to countries outside the European Union dropped by 2.7% in the first quarter of 2021. But the second quarter seems promising for Germany with an expected recovery rate of 2%.
In recent months, the trade-reliant economy has benefited from a rebound in global demand, and companies are reporting full order books. The number of people on state wage support fell to 1.5 million in June, the lowest level since before lockdowns started last year, and the Bundesbank predicts output is on the verge of making up the ground lost during the pandemic.
Financial Action Task Force (FATF) Status
Germany has been a member of the FATF since 1990 and an observer to the Eurasian Group (EAG), Asia/Pacific Group on Money Laundering (APG), and Financial Action Task Force of Latin America (GAFILAT).
Regulators
European Union (EU)
Germany has been a member of the EU since 1 January 1958, with 96 German members in the European Parliament. The EU’s goal is to maintain sustainable development based on balanced economic growth and price stability, a highly competitive market economy with full employment, and establish an economic and monetary union whose currency is the euro.
Eurasian Group (EAG)
In July 2020, Germany joined the EAG observer states list. The EAG is a FATF-style money laundering and terrorist financing regulatory body. This regional body comprises of nine countries: Belarus, China, Kazakhstan, Kyrgyzstan, India, Russia, Tajikistan, Turkmenistan, and Uzbekistan. EAG is an associate member of the FATF.
Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin)
BaFin is a public body operating to ensure the German financial system’s proper functioning, stability, and integrity. Their goal is to prevent the misuse of the financial system for money laundering, terrorist financing, and other criminal offenses, which can threaten an institute’s assets. Bodies in the financial sector are subject to the money laundering supervision of BaFin, include not just credit institutions, financial services institutions, and payment institutions, but also life insurance undertakings, German asset management companies (Kapitalverwaltungsgesellschaften), and persons and companies that sell or convert e-money. BaFin is the only competent authority in this field.
Deutsche Bundesbank (German Federal Bank)
The Deutsche Bundesbank responsibility is to ensure monetary and financial stability. A few of the Bank’s functions are to make decisions on the monetary policy, carry out foreign exchange operations following the Euro-system, cross border payment regulation, note issuer, and many more.
Relevant regulations
The German KYC regulations are based on the European Union and FATF provisions.
The AML ACT or the Geldwäschegesetz in German is the most common regime. The act states that transactions are subject to different identification and reporting requirements, with penalties resulting from non-compliance. These vary from a simple proof of identification (for individuals) or a physical/electronic record of the company to simple or enhanced due diligence, depending on the risk. For example, Politically Exposed Persons (PEPs) are always subject to an enhanced due diligence process.
The reporting is made to the Criminal Investigation Department of the relevant state and to the central Criminal Investigation Department of Germany (Central Division for Suspicious Activity Reports (Financial Intelligence Unit FIU)).
German verification available
Any German citizen can be verified using government, commercial or credit data sources. Based on the documentation verified against the data sources, the name, date of birth (DOB), nationality and address can be validated.
German citizens can be verified using the following documents:
National Identity Card:
Germany’s national identity card meets the highest requirements for document security. Its tough security features offer a high level of protection for the data and digital photograph stored on the chip. Its biometric function can be used only for official checks at national borders and within the country to verify the card holder’s identity. Cardholders may also choose to store two fingerprints on the chip as well. It can verify nationality, name, surname, place of birth, date of birth, holder’s picture, and two fingerprints.
Passport:
The Federal Printing Office in Berlin issues the German passport. Passport applications along with fingerprints have to be submitted in person at the Embassy or Consulate-General. It can verify the holder’s nationality, name, photo of the passport holder, passport number, surname, gender, place of birth, DOB, and fingerprint.
Driver Licence:
The Führerschein or the German driver’s licence is issued by the authorised local driving schools. You can verify your customers’ names, gender, DOB, licence number, and nationality.
AML Screening:
Global watchlists can identify ifa German citizen is a high-risk individual or entity. You can screen your customers against PEPs, Sanctions, and adverse media lists.
Author Sara Singh Tak, Data Zoo Marketing Specialist
About Data Zoo
Instantly verify your German customer’s name, DOB, and address with access to 80% coverage. We utilise superior independent German credit data sources to provide industry-leading match rates and superior ~1.5 second response times. Depending on your AML, CTF, KYC, and identity requirements, we offer an adaptable model that allows risk-based profiling, customised rulesets, multi-source verification, search sequencing, pre-validation, ongoing match results, and historical transactions.
Originally published at https://www.datazoo.com on September 2, 2021.
