Recklessness or Serious Negligence
The offense of ‘Recklessness’ or ‘Serious Negligence’ in the context of anti-money laundering has developed significantly in Germany with the introduction of the new Section 261 German Criminal Code (Strafgesetzbuch – StGB) and the implementation of Directive (EU) 2018/1673.
Section 261 German Criminal Code (StGB) old version (Until March 17, 2021)
Before the reform by Directive (EU) 2018/1673 and the new version of Section 261 StGB, the offense of Recklessness or Serious Negligence was included in the old version of Section 261 StGB. He was referring to people who recklessly or by serious negligence failed to recognize that the source of an property came from an unlawful act. This offense was intended to cover both intentional and serious negligence involvement in money laundering. ‘Property’ means assets of any kind, whether corporeal or incorporeal, movable or immovable, tangible or intangible, and legal documents or instruments in any form, including electronic or digital, evidencing title to, or an interest in, such assets.
Directive (EU) 2018/1673
Directive (EU) 2018/1673, which aims to harmonize anti-money laundering within the EU, allows member states to adapt their national laws so that money laundering is a criminal offense even if the perpetrator only suspected it or should have been aware of it that the assets come from criminal activity. This arrangement gives Member States discretion to adapt the provisions of the Directive to their own legal framework.
Draft bill to improve criminal law enforcement against money laundering
The federal government’s draft law to improve criminal law enforcement against money laundering intended to expand the scope of the offense of Recklessness or Serious Negligence. The new version of Section 261 Paragraph 6 of the Criminal Code takes over the previous regulation and expands it by making the offense now applicable to all crimes (‘All-Crimes-Approach’) as potential ‘Predicate Offenses’ for money laundering, not just to a limited catalog.
Section 261 German Criminal Code (StGB) new version (Since March 18, 2021)
With the new version of Section 261 German Criminal Code (StGB), the offense of Recklessness or Serious Negligence is significantly expanded. Criminal liability now exists if someone carelessly fails to recognize that the asset in question is the proceeds or product of a crime or a corresponding surrogate. This means a significant increase in the risk of criminal liability and increases the due diligence requirements of those handling assets.
Concrete effects and criticism
This expansion of the recklessness offense has several practical effects:
- Increased due diligence requirements: People in business, especially in the financial and legal sectors, must now exercise greater due diligence in order not to unknowingly become involved in money laundering activities.
- Criticism and challenges: The expansion of the offense of recklessness carries the risk of over-criminalization and increased bureaucratic burdens. This could put a strain on legal commercial transactions and lead to an increase in unjustified investigations.
Conclusion
The introduction and expansion of the offense of recklessness or serious negligence in the context of anti-money laundering represents a significant development in German criminal law. It reflects the effort to create effective mechanisms against the integration of illegally acquired assets into the legal economic cycle. At the same time, it requires careful consideration to avoid over-regulation and unnecessary burdens on legitimate business activities.