Section 10 GwG – General due diligence requirements
(1) The general due diligence requirements are:
- identifying the contracting party and, where applicable, the person acting on their behalf in accordance with section 11 (4) and with section 12 (1) and (2) and checking whether the person acting on behalf of the contracting party is entitled to do so,
- clarifying whether the contracting party is acting on behalf of a beneficial owner and, if so, identifying the beneficial owner in accordance with section 11 (5); if the contracting party is not a natural person, this includes an obligation to take adequate measures to understand the ownership and control structure of the contracting party,
- obtaining and evaluating information on the purpose and intended nature of the business relationship where this is not already clear beyond doubt from the business relationship in the individual case,
- establishing with appropriate, risk-oriented procedures whether the contracting party or the beneficial owner is a politically exposed person, a family member or a person known to be a close associate, and
- continuously monitoring the business relationship, including the transactions carried out in the course of the business relationship, in order to ensure that they are consistent with
a) the documents and information available to the obliged entities about the contracting party and, where applicable, the beneficial owner, about their business activity and customer profile and
b) where necessary, the information available to the obliged entity about the source of wealth;
in the course of their continuous monitoring activities, obliged entities are to ensure that the relevant documents, data or information are updated at appropriate intervals, taking into account the respective risk.
(2) 1The specific extent of the measures taken under subsection (1) nos. 2 to 5 must be in accordance with the respective risk of money laundering or terrorist financing, particularly in relation to the contracting party, the business relationship or transaction. 2The obliged entities must pay particular attention in this context to the risk factors specified in Annexes 1 and 2. 3In addition, in evaluating the risks the obliged entities must take into account at least
- the purpose of the account or the business relationship,
- the level of assets deposited by the customer or the size of the transactions carried out and
- the regularity or the duration of the business relationship.
4Obliged entities must demonstrate to the competent authorities upon request that the extent of the measures they have adopted is adequate based on the risk of money laundering and terrorist financing.
(3) The obliged entities are to fulfil the general due diligence requirements:
- when establishing a business relationship,
- when transactions are carried out outside of an existing business relationship in cases of
a) transfers of funds within the meaning of Article 3 no. 9 of Regulation (EU) 2015/847 of the European Parliament and of the Council of 20 May 2015 on information accompanying transfers of funds and repealing Regulation (EC) No 1781/2006 (OJ L 141 of 5 June 2015, page 1) when the transfer of funds involves an amount of €1,000 or more,
b) other transactions being carried out with a value of €15,000 or more,
- regardless of any derogation, exemption or threshold set forth in this or other Acts, when facts exist that indicate that
a) the property connected to a transaction or business relationship is the object of money laundering or
b) the property is associated with terrorist financing,
- when there is doubt as to the veracity of the information collected under provisions of this Act in relation to the identity of the contracting party, to the identity of a person acting on behalf of the contracting party or to the identity of the beneficial owner.
(3a) 1The obliged entities must fulfil the general due diligence requirements for all new customers. 2In cases of existing business relationships, they must fulfil the general due diligence requirements at an appropriate time on a risk-sensitive basis, particularly
- when the relevant circumstances of a customer change,
- when the obliged entity has a legal duty to contact the customer in the course of the relevant calendar year for the purpose of reviewing any relevant information relating to the beneficial owner, or
- when the obliged entity has a duty to do so under Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC (OJ L 64 of 11 March 2011, page 1).
(4) Obliged entities under section 2 (1) nos. 3 to 5 must fulfil the general due diligence requirements under subsection (1) nos. 1 and 2 when, in providing payment services, they accept cash as set out in section 1
sentence 2 of the Payment Services Supervision Act.
(5) 1Obliged entities under section 2 (1) no. 15 must fulfil the general due diligence requirements in the case of transactions when a player wins or bets amounts of €2,000 or more unless the game of chance is offered or brokered online. 2The identification requirements may also be met by identifying the player upon entry to the casino or other physical gambling premises, provided the obliged entity also ensures that each transaction of €2,000 or more, including the purchase or exchange of gambling chips, can be attributed to the player in question.
(6) Obliged entities under section 2 (1) no. 14 must fulfil the general due diligence requirements:
- if they act as an intermediary for purchase agreements and
- if they act as an intermediary for rental or lease agreements in the case of transactions with a monthly rental or lease payment of €10,000 or more.
(6a) Obliged entities under section 2 (1) no. 16 must fulfil the general due diligence requirements:
- if they act as a trader in goods in the following transactions:
a) transactions relating to works of art with a value of €10,000 or more,
b) transactions relating to valuables as defined in section 1 (10) sentence 2 no. 1 in which they make or receive cash payments of €2,000 or more themselves or using third parties, or
c) transactions relating to other goods in which they make or receive cash payments of €10,000 or more themselves or using third parties, and
- if they act as intermediaries in the trade of works of art and persons storing works of art in transactions of €10,000 or more.
(7) 1Section 25i (1) of the Banking Act applies to obliged entities under section 2 (1) nos. 4 and 5 if they are involved in issuing electronic money, with the limitation that only the requirements under subsection (1) nos. 1 and 4 are required to be fulfilled. 2Section 25i (2) and (4) of the Banking Act applies, with the necessary modifications.
(8) Insurance intermediaries under section 2 (1) no. 8 that collect premiums on behalf of an insurance undertaking under section 2 (1) no. 7 are required to notify the insurance undertaking whenever premiums are paid in cash and the amount exceeds €15,000 in one calendar year.
(8a) Insofar as an obliged entity under section 2 (1) no. 10 acts as a general counsel or patent counsel or an obliged entity under section 2 (1) no. 12 acts as a tax manager for a company that is itself an obliged entity under section 2 (1), that company is responsible for the obligations under subsection (1).
(9) 1If the obliged entity is unable to fulfil the general due diligence requirements under subsection (1) nos. 1 to 4, the business relationship must not be established or continued and no transactions may be executed. 2Where a business relationship already exists, the obliged entity is required to terminate or otherwise end it regardless of any other statutory provisions or contractual terms. 3Sentences 1 and 2 above do not apply to obliged entities under section 2 (1) nos. 10 and 12 if legal advice or legal representation activities are to be carried out, unless the obliged entity knows that the legal advice or legal representation was or is being used for the purpose of money laundering or terrorist financing. 4For as long as the contracting party does not fulfil its obligation under section 11 (5a) sentence 1 or an association whose registered office is outside Germany does not fulfil its notification obligation under section 20 (1) sentences 2 and 3, the notary must refuse to carry out the notarisation; section 15 (2) of the Federal Code on Notaries applies in this respect, with the necessary modifications.