Section 56 GwG – Provisions relating to administrative fines

(1) 1An administrative offence is deemed to be committed by anyone who wilfully or negligently:

1. in violation of section 5 (1) sentence 1, fails to determine or evaluate risks,
2. in violation of section 5 (2), fails to document or regularly review and, as appropriate, update the risk analysis,
3. in violation of section 6 (1), fails to implement appropriate business- and customer-oriented internal safeguards or, in violation of section 6 (1) sentence 3, fails to monitor the functionality of the safeguards or fails to update the business- and customer-oriented internal safeguards regularly or where necessary,
4. in violation of section 6 (4), fails to operate data processing systems or fails to update them,
5. fails to comply with an enforceable order under section 6 (9),
6. in violation of section 8 (1) and (2), fails to record or retain data, information, the results of the examination, the reasons considered or a plausible explanation of the evaluation result or fails to do so correctly or completely,
7. in violation of section 8 (4) sentence 1, fails to retain for five years a record or other evidence,
8. in violation of section 9 (1) sentence 2, including in conjunction with subsection (4), fails to devise consistent group-wide precautions, procedures and measures,
   9 in violation of section 9 (1) sentence 3, including in conjunction with subsection (4), fails to ensure that the consistent group-wide obligations and measures are effectively implemented,
9. in violation of section 9 (2), including in conjunction with subsection (4), fails to ensure that group companies in accordance with section 1 (16) nos. 2 to 4 that are located in another member state of the European Union and are subject there to anti-money laundering and counter terrorist financing obligations that comply with the applicable national legislation transposing Directive (EU) 2015/849,
10. in violation of section 9 (3) sentence 2, including in conjunction with section (4), fails to ensure that branches and group companies under section 1 (16) no. 2 located in a third country take additional measures to effectively counteract the risk of money laundering and terrorist financing, or fails to inform the competent supervisory authority under section 50 about the measures taken,
11. contravenes an enforceable order under section 9 (3) sentence 3, including in conjunction with subsection (4),
12. in violation of section 9 (5) sentence 1, fails to implement the measures referred to in subsection (1) sentence 2 nos. 1, 3 and 4,
13. in violation of section 9 (5) sentence 2, does not implement group-wide requirements,
14. in violation of section 10 (1) no. 1, fails to identify the contracting party or a person acting on their behalf correctly, completely or in the prescribed manner, or fails to check whether the person acting on behalf of the contracting party is entitled to do so,
15. in violation of section 10 (1) no. 2, fails to check whether the contracting party is acting on behalf of a beneficial owner,

17. in violation of section 10 (1) no. 2, fails to identify the beneficial owner,
18. in violation of section 10 (1) no. 3, fails to obtain information on the purpose and intended nature of the business relationship or fails to evaluate this information,
19. in violation of section 10 (1) no. 4, fails to establish 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, or fails to do so correctly,
20. in violation of section 10 (1) no. 5, fails to continuously monitor the business relationship, including the transactions carried out in the course of the business relationship, or fails to do so correctly,
21. in violation of section 10 (2) sentence 1, fails to determine the specific extent of the due diligence measures in accordance with the respective risk of money laundering or terrorist financing,
22. in violation of section 10 (2) sentence 4 or in violation of section 14 (1) sentence 2, fails to demonstrate that the extent of the measures they have adopted is to be considered adequate based on the risk of money laundering and terrorist financing,
23. in violation of section 10 (6), fails to comply with due diligence requirements,
24. in violation of section 10 (8), fails to make a notification,
25. in violation of section 10 (9), section 14 (3) or section 15 (9) in conjunction with section 15(3) nos. 1, 3 and 4, establishes, continues or fails to terminate or otherwise end the business relationship or executes the transaction,
26. in violation of section 11 (1), fails to identify the contracting parties, persons acting on their behalf or beneficial owners in due time,
27. in violation of section 11 (2), fails to identify the parties to the contract in due time,
28. in violation of section 11 (3) sentence 2, fails to carry out a new identification,
29. in violation of section 11 (4) nos. 1 and 2, fails to collect the information or collects it incompletely,
30. in violation of section 11 (5) sentence 1, fails to establish the name of the beneficial owner in order to determine their identity,
31. in violation of section 14 (2) sentence 2, fails to ensure the scrutiny of transactions and business relationships to an extent that enables them to recognise and report unusual or suspicious transactions,
32. in violation of section 15 (2), fails to fulfil enhanced due diligence requirements,
33. in violation of section 15 (4) sentence 1 no. 1 in conjunction with subsection (2) or (3) no. 1, fails to obtain the approval of a member of senior management before establishing or continuing a business relationship,
34. in violation of section 15 (4) sentence 1 no. 2 in conjunction with subsection (2) or (3) no. 1, fails to take measures,
35. in violation of section 15 (4) sentence 1 no. 3 in conjunction with subsection (2) or (3) no. 1, fails to conduct enhanced, ongoing monitoring,
36. in violation of section 15 (5) no. 1 (a) to (f) in conjunction with subsection (3) no. 2, fails to gather information,
37. in violation of section 15 (5) no. 2 in conjunction with subsection (3) no. 2, fails to obtain the approval of a member of senior management,
38. in violation of section 15 (5) no. 2 in conjunction with subsection (3) no. 2, fails to conduct enhanced monitoring of the business relationship,
39. in violation of section 15 (6) no. 1 in conjunction with subsection (3) no. 3, fails to examine the transaction,
40. in violation of section 15 (6) no. 2 in conjunction with subsection (3) no. 3, fails to conduct enhanced, ongoing monitoring of the underlying business relationship,
41. in violation of section 15 (7) no. 1 in conjunction with subsection (3) no. 4, fails to gather sufficient information,

42. in violation of section 15 (7) no. 2 in conjunction with subsection (3) no. 4, fails to obtain the approval of a member of senior management,
43. in violation of section 15 (7) no. 3 in conjunction with subsection (3) no. 4, fails to determine or document the responsibilities,
44. in violation of section 15 (7) no. 4 or no. 5 in conjunction with subsection (3) no. 4, fails to take measures,
45. in violation of section 15 (5a) and (8), contravenes an enforceable order of the supervisory authority,
46. in violation of section 16 (2), admits a player to an online game of chance,
47. in violation of section 16 (3), accepts deposits or other refundable monies,
48. in violation of section 16 (4), permits transactions of the player to the obliged entity through channels other than those specified in section 16 (4) nos. 1 and 2,
49. in violation of section 16 (5), fails to fulfil their notification obligations,
50. in violation of section 16 (7) sentence 1 no. 2, carries out transactions to a payment account,
51. in violation of section 16 (7) sentence 2, fails to sufficiently specify the payment reference despite a request from the supervisory authority,
52. in violation of section 16 (8) sentence 3, fails to carry out the full identification or fails to do so in due time,
53. in violation of section 17 (2), delegates the fulfilment of the due diligence requirements to a third party domiciled in a high-risk third country,
54. in violation of section 18 (3), fails to provide information or fails to do so in due time,
55. in violation of section 20 (1),
    a) fails to obtain,
    b) fails to retain, or fails to correctly or completely retain,
    c) fails to keep up to date or
    d) fails to notify the registrar entity, or fails to notify it correctly, completely or in due time of information on the beneficial owner.
56. in violation of section 20 (1a), fails to fulfil their notification obligation or fails to fulfil it correctly, completely or in due time,
57. without being authorised to do so by the association subject to a notification obligation, electronically notifies information on the beneficial owner to the registrar entity for entry into transparency register,
58. in violation of section 20 (3), fails to fulfil their notification obligation or fails to fulfil it correctly, completely or in due time,
59. in violation of section 20 (3a) sentences 1 to 3 or subsection (3b) sentence 1, fails to make a notification or fails to make it correctly, completely or in due time,
60. in violation of section 20 (3a) sentence 4, fails to fulfil their documentation obligation,
61. in violation of section 21 (1) or (2)
    a) fails to obtain,
    b) fails to retain, or fails to correctly or completely retain,
    c) fails to keep up to date or
    d) fails to notify the registrar entity, or fails to notify it correctly, completely or in due time of information on the beneficial owner.
62. in violation of section 21 (1a) or (1b), fails to fulfil their notification obligation or fails to fulfil it correctly, completely or in due time,
63. fails to correct an inaccurate notification under section 20 (1) or section 21 (1),

64. gains permission to inspect the transparency register contrary to section 23 (1) sentence 1 no. 2 or no. 3 under false pretences or unlawfully gains access to the transparency register in some other manner,
65. in violation of section 23a (1) sentence 1, fails to fulfil their notification obligation,
66. in violation of section 23a (3), fails as an obliged entity to provide information or documents or fails to do so in due time,
67. in violation of section 30 (3), fails to respond to a demand for information or fails to do so correctly, completely or in due time,
68. in violation of section 40 (1) sentence 1 or 2, fails to respond to an order or an instruction or fails to do so in due time or completely,
69. in violation of section 43 (1), fails to submit a report or fails to do so correctly, completely or in due time,
70. in violation of section 46 (2) sentence 2, fails to subsequently file the report without undue delay,
71. disregards a prohibition under section 51 (5),
72. fails to submit information under section 51 (7) or fails to do so correctly, completely or in due time,
73. in violation of section 52 (1) and (6),
    a) fails to provide information, or fails to provide it correctly, completely or in due time,
    b) fails to submit documents, of fails to provide them correctly, completely or in due time,
74. in violation of section 52 (3), fails to tolerate an inspection.
    2If it is committed wilfully, the administrative offence is punishable by a fine not exceeding €150,000, in all other cases by a fine not exceeding €100,000.
    (2) 1An administrative offence is deemed to be committed by any person who wilfully or negligently
75. in violation of section 4 (3) sentence 1, fails to appoint a member of the management,
76. in violation of section 7 (1), fails to appoint a money laundering officer or a deputy,
77. fails to comply with an enforceable order under section 7 (3) or fails to do so in due time,
78. in violation of section 9 (1) sentence 2, including in conjunction with subsection (4), fails to appoint a group money laundering officer,
79. in violation of section 15 (9) in conjunction with section 15 (3) no. 2, establishes, continues or fails to terminate or otherwise end the business relationship or executes the transaction,
80. executes a transaction in violation of section 46 (1) sentence 1, or
81. in violation of section 47 (1) in conjunction with subsection (2), informs the contracting party, the instructing party or a third party,
    2If it is committed wilfully, the administrative offence is punishable by a fine of up to €150,000, if it is committed negligently by a fine of up to €100,000, and in all other cases by a fine of up to €50,000.
    (3) 1An administrative offence under subsection (1) and, if committed wilfully or negligently, under subsection (2) is punishable by
82. a fine of up to €1m or
83. a fine up to up to twice the economic benefit derived from the contravention,
    if the contravention is serious, repeated or systematic. 2The economic benefit comprises profits gained and losses avoided and can be estimated. 3A fine higher than that stated in sentence 1 may be imposed on obliged entities under section 2 (1) nos. 1 to 3 and 6 to 9 that are legal persons or associations. 4In these cases, the fine must not exceed the higher of the following amounts:
84. €5m or
85. 10 per cent of the total turnover recorded by the legal person or association in the financial year prior to the

authority’s decision.
5A fine higher than that stated in sentence 1 of up to €5m may be imposed on obliged entities under section 2 (1) nos. 1 to 3 and 6 to 9 that are natural persons.
(4) 1Total turnover within the meaning of subsection (2) sentence 4 no. 2 is

1. in the case of credit institutions, payment institutions and financial services institutions within the meaning of section 340 of the Commercial Code, the total amount resulting from the national law applicable to the institution in accordance with Article 27 nos. 1, 3, 4, 6 and 7 or Article 28 Part B nos. 1 to 4 and 7 of Council Directive 86/635/EEC of 8 December 1986 on the annual accounts and consolidated accounts of banks and other financial institutions (OJ L 372 of 31 December 1986, page 1), net of value added tax and other taxes levied directly on this income,
2. in the case of insurance undertakings, the total amount resulting from the national law applicable to the insurance undertaking in accordance with Article 63 of Council Directive 91/674/EEC of 19 December 1991 on the annual accounts and consolidated accounts of insurance undertakings (OJ L 374 of 31 December 1991, page 7) net of value added tax and other taxes levied directly on this income,
3. in all other cases the amount of net turnover according to national law applicable to the company in accordance with Article 2 no. 5 of Directive 2013/34/EU.
   2In cases where the legal person or the association is a parent company or a subsidiary, the respective total amount in the consolidated financial statements of the parent company for the largest number of companies is to be used rather than the total turnover of the legal person or the association. 3If the consolidated financial statements for the largest number of companies are not prepared in accordance with the provisions set out in sentence 1, the total turnover is calculated on the basis of the items of the consolidated financial statements that are equivalent to the items referred to in sentence 1 numbers 1 to 3. 4If annual financial statements or consolidated financial statements for the financial year in question are not available, the annual financial statements or consolidated financial statements of the most recent financial year must be used. 5If the annual financial statements or consolidated financial statements of the most recent financial year are also not available, the total turnover may be estimated.
   (5) 1The competent supervisory authority in each case under section 50 nos. 1 and 7a to 9 is also the administrative authority under section 36 (1) no. 1 of the Act on Administrative Offences. 2For administrative offences under subsection (1) sentence 1 nos. 54 to 66, the Federal Office of Administration is the administrative authority under section 36 (1) no. 1 of the Act on Administrative Offences.
   (6) Unless it is also the competent supervisory authority, the competent administrative authority transmits on request all information, including personal data, to the competent supervisory authority, insofar as the information is necessary for the performance of the functions of the supervisory authority, in particular for the provision of statistics under section 51 (9).
   (7) The supervisory authorities check in the Federal Central Criminal Register (Bundeszentralregister) whether the person concerned has relevant convictions.
   (8) The competent supervisory authorities under section 50 nos. 1, 2 and 9 inform the respective competent European supervisory authority with regard to the obliged entities under section 2 (1) nos. 1 to 3 and 6 to 9 about
4. the fines imposed on these obliged entities,
5. other measures taken because of contraventions of provisions of this Act or of other acts intended to prevent money laundering and terrorist financing and
6. relevant appeal procedures and their outcomes.