BaFin ends money laundering law exemptions for central regulators

The German Federal Financial Supervisory Authority (BaFin) has issued a final general directive ending previous exemptions from the Money Laundering Act (GwG) for central regulators. This move aims to harmonize anti-money laundering efforts within the European Union.

Effective July 10, 2027, all national special regulations regarding these exemptions will cease. The change will coincide with the implementation of EU Money Laundering Regulation (EU) 2024/1. Affected entities include central regulatory cooperatives, purchasing groups, and various associations within the German medium-sized business sector, particularly in trade and crafts. Other impacted parties include certain financial service providers and e-money product issuers.

Under the new requirements, organizations must comply fully with standardized GwG mandates. This includes enhanced due diligence, updated risk analyses, and the implementation of adjusted IT systems. Experts anticipate significant organizational and financial burdens due to the increased necessity for comprehensive data collection and monitoring.