German Anti-Money Laundering Act (GwG)

Legislation requiring real estate agents to identify contracting parties and assess risks.

Brokers are obliged entities under the GwG. Before a transaction they must verify the identity of the parties, beneficial owners and, to an appropriate extent, the source of funds, and document this.

Obligations in detail

Real estate agents are obliged entities under Section 2(1) No. 14 of the German Anti-Money Laundering Act. They must maintain risk management, identify contracting parties, determine beneficial owners and check the transparency register. For brokering leases, the obligations apply from a monthly rent of 10,000 euros. Suspicious cases must be reported to the Financial Intelligence Unit.

Practice

For companies, this means that a commercial register extract, list of shareholders, transparency register extract and identity documents of the acting persons are requested. With complex structures involving funds or foreign companies, identifying beneficial owners takes more effort. Early preparation avoids delays shortly before closing.

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