Money laundering and Hawala banking – your lawyers for Niebüll

A particularly relevant topic in white-collar criminal law is money laundering. Money laundering (also known as "money laundering") money launderingMoney laundering (ML) is the introduction of illegally acquired assets into the legitimate economy while concealing their true origin. The criminal liability for money laundering is regulated in Section 261 of the German Criminal Code. Experienced lawyers specializing in money laundering cases are available to assist you in Niebüll.

As part of the effective fight against money laundering and terrorist financing, the Money Laundering Act (GwG) imposes various anti-money laundering obligations on certain companies and groups of individuals. These obligations are complex and extensive, and compliance with them is of utmost importance – also for companies and private individuals in Niebüll.

Criminal liability under the German Criminal Code

According to Section 261 Paragraph 1 of the German Criminal Code (StGB), anyone who conceals the origin of illegally acquired assets is guilty of money laundering. In Niebüll, as throughout Germany, this often involves funds from crimes such as receiving stolen goods (Section 259 StGB), robbery (Section 250 StGB), tax evasion (Section 370 Fiscal Code), corruption offenses, or drug and arms trafficking.

The prerequisites for fulfilling the offense are as follows:

• The asset in question must originate from an unlawful predicate offense.

• A suitable act must be present:

  • Section 261 paragraph 1 sentence 1 no. 1 StGB: Concealment of the object

  • Section 261 para. 1 sentence 1 no. 2 StGB: Exchange, transfer or transport of the object with the intention of thwarting its discovery, confiscation or the determination of its origin

  • Section 261 para. 1 sentence 1 no. 3 StGB: Obtaining the object (for oneself or a third party)

  • Section 261 para. 1 sentence 1 no. 4 StGB: Storing or using the object if its origin was known at the time of acquisition

  • Section 261 (3) StGB: Concealing or concealing facts that could be relevant to the discovery, confiscation or determination of the origin of the object

• The origin of the assets must be known or at least grossly negligent (carelessly) misunderstood.

The law generally provides for a prison sentence of up to five years or a fine for the offense. Those obligated under Section 2 of the Money Laundering Act face a prison sentence of three months to five years. In particularly serious cases, such as commercial activity or organized money laundering by gangs, the prison sentence is between six months and ten years. Even the reckless misrecognition of the illegal origin of funds is already punishable.

In such cases, lawyers working for Niebüll can not only examine the legal options, but also assist in voluntarily reporting the matter to the relevant authorities in order to avoid punishment.

Money Laundering Act (GwG)

The basis for national legislation is the current EU Money Laundering Directive, which has been revised regularly, most recently in 2024. The 6th EU Money Laundering Directive must be implemented into national law by EU member states by July 10, 2027. It builds on the previous directives, but tightens requirements and prescribes even more consistent measures against criminal activities to effectively combat money laundering and terrorist financing. In Germany alone, the number of money laundering offenses recorded by the police more than tripled between 2020 and 2023. The global money laundering volume is estimated at up to $2 trillion.

The GwG is of great importance for Niebüll companies, banks, financial service providers, and private individuals. It specifically regulates responsibilities for combating money laundering and associated precautionary measures. These include, in particular, reporting, monitoring, documentation, and due diligence obligations. Section 2 of the GwG requires the submission of suspicious transaction reports to the relevant authorities for certain transactions – regardless of the payment method or the transaction value. Elmshorn lawyers support clients in implementing these complex requirements in a practical manner.

Obligated within the meaning of the GwG are in particular

• Banks, credit institutions, financial companies and asset managers
• Legal advisors, tax advisors and notaries
• Insurance
• auditor
• Gambling providers
• Businesses with high cash transactions
• customs officers
• Real estate agent
• art mediator

Violations can result in fines of up to one million euros or up to twice the economic benefit derived from the violation. Niebüll companies should therefore urgently check whether their internal processes comply with the requirements of the GwG.

Hawala banking

The term "hawala" comes from Arabic and means "transfer." The hawala banking system enables informal financial transfers worldwide and has existed for decades. It allows the circumvention of direct financial transactions and is based solely on trust and confidentiality. Hawala banking operates without government authorization, without bank accounts, and without verifiable transactions.

For Niebüller, this means that even local businesses and private individuals can be unknowingly involved in hawala transactions, for example, through intermediaries in restaurants, shops, or small retail businesses. Monitoring such systems is extremely difficult. Worldwide, a transfer volume of approximately €200 billion per year via hawala is estimated.

The system works via so-called hawaladars:

1. The payer hands over cash to a local hawaladar in Niebüll.
2. The latter contacts a Hawaladar at the payout location and transmits the amount of money and payout code.
3. The recipient authenticates himself with the code to the payer and receives the money.

Usually, no direct money flows between hawaladars; the transaction is carried out purely on a commercial basis. Sham purchase agreements are sometimes used to conceal the transactions.

Hawala banking is prohibited in Germany and the EU because it violates anti-money laundering regulations. Law enforcement authorities in Niebüll are increasingly observing evidence of such systems and are examining suspicious transactions for possible connections to criminal activities, such as money laundering or terrorist financing. Lawyers in Niebüll advise companies and private individuals on legal protection and investigations to identify and minimize risks early on.