BaFin | Federal Financial Supervisory Authority

BaFin means the Federal Financial Supervisory Authority in Germany. They supervise credit institutions, insurance undertakings, financial services institutions, and asset management companies using the BaFin Germany database. It also represents German interests in international organizations. They have two offices in Bonn and Frankfurt is Main. 

Responsibilities of BaFin / BaFin's Functions

BaFin's primary responsibility is that the German financial system function appropriately, remains competitive and stable and preserve its integrity. It also ensures that the trust of investors and insurance policyholders in this system is maintained. Furthermore, they are tasked with that market operators conduct themselves fairly.

It operates in the public interest. The German financial system continues to function appropriately and remain competitive and stable, and its integrity is preserved. As a result, the trust of investors and insurance policyholders in this system is saved. Financial supervision's objective is to ensure the German financial market's proper functioning, stability, and integrity. Bank customers, insurance policyholders, and investors should trust the financial system. For that reason, BaFin seeks to ensure that market participants comply with the relevant laws.

BaFin's AML Policies

Its goals are to prevent the misuse of the financial system for money laundering, terrorist financing, and other criminal offenses. Bodies subject to BaFin's money laundering control,

  • Credit institutions
  • Financial services institutions
  • Payment institutions
  • Life insurance undertakings German asset management companies some people and companies sell or convert e-money.

It is the only competent authority in this field (Deutsche Bundesbank does not have an AML/CFT-competence). 

BaFin AML Laws Customer Due Diligence Requirements 

Customer Due Diligence (CDD) is the name given to companies' control procedures when making risk assessments for their customers. Customer Due Diligence (CDD) is one of the basic requirements of the AML approach; it allows potential customer risks to be identified and requires knowing the customer and its activities. CDD procedures are required by national and local regulations and are an essential component of Anti-Money Laundering (AML). Like other regulators, BaFin Germany has emphasized the importance of CDD procedures in AML laws and has some obligations for CDD. Organizations must administer CDD under AML responsibility, and also companies that fail to comply with these procedures may face AML penalties. According to BaFin's Customer Due Diligence Requirements, responsible organizations should be aware of the following factors to assess their risks.

  • the purpose of the report or the business association,
  • the level of assets deposited by the customer or the size of the transactions conducted 
  • the regularity or the duration of the business association. 

Obliged entities must conform to the competent authorities upon request that the extent of the measures they have complied with is adequate based on money laundering and terrorist financing risk. 

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