Money Laundering Defense in Germany

You should bring in a criminal defense lawyer as soon as you learn that you are under investigation, or when you notice suspicious circumstances in your business dealings. Legal support is particularly urgent if your home or business premises are searched, your accounts are frozen, or you receive a summons from the police or the public prosecutor’s office. Swift action is also needed if a bank or another business that must report suspicious transactions has filed a report with the FIU. Under the German Money Laundering Act (Geldwäschegesetz, GwG), these businesses are known as obliged entities. The FIU analyzes their reports and passes information on possible money laundering to the relevant law enforcement authorities.

Under Section 47 GwG, banks are prohibited from telling customers that they have filed a suspicious activity report. As a result, an unexplained freeze or termination of your bank account can be the first sign that you are under scrutiny, often before any contact from the authorities. Seeking legal advice at this stage gives your lawyer the best opportunity to assess the situation and respond before investigative measures follow.

Preventive advice is advisable for companies and individuals in high-risk areas such as the financial sector, real estate, precious metals trading, and cross-border business. Involving a lawyer when planning larger transactions or setting up compliance systems can reduce criminal law risks and help prevent proceedings later on.

If you are suspected of money laundering, the most important steps are to seek legal advice immediately, remain silent, preserve your records, and let your lawyer handle all contact with the authorities.

As soon as you become aware that you are suspected of money laundering, or investigative measures are taken against you, the situation calls for particular care and specialist support. This applies to business owners and managing directors, but equally to private individuals. Money laundering proceedings are among the most complex in white-collar criminal law, and a single ill-considered step or statement can significantly weaken your legal position.

The layered legal requirements and the wide-ranging powers of the investigating authorities make experienced legal representation essential. Involving a criminal defense lawyer early is the best way to protect your rights as the accused (Beschuldigter) and build a sound defense strategy. It often also makes it possible to prevent disproportionate investigative measures or limit their scope.

The most important steps are:

• Seek legal advice immediately: Speak to a criminal defense lawyer before you communicate with the investigating authorities or hand over any documents. Do not try to explain the situation to investigators yourself.
• Exercise your right to remain silent: As the accused, you are not required to make any statement on the allegations. Refer all inquiries from the authorities to your lawyer. Any statement made without legal advice can weaken your position, even if you believe you are clearing up a misunderstanding.
• Gather and preserve your records: Collect all relevant records, such as business documents, bank statements, records of financial transactions, and correspondence. Do not destroy, alter, or hide any documents. Doing so can be treated as a risk of tampering with evidence (Verdunkelungsgefahr), which is one of the grounds on which a court can order pre-trial detention under Section 112 of the German Code of Criminal Procedure (Strafprozessordnung, StPO).
• Do not sign documents you do not understand: If investigators ask you to sign a record or other document in German, you are not obliged to do so on the spot. Your lawyer can review it first.
• Communicate only through your lawyer: All contact with the public prosecutor’s office, the FIU, and other investigating authorities should go through your lawyer. Direct contact risks self-incrimination and can put you at a tactical disadvantage.

Money laundering means concealing the origin of illegally obtained assets so that they can enter the legitimate economy. In Germany, it is a criminal offense under Section 261 of the German Criminal Code (Strafgesetzbuch, StGB), supplemented by the GwG, which sets out the due diligence and reporting obligations of banks and other obliged entities. It is a follow-on offense: it requires an earlier unlawful act, known as the predicate offense, from which the assets originate.

German law does not limit money laundering to a list of serious predicate offenses. Any unlawful act can be the source of the assets, from fraud or drug offenses to far less serious crimes. As a result, the offense may reach further than readers expect from their home jurisdiction, and conduct that seemed harmless at the time can later become the subject of an investigation.

Under Section 261(1) StGB, a person commits money laundering if they do any of the following with an asset that originates from an unlawful act:

• Hiding the asset
• Exchanging, transferring, or moving the asset with the intention of preventing it from being found or confiscated, or its origin from being identified
• Obtaining the asset for themselves or a third party
• Keeping or using the asset for themselves or a third party, if they knew of its origin at the time they obtained it

Obtaining, keeping, or using an asset is not an offense if a third party had previously acquired it without committing an unlawful act. Under Section 261(2) StGB, it is equally an offense to conceal or disguise facts that could be relevant to finding or confiscating such an asset, or to identifying its origin. Attempting any of these acts is also punishable under Section 261(3) StGB.

If you were involved in the predicate offense yourself, you can only be prosecuted for money laundering in addition if you put the asset into circulation and conceal its unlawful origin in doing so (Section 261(7) StGB).

German investigating authorities pursue money laundering with particular intensity, and both companies and private individuals can quickly become the focus of an investigation.

The predicate offense does not have to have taken place in Germany. Under Section 261(9) StGB, assets that originate from an act committed abroad are treated the same way, provided the act would be unlawful under German law and is punishable in the country where it was committed. For certain serious offenses covered by EU legislation, including corruption, drug trafficking, human trafficking, organized crime, and terrorism, it is enough that the act falls within the scope of that legislation, even if it is not punishable where it took place. Anyone who moves money between Germany and other countries should be aware that funds connected to conduct abroad can trigger a German investigation, and that such cases can involve cooperation between authorities in several states, including extradition proceedings.

Money laundering does not have to be intentional to be punishable. Under Section 261(6) StGB, a person who carries out one of the acts described above can also be prosecuted if they recklessly fail to recognize that the asset originates from an unlawful act. Unlike intentional money laundering, this does not require the person to have known or suspected the criminal origin. The allegation is instead that the criminal origin should have been obvious from the circumstances, and that the person ignored the warning signs or failed to make the checks the situation called for.

Recklessness (Leichtfertigkeit) sets a higher bar than ordinary carelessness: the criminal origin must have been obvious from the circumstances. Whether that bar is met depends on the circumstances of the individual case, which is often where the defense focuses.

Allegations of reckless money laundering often arise when someone has taken on a job that, looking back, showed clear signs of money laundering. A typical example is a money mule (in German, Finanzagent): a person who receives money into their own bank account and passes it on, often abroad, in return for a commission. These offers are frequently advertised online, for example as a “money transfer agent” or a local representative for an overseas company. They often target students, job seekers, and people who have recently moved to Germany. Recruiters also approach young people directly through social media and messaging apps, sometimes asking them to hand over their bank card and PIN. Typical warning signs include high pay for very little effort, vague job duties with no qualifications required, a request to use your personal bank account to move money, and an employer you only ever deal with online.

Being deceived by a fraudulent employer does not automatically protect you from prosecution. If the warning signs were obvious, the authorities may argue that you acted recklessly. At the same time, many people in this situation were themselves misled, and establishing what they actually knew and could have recognized is central to the defense.

Reckless money laundering carries a penalty of up to two years’ imprisonment or a fine. Victims of the underlying offense may also bring civil claims for damages against the money mule, for example to recover funds that passed through their account. In practice, the bank will usually also close the account, which can make it difficult to open a new account or obtain credit in Germany afterward.

The penalty for money laundering in Germany depends on how the offense was committed and by whom:

Money laundering under Section 261(1) or (2) StGB carries a fine or imprisonment of up to five years. Professionals and businesses with obligations under the GwG, such as banks, lawyers, notaries, and real estate agents, face a stricter penalty range if they commit the offense themselves: Section 261(4) StGB provides for imprisonment of three months to five years, with no option of a fine.

In particularly serious cases, Section 261(5) StGB provides for imprisonment of six months to ten years. A case is generally considered particularly serious if the offender acts on a commercial basis, meaning with the aim of creating an ongoing source of income, or as a member of a gang that has joined together to commit money laundering on a continuing basis.

Under Section 261(8) StGB, a person can avoid punishment entirely if they voluntarily report the offense to the relevant authority, or voluntarily arrange for it to be reported. This only applies if the offense had not already been fully or partly discovered at that point, and the person neither knew this nor had reason to expect it. In addition, the person must bring about the seizure of the asset in question. Because a disclosure that does not meet these conditions amounts to an admission, this option should only be considered after legal advice. This exemption is separate from voluntary self-disclosure in tax matters, which follows its own rules.

Beyond the criminal penalty, money laundering proceedings can have far-reaching consequences:

• Confiscation of assets: Assets connected to the offense and the proceeds of the offense can be confiscated under Section 261(10) and Sections 73 to 73e StGB. During the investigation, assets can already be secured through an asset freeze (Vermögensarrest).
• Professional bans: If someone committed the offense by abusing their profession or business, or by grossly breaching the duties connected with it, the court can ban them from practicing that profession or business for one to five years. Where there is a risk of further serious offenses, the ban can be permanent in exceptional cases, as provided by Section 70 StGB. This can affect, for example, a managing director who used their company to conceal the proceeds of crime.
• Consequences for companies: If someone in a management position commits money laundering in connection with the company, the company itself can be fined under Section 30 of the German Act on Regulatory Offenses (Gesetz über Ordnungswidrigkeiten, OWiG). The fine can reach €10 million for an intentional offense and €5 million for a negligent one. Where the company’s financial benefit from the offense is higher, the fine can exceed these limits. A company can be fined even if no proceedings are brought against the individual. It can also lose licenses required for certain business activities.
• Exclusion from public contracts: If a person in a management position is convicted of money laundering, or a fine is imposed on the company for it, public contracting authorities must exclude the company from tender procedures under Section 123 of the German Act against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen, GWB). Convictions and fines imposed in other countries are treated the same way.
• Self-cleaning: A company can avoid exclusion through self-cleaning (Selbstreinigung) under Section 125 GWB. To do so, it must show that it has paid or committed to paying compensation for any damage caused, that it has cooperated actively with the investigating authorities and the contracting authority to clarify the facts in full, and that it has taken concrete technical, organizational, and personnel measures to prevent further offenses. Because full cooperation with the authorities can conflict with the defense of individual managers, the criminal defense and any self-cleaning measures should be coordinated from the outset.
• Criminal record: A conviction is entered in the Federal Central Criminal Register (Bundeszentralregister). Depending on the sentence, it can also appear on a certificate of good conduct (Führungszeugnis), which employers and authorities may request. Our criminal lawyers can check what is recorded about you and advise on how long an entry remains.

For anyone who is not a German citizen, a money laundering conviction can also affect their right to stay in Germany. Depending on the sentence, a conviction can give rise to an interest in expulsion (Ausweisungsinteresse) under Section 54 of the German Residence Act (Aufenthaltsgesetz, AufenthG). It can also stand in the way of renewing a residence permit, obtaining permanent residence, or naturalization. How criminal proceedings are concluded, for example whether they end with a dismissal or a conviction, can make a significant difference here. For this reason, a defense strategy for non-German clients should take the immigration consequences into account from the outset.

Businesses and professionals that count as obliged entities under Section 2 GwG face a heightened risk of money laundering allegations simply because of the nature of their work. Obliged entities include banks, payment and e-money institutions, providers of crypto-asset services, insurance companies offering life insurance and similar products, real estate agents, gambling providers, trust and company service providers, dealers in goods, and art intermediaries. They must carry out due diligence on their customers, monitor transactions, and report suspicious activity to the FIU.

Lawyers, notaries, auditors, and tax advisors are also obliged entities. For lawyers and notaries, this applies when they assist clients with certain transactions, such as buying or selling real estate or businesses, company formations, or the management of money and other assets. These professionals must ensure that their services are not used to launder money. A breach can lead not only to criminal liability but also to professional sanctions.

For obliged entities, the risk works on two levels. Under Section 56 GwG, breaching due diligence, record-keeping, or reporting obligations is an administrative offense in its own right, even where no money laundering has taken place. Both intentional and reckless breaches are covered, and for serious, repeated, or systematic breaches the fines can reach millions of euros. If an obliged entity commits money laundering itself, the stricter penalty range under Section 261(4) StGB applies. At Schlun & Elseven Rechtsanwälte, we also advise obliged entities on setting up compliance systems that meet their obligations under the GwG.

Businesses with significant cross-border activity also face closer scrutiny. Under Section 15 GwG, banks and other obliged entities must apply enhanced due diligence to transactions involving countries that the European Commission has identified as high-risk third countries. This includes obtaining information about the origin of the funds and the reasons for the transaction, so payments to or from these countries are more likely to be questioned or delayed. This affects companies trading internationally, but equally private individuals who regularly send money to or receive money from family abroad.

At Schlun & Elseven Rechtsanwälte, many of our clients in money laundering cases do not speak German, or live outside Germany, or both. A German investigation raises practical questions for them that a native German speaker would rarely need to ask.

If you are summoned as an accused person by the police, you are not obliged to attend. A summons from the public prosecutor’s office is different: under Section 163a(3) StPO, you must appear, but you still have the right to remain silent. The same applies to a summons from a court. In either case, speak to a lawyer before responding.

Pay particular attention to any letter titled “Strafbefehl.” A penalty order (Strafbefehl) is a conviction issued in writing, without a trial. Under Section 410 StPO, it becomes final if no objection is filed within two weeks of delivery, and it then has the same effect as a court judgment, including for your criminal record and residence status. If you receive a letter in German and are unsure what it means, have it checked immediately rather than waiting.

If you do not speak sufficient German, you are entitled under Section 187 of the German Courts Constitution Act (Gerichtsverfassungsgesetz, GVG) to an interpreter free of charge throughout the criminal proceedings, wherever this is necessary to exercise your rights. As a rule, you are also entitled to a written translation of key documents, such as an arrest warrant, an indictment, a penalty order, or a judgment that is not yet final. If you have a defense lawyer, an oral translation or summary can often take the place of a written translation. Our lawyers advise in English and can explain every step of the proceedings to you directly.

You do not need to be in Germany to instruct us. We can inspect the case file on your behalf, communicate with the investigating authorities, and develop your defense strategy with you remotely. Much of this work does not require you to be present, although you may need to appear in person at certain stages, for example if the public prosecutor’s office summons you or the case goes to trial.

If a German arrest warrant has been issued against you, traveling can carry serious risks. Within the EU, a European Arrest Warrant can lead to your arrest in any member state and your surrender to Germany. Outside the EU, an Interpol Red Notice can lead to arrest and extradition proceedings. Before you travel, our lawyers can establish through the case file whether a warrant exists and, where possible, work to resolve it.

Anyone arrested in Germany must be informed of their rights in writing, in a language they understand, and brought before a judge no later than the day after their arrest. Foreign nationals also have the right to have their consulate informed under Section 114b StPO. Close ties abroad can be cited as grounds for a risk of flight (Fluchtgefahr), which can lead to pre-trial detention. An experienced defense lawyer can counter this, for example by demonstrating your ties to Germany or proposing conditions under which the arrest warrant can be suspended under Section 116 StPO, such as bail or reporting obligations.

Whether your account has just been frozen, you have received a summons, or proceedings are already under way, our money laundering lawyers review your situation and explain your options in English. Describe your situation to us through our contact form. We work with a transparent cost structure, so you know what to expect. We can work with you remotely, whether you live in Germany or abroad, and everything you tell us is protected by lawyer-client confidentiality.