Finally, the “laundered” money returns to the legal economic cycle. The criminals then use it, for example, to invest in investments such as real estate or stocks, but also to purchase luxury goods such as yachts or works of art. Very clever people invest it again in fake companies – and the cycle begins again.
The penalty for money laundering is regulated by the Criminal Code (StGB) in Section 261. According to this, money launderers face prison sentences of three months to five years. In particularly serious cases, the prison sentence can be up to ten years.
A particularly serious case usually occurs when the perpetrator acts for profit or is a member of a gang that was founded to continually “launder” money.
But private individuals can also violate the Money Laundering Act. This is the case if you pay in cash for goods or services that cost more than 10,000 euros. The EU has now banned cash payments of this amount. Previously, in Germany you only had to prove where the money came from. The same applied to cash deposits of more than 10,000 euros.
In many EU countries the cash limit was already much lower. In Italy, the country of the mafia, you are not allowed to use cash to buy goods that cost more than 1,000 euros. In Greece, only 500 euros are allowed.
The Money Laundering Act also regulates which companies and professional groups are obliged to actively prevent money laundering. These so-called obligated parties primarily include companies from the financial sector, such as credit institutions and financial service providers, but also insurance companies, lawyers, gaming providers and real estate agents.
They have so-called customer-related and transaction-related due diligence obligations. This means they must verify the identity of customers and report suspicious account activity immediately. This happens at the Central Office for Financial Transaction Investigations (Financial Intelligence Unit, or FIU for short).
