Reviewing Obligated Parties under § 2 GwG: Who Falls under the Money Laundering Act

§ 2 para. 1 of the Money Laundering Act (GwG/AMLA) contains an exhaustive list of 16 categories of obligated parties that are fully subject to the GwG. The scope ranges from credit institutions (no. 1) through estate agents (no. 10) and goods traders for cash payments (no. 16) to lawyers, notaries, and tax advisers for certain transactions (nos. 10a, 12). Companies that fall within this spectrum without being aware of it risk fines under § 56 GwG simply for the absence of a risk analysis — not only in the event of an actual money laundering transaction.

This article provides a structured review pathway for companies uncertain whether they belong to the circle of obligated parties, explains the key delimitation criteria for the individual obligated groups, and sets out which obligations arise immediately once the obligation is established.

§ 2 para. 1 GwG divides the obligated parties into 16 categories. Three main groups can be broadly distinguished:

Financial sector (nos. 1–6): Credit institutions, financial services institutions, payment service providers, e-money institutions, life insurance undertakings, and capital management companies. This group is supervised by BaFin and is subject to the most extensive due diligence obligations, including the duty to appoint a GwB under § 7 GwG.

Regulated professions (nos. 10a, 11, 12): Lawyers, patent attorneys, notaries, auditors, chartered accountants, tax advisers, and tax advisory firms, to the extent they accompany or execute certain transactions. Obligations are limited to transaction-related activities; general legal advice does not fall within scope.

Commercial obligated parties (nos. 10, 13–16): Estate agents, trust and company service providers, gambling operators, art dealers, and goods traders for cash payments of at least EUR 10,000. This group is frequently subject to IHK supervision and has historically attracted attention in FATF country evaluations for deficiencies in GwG implementation.

A structured entry into the review process is also provided in the CIVAC FAQ.

§ 2 no. 1 GwG refers to credit institutions under § 1 para. 1 of the Banking Act (KWG). This includes banks, savings banks, cooperative banks, and institutions with banking authorisation for individual services such as payment processing or lending. § 2 no. 2 GwG covers financial services institutions under § 1 para. 1a KWG, including investment advisers, asset managers, and factoring companies.

This group is subject to the most extensive due diligence obligations: enhanced due diligence for high-risk customers under § 15 GwG, the obligation to conduct ongoing business relationship monitoring under § 10 para. 1 no. 5 GwG, and PEP screening for politically exposed persons under § 1 para. 12 GwG. BaFin regularly examines whether internal systems detect suspicious patterns and whether transaction monitoring is consistent with the risk appetite reflected in the risk analysis.

Fintech companies holding payment institution licences under the Payment Services Supervision Act (ZAG) also fall under § 2 no. 3 GwG and are therefore fully subject to the GwG. Distinguishing BaFin-regulated companies from unregulated fintechs is complex in practice; where in doubt, a query to BaFin is advisable to obtain legal certainty.

§ 2 no. 5 GwG covers insurance undertakings that fall within the life insurance segment. This includes traditional life insurance, pension insurance, endowment insurance, and unit-linked products. Pure non-life insurers (motor, liability, property) do not fall under § 2 GwG.

The distinction is practically relevant for composite insurance groups: the GwG obligations apply exclusively to the life insurance business area. It is nonetheless advisable to prepare a group-wide risk analysis covering all lines of business and explaining why certain areas are excluded. This demonstrates regulatory diligence to the supervisory authority.

Credit insurance and surety insurance may, depending on product design, carry money laundering risks; for these borderline cases, the classification should be documented through a legally sound risk analysis under § 5 GwG. Where this documentation is absent, silence alone may be treated as insufficient fulfilment of obligations.

§ 2 no. 10 GwG covers estate agents who commercially broker the purchase or rental of real property. The obligation applies regardless of the transaction value, once the brokerage activity is carried on commercially. Since the 2020 GwG amendment, landlords also fall under § 2 GwG where they agree monthly rents of EUR 10,000 or more.

Due diligence obligations under § 10 GwG require the identification of contractual parties (buyer, seller, and any beneficial owners), a search of the Transparency Register under § 11a GwG for beneficial owners, and — in cases of elevated risk — enhanced due diligence under § 15 GwG. Elevated risk exists in particular where politically exposed persons (PEPs) are involved or payment is made in cash.

In IHK audit practice, estate agents are particularly scrutinised for the existence of a written risk analysis and training records. The absence of both constitutes a serious organisational deficiency. A template for the risk analysis under § 5 GwG for estate agents is included in the CIVAC Workspace.

§ 2 no. 16 GwG obliges persons who trade commercially in goods where they accept or make cash payments of at least EUR 10,000 in connection with a transaction. Goods within the meaning of this provision are all moveable items; this includes car dealers, jewellers, art traders, electronics retailers, and many other sectors.

The EUR 10,000 threshold applies per transaction and regardless of the number of cash payments involved; splitting a payment into smaller cash instalments (smurfing) to circumvent the threshold constitutes a money laundering act under § 261 of the Criminal Code (StGB) and triggers an enhanced reporting obligation. Upon reaching the threshold, the goods trader must apply the identification obligations under § 10 GwG and document the transaction.

Since 2021, stricter requirements apply to art traders and art brokers (§ 2 no. 13 GwG), who are subject to obligations for transactions of EUR 10,000 or more regardless of the payment method. The FIU has repeatedly highlighted elevated abuse risks in the art sector; galleries and auction houses should carefully review their classification under § 2 GwG.

§ 2 para. 1 no. 10a GwG covers lawyers and patent attorneys, § 2 no. 11 GwG covers notaries, and § 2 no. 12 GwG covers auditors, chartered accountants, tax advisers, and their firms — but only to the extent they carry out certain activities. These include: conducting real property or corporate transactions on behalf of clients, managing cash, securities, or other assets, opening or managing bank, savings, or securities accounts, and forming, acquiring, or disposing of companies.

General legal and tax advisory services without a transaction nexus are expressly excluded from § 2 GwG; this protects legal professional privilege under § 43a of the Federal Lawyers' Act (BRAO). The distinction is difficult in individual cases, since many mandates contain both advisory and transactional elements.

Law firms and advisory practices that fall under § 2 GwG must prepare a firm-wide risk analysis and trigger due diligence obligations for certain types of mandate. The obligation to appoint a GwB applies to this group only where the supervisory authority so directs for the specific firm size and structure, or where the internal structure of the firm requires it.

The review of whether a company falls under § 2 GwG should be conducted in a structured three-step process:

1. Activity analysis: What services does the company provide? Do any of these fall within one of the 16 categories in § 2 para. 1 GwG? Useful sources: the BaFin Interpretative and Application Guidelines (AuA) and the information circulars of the competent IHK.
2. Supervisory allocation: Which supervisory authority would be competent for the company — BaFin, IHK, professional chamber, or state authority? Jurisdiction influences audit practice and potentially notification obligations.
3. Risk profile documentation: Even where membership of the obligated group is uncertain, a documented review decision is advisable. A written internal memorandum setting out the reasons why the company does not fall under § 2 GwG provides protection in the event of a later audit.

For companies that confirm the obligation, compliance begins immediately with the preparation of the risk analysis under § 5 GwG, the establishment of internal safeguarding measures under § 6 GwG, and the appointment of the money laundering compliance officer under § 7 GwG.

Once it is established that a company falls under § 2 GwG, the following statutory obligations arise immediately:

• Risk analysis (§ 5 GwG): Written assessment of the company-specific money laundering and terrorist financing risks, to be updated annually.
• Internal safeguarding measures (§ 6 GwG): Internal policies, procedures, and controls for risk management; employee training at least once annually; reliability checks on employees in money-laundering-relevant positions.
• Customer due diligence (§§ 10–13 GwG): Identification of contractual parties and beneficial owners prior to establishing a business relationship; ongoing monitoring of existing relationships.
• Documentation and retention (§ 8 GwG): Retention of all relevant records for at least five years.
• Appointment of a GwB (§ 7 GwG): Mandatory for most categories of obligated parties; exceptions for micro-enterprises require a case-by-case assessment.
• Suspicious activity reporting (§ 43 GwG): Immediate reporting to the FIU where there is reasonable suspicion.

Each of these obligations independently carries a fine sanction. A company that prepares the risk analysis but cannot demonstrate training breaches § 6 GwG as a separate matter.

CIVAC is a compliance platform and Officer-as-a-Service that enables obligated parties under § 2 GwG to build all GwG compliance structures in a structured manner: risk analysis template under § 5 GwG, training modules with attendance records under § 6 GwG, appointment deed and GwB function under § 7 GwG, and audit-proof documentation filing under § 8 GwG. Licence the workspace for your internal officers or appoint our officers directly.

The CIVAC Workspace contains 490 ready-to-use audit templates. For the GwB function, the CIVAC SLA applies: appointment deed, signed, filed, verifiable — within two working days. The audit log secures every process step with a timestamp, so that the auditor can immediately locate all evidence when required.

For companies that have just established that they fall under § 2 GwG and have not yet built any GwG structures, CIVAC offers a rapid start with clearly defined milestones. Turn reading into a mandate. Write to info@civac.de or use the contact form on civac.de.