The German Federal Bar (BRAK) has published an explanatory note on the increased AML obligations for lawyers under the new EU Anti-Money Laundering Regulation (EU 2024/1624). As the Regulation will be directly applicable from 10 July 2027, BRAK advises strongly that law firms subject to AML rules should start preparing now, to ensure that the new structures and processes are in place in time. Lawyers are subject to AML Rules when carrying out specific “catalogue activities” defined in the regulation, which include real estate transactions, financial transactions.
The new EU AML Rules are significantly more detailed and demanding than previous rules. Law firms must build robust internal systems capable of identifying, assessing, and mitigating AML risks. These include a mandatory, firmwide risk assessment and greater documentation and reporting duties. They are required to maintain extensive written records of risk assessments, CDD activities, and decision-making processes. The new rules also introduce the obligation to report inconsistencies detected during CDD checks, in addition to suspicious activity reports.
The regulation formalises a “three lines of defence” governance model for AML compliance, with responsibilities for management/compliance, a money-laundering reporting function and an audit function, which may be combined in the case of smaller or low risk firms. The BRAK guidelines note that regional bar associations will continue to act as AML supervisors for lawyers under the revised EU framework, and that their supervisory approach will be shaped by future guidance and technical standards issued at an EU level (including AMLA)