KYC & Customer Due Diligence

"Know Your Customer" is at the heart of every anti-money laundering programme. We help you organise your due diligence obligations under Sections 10 et seq. GwG so that they are legally sound, traceable and quick to apply in day-to-day business.

What the German AML Act requires

Obliged entities must know who they are doing business with. The general due diligence obligations under Section 10(1) GwG include:

1. Identification

Establishing and verifying the identity of the contracting party and, where applicable, the person acting on its behalf.

2. Beneficial owner

Who is really behind the customer? Clarifying the ownership and control structure, including the Transparency Register.

3. Purpose of the business relationship

Obtaining and assessing information on the purpose and intended nature of the business relationship.

4. PEP check

Determining whether the customer or beneficial owner is a politically exposed person.

5. Ongoing monitoring

Keeping an eye on transactions and customer data and keeping information up to date.

Risk-based instead of "one size fits all"

The scope of measures depends on the risk. The GwG distinguishes three levels:

Level	When?	Examples of measures
Simplified due diligence (Section 14 GwG)	Demonstrably low risk	Reduced scope of checks, e.g. when verifying identity
General due diligence (Section 10 GwG)	Standard case	Identification, beneficial owner, PEP check, monitoring
Enhanced due diligence (Section 15 GwG)	Higher risk, e.g. PEPs, high-risk third countries, unusual transactions	Senior management approval, clarifying the source of funds, enhanced monitoring

Our support

Defining clear triggers and thresholds for your industry (e.g. €2,000 in gambling, €10,000 or €2,000 in cash for goods dealers)
KYC checklists and forms covering all mandatory details under Section 11 GwG
Rules for ID checks: permitted documents, security features, copies and retention
Procedure for determining the beneficial owner and using the Transparency Register
PEP and sanctions list screening – manual or tool-supported
Criteria for enhanced due diligence and documentation of approvals
Integration into the risk assessment and training of customer-facing staff

Mandatory details for natural persons

Under Section 11(4) GwG, the following must be collected: first name and surname, place of birth, date of birth, nationality and residential address. Identity is generally verified using a valid official photo ID that satisfies the passport and ID card requirements in Germany (Section 12 GwG).

Important: If an obliged entity cannot fulfil its due diligence obligations, the business relationship must not be established or continued and no transaction may be carried out (Section 10(9) GwG).