How can the EU Money Laundering Directive be implemented in larger law firms?

Dr. Peter Berg knows that implementing the latest EU Money Laundering Directive in law firms can sometimes be a complex undertaking. His experience is about working with a Magic Circle, defining the processes in Germany in conjuction with the UK Headquarters.

German lawyers have to comply with fine-protected requirements resulting from the implementation of the EU’s Fourth Money Laundering Directive by national legislators since Jan. 1, 2020. They must have a risk management system appropriate to their business activities. Thus, in many international law firms we advise, the implementation of the rather strict implementations by the legislator as in Germany, Belgium and Luxembourg collides with rather “lax” implementations in the UK or US. Instead of following the most stringent approach, the central units based in the main UK and US locations want to keep “their” approach. Nevertheless, they will have to comply with the “stricter” requirements in order for German lawyers to be able to demonstrate sufficient scrutiny under German law when, for example, they responsibly advise on transactions. Access to databases is just one aspect that needs to be regulated, which sometimes causes high organizational resistance.

There are a number of organizational challenges here that can only be brought to fruition with exact process design and its documentation. For example, the databases with the clients and the economic beneficiaries are often located in the main offices of international law firms, i.e. in London or New York, etc.. But even in medium-sized German law firms, this process must be well regulated in order not to miss any reporting obligations.

This is where our REAL TIME CHANGE approach pays off, and where Dr. Peter Berg works intensively with Magic Circle and other law firms as a process designer.

If you would like to know more about how good process management succeeds here, Dr. Peter Berg would be happy to hear from you on 004989 122816-12!