Identity Verification, AML Compliance and KYC in Germany

As a European Union member, Germany has strict regulations around Know Your Customer (KYC), Anti-Money Laundering (AML), data privacy, identity verification and digital services.

Sophisticated partners with expertise in the market and state-of-the-art technology can help organizations accelerate customer verification while ensuring compliance and strong match rate performance.

Examples of AML and KYC Compliance in Germany

The German Anti-Money Laundering Act (GwG) requires financial institutions implement customer due diligence procedures, including identity verification, to prevent money laundering and terrorist financing. The country also enforces the Banking Act, Securities Trading Act, Money Laundering Act for Non-Financial Service Providers, Telecommunications Act and DAC7 for identity verification in specific sectors.

The Federal Financial Supervisory Authority (BaFIN) oversees banks, payment institutions and other financial entities and operates under a mandate to prevent money laundering or terrorist financing.

BaFIN created Interpretation and Application Guidance to help organizations comply with GwG. Data required for identity verification includes name, place of birth, birth date, nationality and residential address. Verification also requires a valid identity document, such as a passport.

Remote onboarding involves a live video chat with the customer.

Brief Overview of Business Verification in Germany

Anyone can establish a business in Germany regardless of nationality or place of residence. German businesses can take the form of corporations, partnerships and foreign-owned branches.

German companies must register with the Public Commercial Register and the Tax Office to receive two identification numbers.

Commercial registration number – Issued by the Public Commercial Register, the number typically has a format of “HR_” followed by five digits and the district court where the company is registered
German value-added tax number – Issued by the Tax Office, it’s a nine-digit number beginning with DE

Obligated entities must verify business information such as company name, the legal form, the commercial register number and address of the registered office.

All companies in Germany also must provide their beneficial ownership information to the Transparency Register.

Obligated entities can access the Transparency Register during due diligence to get beneficial owner information. They then can apply a risk-based approach to verifying those beneficial owners through birth date or address.

Streamlined Verification in Germany

Organizations face a complex regulatory landscape for person and business verification in Germany. Trulioo can help accelerate the process with a broad mix of global and local data sources and market expertise.

Trulioo applies that expertise at every verification step and continually calibrates data match precision to deliver superior onboarding performance. That commitment to optimization helped one of the world’s largest marketplaces increase its verification match rates by 8% in Germany.

When organizations blend that data source coverage and expertise with services such as watchlist screening, adverse media checks and electronic identification for people with digital IDs, they create a holistic onboarding strategy that can lead to industry-leading verification rates in Germany.

The challenges multiply when organizations verify businesses in the country. But when they access a vast data source network and cutting-edge technology, they can accelerate due diligence – from verifying sole proprietorships to unraveling complex UBO structures – on any company operating in the region.

A full suite of in-house verification capabilities, paired with data science and market expertise, can give organizations the insight and flexibility they need to overcome any onboarding challenge in Germany.