Observe legal regulations for transfers, cash, and luxury goods
The monitoring pressure for asset transactions from abroad to Germany and vice versa has increased enormously in recent years. This is due to various reasons, including the fight against tax evasion and black money, which makes transferring money or assets from abroad more difficult. However, in a global world with numerous international business relationships, international money transactions are inevitable. This also applies to private payments, for example, to financially support family members abroad or for inheritances with international ties.
Whether for business or personal reasons, there are a number of regulations to consider when transferring international assets to avoid violating applicable law and incurring criminal liability, according to attorney Michael Rainer, contact person for economic criminal law at MTR Legal Lawyers.
Comply with Money Laundering Act for Transfers
For transfers from abroad to Germany, it is essential to comply with the Money Laundering Act (GwG). The GwG aims to combat money laundering, terrorism financing, and tax evasion. The law specifically requires banks and other financial service providers to immediately report suspicious financial transactions to the Central Office for Financial Transaction Investigations (FIU). Suspect transactions may include payments from abroad. Financial institutions are under pressure to report suspicious transactions, as they otherwise risk criminal liability under the GwG.
The reporting obligation under the GwG not only applies to banks but also includes goods or art dealers for transactions worth at least 10,000 euros. They must also report transactions involving high-value goods where they make or accept cash payments of at least 2,000 euros.
Declaring Cash on Entry
In addition to the requirements for electronic payment transactions, it is not straightforward to bring large amounts of cash into Germany. Amounts of at least 10,000 euros or the equivalent value in another currency, securities, or traveler’s checks must be declared when entering or leaving the European Union (EU). Failure to comply with this reporting obligation can result in heavy fines. Therefore, anyone wishing to bring a large sum of cash from Switzerland to Germany, for example, must register it accordingly. This reporting obligation is another component in the fight against money laundering and terrorism financing.
Introduction of Luxury Goods
Instead of cash, an attempt can also be made to introduce luxury goods into Germany. However, import regulations must be adhered to, and customs authorities take violations seriously. Failure to comply with the reporting obligation can result in fines and the initiation of a tax criminal procedure.
The vigilant eye of customs on the import of cash or luxury goods was demonstrated just a few weeks ago in February 2024 at the Bietingen border crossing. Two Polish travelers coming from Switzerland wanted to enter Germany. When asked by customs officers whether they wished to declare any goods or cash subject to declaration, the two denied it. They had 3,000 euros in cash but no goods to declare, as customs stated in a press release dated February 23, 2024.
Smuggled Luxury Watches
However, the customs officers took a closer look and noticed a promotional gift in the form of perfume from a luxury watch brand from Switzerland. The driver then admitted that he had bought a luxury watch of this brand in Switzerland. The value of the watch was 13,700 euros. The customs officers continued their inspection and found that the passenger had also purchased a luxury watch worth approximately 42,000 euros. In addition, they discovered more than 10,000 euros in cash, which should have been declared as well.
The violation will be costly for the two offenders. In addition to import duties amounting to over 10,500 euros, a tax criminal procedure was also initiated. Moreover, they may face criminal prosecution.
Regardless of whether it concerns luxury goods, cash, or transfers, the legal provisions for transferring assets from abroad to Germany must be observed.
MTR Legal Lawyers provide advice on economic criminal law.
Get in contact with us today!
