Anti-Money Laundering Law
Also: GwG, AML Law, Anti-Money Laundering Act
The Anti-Money Laundering Law (GwG) obliges precious metal dealers to identify their customers above certain thresholds and to report suspicious transactions.
The Anti-Money Laundering Law (GwG) in Germany transposes European Anti-Money Laundering Directives (AMLD) into national law. Since its fundamental revision in 2017, it also applies to commercial trading in precious metals, jewellery, and antiques. Anyone who buys or sells gold, silver, or other precious metals as a business is a so-called "obliged entity" under the law and must fulfil a range of due diligence obligations.
Who is affected?
Obliged entities under § 2 GwG in the precious metals sector include in particular:
- Gold dealers, assay offices, and precious metal refineries
- Jewellers and jewellery retailers
- Pawnshops and purchasing outlets for scrap gold or broken gold
- Coin dealers who trade commercially in bullion coins or collector coins
Private sellers are generally not obliged — the due diligence obligations fall on the commercial counterparty.
The most important thresholds
| Situation | Threshold | Obligation |
|---|---|---|
| Cash payment when purchasing precious metals | from €2,000 | Customer identification |
| Other transactions (bank transfer) | from €15,000 | Customer identification |
| Suspicion of money laundering | regardless of amount | Report to FIU |
| Transactions with high-risk third countries | from €1 | Enhanced due diligence |
The cash limit of €2,000 (introduced in 2020 as part of the 5th EU Anti-Money Laundering Directive) is particularly relevant for the precious metals trade. It is well below the general cash payment threshold in other sectors and makes the so-called over-the-counter transaction — i.e. anonymous purchase without proof of identity — unlawful above this amount.
Obligations in detail
Customer due diligence (KYC – Know Your Customer):
- Identification of the contracting party using official photo ID
- Identification of the beneficial owner (e.g. for purchases made through third parties)
- Obtaining information about the purpose and nature of the business relationship
- Ongoing monitoring of existing business relationships
Internal safeguards (for larger companies):
- Appointment of a money laundering officer
- Risk analysis and internal guidelines
- Employee training
- Record-keeping and retention obligations (5 years)
Suspicious activity report to the FIU: If there are indications of money laundering or terrorist financing, the dealer must notify the Financial Intelligence Unit (FIU) at the Customs Criminal Investigation Office — regardless of thresholds and before executing the transaction.
Consequences for violations
Violations of the GwG can be prosecuted as an administrative offence with fines of up to €150,000 (in serious cases up to €5 million or 10% of annual turnover). Supervision of precious metal dealers rests with the competent authorities in each federal state (e.g. public order offices, trade supervisory authorities).
Distinction from tax regulations
The GwG is a prevention law governing the combating of money laundering — it makes no statements about the tax treatment of profits from precious metal sales. Separate tax law provisions apply to questions regarding the speculative holding period (§ 23 EStG) or the VAT exemption for investment gold. Note: this does not constitute tax or legal advice.
When selling precious metals, sellers should expect reputable dealers to request a copy of an ID document from €2,000 in cash — this is a statutory obligation, not voluntary.
Key takeaway
The GwG obliges precious metal dealers to identify customers from €2,000 in cash and to report suspicious transactions; private buyers and sellers are not directly affected but must expect their commercial counterparty to be required to fulfil these obligations.