Section 17 of the German Anti-Money Laundering Act (AMLA; Section 17 AMLA) stipulates the conditions under which obliged entities may involve others to perform their general due diligence requirements as set out in Section 10 para. 1 nos. 1 to 4 AMLA.
The Act thereby distinguishes between so-called “third parties” (Section 17 para. 1 AMLA) and other “suitable persons and companies” (Section 17 para. 5 AMLA). A third party within the meaning of Section 17 para. 1 AMLA may, in principle, only be another obliged entity. The exercise of the due diligence requirements by such a third party does not require a particular reliability check of such third party and no contractual basis. However, if the due diligence requirements are outsourced to other suitable persons and companies, Section 17 para. 5 AMLA requires a contractual agreement to be in place for this outsourcing. In addition, Section 17 para. 7 AMLA stipulates that prior to such outsourcing, a separate reliability check of the other suitable persons and companies must be performed.
The list of the due diligence requirements in Section 17 para. 1 sentence 1 AMLA, the fulfilment of which can be done by third parties or outsourced to other suitable persons and companies, is exhaustive. Therefore, the continuous monitoring and updating as set out in Section 10 para. 1 No. 5 AMLA as well as the increased due diligence requirements must always be carried out by the obliged entity itself. If the due diligence requirements are being performed by a third party as well as in the case of a contractual outsourcing, the responsibility for fulfilling the general due diligence requirements remains with the obliged entity (Section 17 para. 1 sentence 2 AMLA).
Violations of any of the general due diligence requirements by a third party or other suitable persons and companies are therefore attributed to the obliged entity.