BaFin — the Bundesanstalt für Finanzdienstleistungsaufsicht, or Federal Financial Supervisory Authority — is the primary financial regulator and AML supervisor in Germany. Established in 2002 by the FinDAG, BaFin was created by merging three previously separate supervisory bodies covering banking, insurance, and securities into a single integrated authority, and is headquartered across two cities: Bonn and Frankfurt. BaFin operates under the dual mandate of ensuring the stability and integrity of the German financial system and protecting consumers. In the AML context, BaFin supervises banks, payment institutions, insurance companies, investment firms, and other financial sector obliged entities for compliance with the German Money Laundering Act (Geldwäschegesetz — GwG), which transposes the EU AML Directives into German national law. BaFin also houses Germany’s national Financial Intelligence Unit (the Zentralstelle für Finanztransaktionsuntersuchungen, or FIU), although the FIU operates as a functionally separate unit within the General Customs Directorate.
BaFin has attracted significant international attention in recent years, particularly following the Wirecard scandal — in which a German payment company fraudulently inflated its balance sheet by €1.9 billion before collapsing in 2020 — which exposed serious shortcomings in BaFin’s supervisory approach and triggered a substantial internal reform programme. In the aftermath, BaFin significantly strengthened its enforcement posture and financial crime supervision capabilities, and the German government amended the GwG to expand BaFin’s powers.
BaFin website: https://www.bafin.de/DE/home_node.html
