Ruling [DEU] ¦ German Court Upholds Public Naming in Money Laundering Enforcement

Reputational risk as regulation: lessons from a German AML ruling

A German administrative court has rejected a lawsuit brought by a luxury jeweler against the public publication of an asset confiscation measure on the authority’s website. The decision confirms that regulators may publicly identify businesses involved in serious breaches of anti-money laundering obligations, even when the underlying misconduct dates back several years.

The claimant, a sole trader operating a high-end jewelry and watch business, challenged the publication of a confiscation order issued in 2022. The order followed findings that, between 2013 and 2014, the business repeatedly failed to submit legally required suspicious transaction reports despite receiving large cash payments later linked to drug-related proceeds. Criminal investigations against the business owner were discontinued, but the administrative confiscation of profits remained in place.

The publication requirement under German AML law

At the heart of the dispute was Section 57 of the German Money Laundering Act, which requires authorities to publish final and binding measures or fines imposed for violations of AML rules. This provision implements Article 60 of the EU’s Fourth Anti-Money Laundering Directive and is designed to strengthen compliance by making enforcement visible to the market.

The authority published details of the confiscation, including the nature of the violation, the amount confiscated, and the responsible business. The claimant argued that this amounted to an unlawful “internet pillory”, violated fundamental rights under German constitutional law and the EU Charter of Fundamental Rights, and should at least have been anonymized.

Bastian Schwind-Wagner _Follow

"The judgment shows how firmly courts now support transparency as a tool in the fight against financial crime. Public disclosure is treated not as an exceptional sanction, but as a normal and lawful consequence of serious AML failures once a case is final.

For businesses in high-risk sectors, the decision underlines that reputational risk is inseparable from compliance risk. Even years after the underlying conduct, regulators may still lawfully inform the market, making early and consistent AML compliance a matter of long-term survival rather than short-term formality."

No violation of human dignity or fundamental rights

The court rejected the argument that public naming constituted degrading or inhuman treatment under Article 4 of the EU Charter. While acknowledging that the publication was intended to have a reputational impact and thus an element of “naming and shaming”, the court found that the measure did not reach the required level of severity. The publication did not involve physical coercion or extreme psychological pressure and was limited to factual information about a legally established violation.

The judges emphasized that EU and national legislators had deliberately chosen transparency as a tool of prevention. The reputational effect was not an unintended side effect but part of the regulatory design aimed at discouraging non-compliance in sectors vulnerable to money laundering.

Business freedom and proportionality

The claimant also argued that the publication threatened her professional existence, particularly because luxury watch manufacturers might terminate distribution agreements if her name appeared on an official AML violations list. The court accepted that publication interferes with freedom of occupation, but classified the interference as a regulation of professional practice rather than a restriction on access to the profession itself.

Crucially, the court found no sufficient evidence that publication would cause an existential threat to the business. The claimant had provided turnover figures but failed to demonstrate how the loss of specific brand partnerships would translate into insolvency or an inability to continue operating. In one case, the court noted that the claimant was contractually obliged to disclose AML issues to a manufacturer regardless of any public publication, breaking the causal link between disclosure and reputational damage.

Confiscation as a publishable measure

Another key issue was whether a confiscation order under administrative offense law qualifies as a “measure” that may be published under the AML Act. The court took a broad view, holding that any final action taken because of an AML violation falls within the scope of the publication requirement. It was irrelevant that confiscation serves primarily to remove illicit gains rather than to punish wrongdoing. What mattered was the connection to a breach of AML duties.

The court also confirmed that publishing the business under its registered trade name was lawful. For sole traders, the trade name is legally inseparable from the individual and represents how the business participates in the market.

No retroactive punishment

The claimant’s reliance on the constitutional ban on retroactive criminal punishment also failed. The court held that AML publication is not a criminal penalty but a preventive regulatory measure. Even if the underlying violations occurred before the publication rule entered into force, the publication was triggered by a final confiscation decision issued years later. This amounted to permissible retroactive reference, justified by overriding public interests in financial system integrity.

Implications for AML enforcement

This judgment reinforces the legitimacy of public disclosure as an enforcement tool in anti-money laundering supervision. Courts are willing to accept significant reputational consequences for businesses if they result from legally established AML violations and serve a broader preventive purpose.

For obligated entities, the message is clear. Even in the absence of criminal convictions, serious and repeated compliance failures can lead to lasting public exposure. Strong AML systems, timely suspicious transaction reporting, and thorough documentation are not only regulatory duties but also essential safeguards against long-term reputational risk in an increasingly transparent enforcement environment.

Dive deeper

• openJur 2025, 15160 ¦ VG Ansbach, Urteil vom 16.06.2025 - AN 4 K 23.1389 ¦ Link