German authorities raid finance, justice ministries in money laundering probe, report shows

Special customs unit is suspected of not having properly forwarded money laundering suspicion reports to law enforcement authorities

Oliver Towfigh Nia   | 09.09.2021
German authorities raid finance, justice ministries in money laundering probe, report shows


German prosecutors have raided the finance and justice ministries over allegations that information on money laundering reports was withheld, newsweekly Der Spiegel reported Thursday.

The raids ordered by prosecutors from the northwestern city of Osnabrueck are part of a probe into possible obstruction of justice by an agency that investigates money laundering.

According to the report, the investigation is directed against persons responsible for the Financial Intelligence Unit (FIU), a special unit of the Finance Ministry’s customs service that fights money laundering.

The unit is suspected of not having properly forwarded to law enforcement authorities money laundering suspicion reports from banks "amounting to millions" of euros.

The prosecutor's office had already searched FIU headquarters in Cologne in July 2020. Documents were secured there, said a spokesman for the authorities. From this, it emerged "that there was extensive communication between the FIU and the ministries now searched." The current searches also aim to identify possible specific suspects.

The starting point of the investigation was a suspicious transaction report from a bank in June 2018. It involved a transfer to Africa of more than one million euros ($1.18 million). The bank suspected that the background of the payments was terrorist financing as well as arms and drug trafficking.

"The FIU took note of this report, but did not forward it to German law enforcement authorities," the spokesman said, so the payment went through unhindered.

The Justice Ministry said on Thursday that it was fully cooperating with the investigators. The Finance Ministry also announced that they "of course fully support the authorities."

The investigations are not directed against employees of the ministry.

All financial institutions in Germany are obliged to report suspicious account movements to the FIU. Germany is widely considered a money-laundering paradise for criminals.

The FIU reported a 50% surge in suspected cases of money laundering and terrorist financing in 2019.

The German parliament has passed a series of tough anti-money laundering laws to fight the problem and get the country in line with EU guidelines. As part of the changes, the legislation imposed stricter regulations forcing real estate brokers, notaries, precious metals dealers, and auction houses to declare suspicious transactions.

The Berlin-based anti-corruption group Transparency International had urged Germany to enact reforms after reporting that €30 billion of "dirty money" was funneled into the German real estate sector in 2017.

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