German finance ministry raided in money laundering probe

2/2


(c), Reuters. FILE PHOTO: 20 Euro banknotes are seen in a picture illustration, August 1, 2016. REUTERS/Regis Duvignau/Illustration//File Photo

2/2

By Hans Seidenstuecker and John O’Donnell

BERLIN/FRANKFURT (Reuters) -German prosecutors raided the finance and justice ministries on Thursday as part of an investigation into the government’s anti-money laundering agency, putting a spotlight on Germany’s failings in tackling financial crime.

The probe into the Financial Intelligence Unit (an agency under the Finance Ministry of Social Democrat candidate Olaf Scholz) is investigating whether it was instructed to ignore warnings about suspect payments to Africa.

The raids come at a pivotal moment for Scholz, who opinion polls suggest has a good chance of becoming German chancellor in national elections on Sept 26.

Scholz refrained from criticism following the raids. However, the episode casts doubt on Scholz’s ability to become German chancellor in national elections on Sept 26. BaFin and the FIU, the financial regulator that also answer to Scholz, have been under investigation for failing to spot problems with Wirecard, Germany’s largest corporate fraud.

This is a security threat for Germany,” stated Fabio De Masi, a lawmaker. “We need a financial and criminal-focused police. Germany is a haven for criminals. “

Scholz, speaking on a campaign stop in Potsdam, said he had had bolstered staff at the FIU agency to almost 500 from 165 and invested heavily in better equipping it.

He expressed frustration at the raids by saying that prosecutors who had questions could have written them.

The FIU declined comment.

The probe is taking place as the Financial Action Task Force (FATF) examines the country’s efforts to combat money laundering. This global body, which includes countries from China to the United States, investigates financial crime.

SUSPECT TRANSACTIONS

The FIU has long struggled to keep up with the tens of thousands of warnings it receives about suspect money transfers, according to people familiar with its work. One German official told Reuters that the FIU has stopped using fax machines in order to receive reports from banks over the past few years.

A spokesman for the public prosecutors said they launched the enquiry after receiving complaints that the FIU had not acted on millions of euros of suspect transactions, including to Africa, between 2018 and 2020.

He stated that they had looked into ministries to determine if the suspect money flows were being ignored by the agency. Prosecutors claimed that banks alerted the agency because they were concerned about money flowing to terrorist financing and trafficking in arms. They also stated that the FIU had taken note of the report, but didn’t forward it to law enforcement agencies.

The prosecutors said they were also looking into the fact that since the FIU took over control of money laundering in 2017, reports of suspicious activity have dropped drastically.

They stated that prior searches of the FIU had shown that there had been extensive communication between the ministries searched on Thursday.

($1 = 0. 8453 euros)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. CFDs (stocks and indexes), futures and Forex prices are not provided directly by exchanges. They are provided by market makers and prices can differ from actual market prices. Prices are indicative and should not be used for trading. Fusion Media is not responsible for any trading losses that you may incur due to the use of this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Trading the financial markets is one of the most risky investment options. Please be informed about the costs and risks involved.

https://www.investing.com/news/economy/german-prosecutors-search-ministries-in-money-laundering-probe-2611516, Investing.com
Read More

Leave a Reply