Fight against money laundering: Bad testimony for Germany

Ob Germany is a paradise for money launderers, the report of the money laundering authority Financial Action Task Force (FATF) based at the OECD is silent. In their country report published on Thursday, the experts confirm that Germany has made progress in the fight against money laundering and terrorist financing. Nevertheless, they still see a lot of catching up to do and criticize the fact that there is still no upper cash limit in this country. The central point of criticism of the FATF is the unclear responsibilities in combating money laundering between the authorities at federal and state level.

The Federal Minister of Finance has Christian Lindner reacted in the past few days with his plans to create a Federal Financial Criminal Police Office, as reported by the FAZ. Experts estimate the amount that is laundered in Germany every year at up to 100 billion euros. The money comes from criminal activities such as human or drug trafficking, but it can also include tax evasion or the circumvention of sanctions such as against Russia. While the FATF praises the improved and expanded anti-money laundering rules in recent years, it doubts their effectiveness.

“It is not clear whether the measures at operational level have led to full results,” write the FATF experts. They point to the low number of criminal money laundering cases, which is not consistent with the risk profile of Germany as a large economy. The weaknesses of the Financial Intelligence Unit (FIU), which is located at customs, have been known for some time. There, within ten years, suspicious activity reports in 2020 have increased twelvefold to more than 144,000, but only fewer than 800 were criminally relevant.

From “insufficient” to just “sufficient”

Compared to the FATF report from 2010, Germany has made progress. At that time, the result – expressed in grades – was “insufficient”, this time it can be described with a brief “sufficient”. Effectiveness is rated “moderate” in seven out of eleven criteria, including oversight and preventive action. This is the second worst of a total of four grades. In the other four areas, including risk policy and international cooperation, Germany received the rating “substantial”, which corresponds to the second best grade. The highest rating (“high”) never existed.

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