German Finance Ministry Raided Over Failing To Report & Investigate Money Laundering

On Thursday German prosecutors raided the finance and justice ministries over accusations that the government’s anti-money laundering agency, the Finance Intelligence Unit (FIU), failed to probe many instances of banks laundering money.

The allegations center on the FIU failing to pass on the reports to the police and the judiciary, however, it is “still unclear if the FIU failed to pass on the reports of fraud of its own accord, or was directed to do so by someone at one or both of the ministries.”

It’s believed the FIU (which is part of the Finance Ministry) looked the other way while cash “in the millions” was laundered, mainly from Africa. 

It’s not the first time that the financial crimes oversight agency has come under scrutiny in recent months: “The organization has also been suspected of covering up fraud committed by the German fintech company Wirecard, which collapsed last year in spectacular fashion,” DW writes.

“This is a security risk for Germany,” one lawmaker, Fabio De Masi said, in the wake of the raid. “We need a financial police with criminal expertise. Germany is a paradise for criminals.”

Prosecutors have said they don’t currently suspect any particular employee of criminal wrongdoing, but a key question that remains over whether the FIU was ordered to ignore warnings from banks over suspect transactions, or whether it was incompetence and lack of resources, despite it recently increasing its staff from 165 to over 460, along with receiving more technical resources.

Federal Ministry of Finance offices in Germany raided this morning as part of an investigation alleging that Financial Intelligence Unit withheld tips from banks on money laundering to the tune of millions of Euro to scuttle investigations.https://t.co/duO0hQtkRv

— Lukas (@LukasLueg) September 9, 2021

According to Reuters, “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.” And further, “It only stopped using fax machines to receive such reports from banks in the past few years, one German official has told Reuters.”