German finance ministry raided in cash laundering probe

By Hans Seidenstuecker and John O’Donnell

BERLIN/FRANKFURT (Reuters) -German prosecutors raided the finance and justice ministries on Thursday as piece of an investigation into the authorities’s anti-cash laundering company, striking the spotlight on Germany’s failings in tackling monetary crime.

The probe into the Financial Intelligence Unit, an company of the finance ministry below Social Democrat chancellor candidate Olaf Scholz, is taking a undercover agent at whether the unit was told to brush apart warnings from banks of suspect payments to Africa.

The raids attain at a pivotal 2nd for Scholz, who conception polls counsel has a exact likelihood of becoming German chancellor in national elections on Sept 26.

The FIU, alongside with the Germany’s monetary regulator, Bafin, both below the finance ministry, delight in beforehand been criticised for failing to detect issues at payments company Wirecard, which collapsed within the nation’s biggest put up-war fraud scandal.

Opposition lawmakers delight in been swift to criticise Scholz.

“Right here’s a security likelihood for Germany,” stated lawmaker Fabio De Masi. “We want a monetary police with felony expertise. Germany is a paradise for criminals.”

The Finance Ministry stated it had bolstered staff at the FIU company from 165 to bigger than 460, besides giving it extra accountability and technical sources.

The ministry stated in an announcement that it supported the investigation and celebrated that suspicion was now not directed at the ministry’s staff.

The probe comes at a necessary 2nd, because the nation’s anti-cash laundering efforts are below overview by the Financial Action Task Force (FATF), a world body that groups international locations from the US to China, to take care of monetary crime.

SUSPECT TRANSACTIONS

The FIU has lengthy struggled to withhold up with the tens of hundreds of warnings it receives about suspect cash transfers, fixed with other folks conscious of its work. It finest stopped the utilization of fax machines to procure such experiences from banks within the past few years, one German legit has told Reuters.

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

He stated that they had searched the ministries to explore whether the company had been told to brush apart the suspect cash flows.

Prosecutors stated the company was alerted by banks thanks to issues the cash was linked to trafficking of fingers and medications and terrorism financing, announcing that the FIU took advise of the file nonetheless did not ahead it to regulations enforcement companies.

The prosecutors stated they delight in been additionally taking a undercover agent into the reality that since the FIU took over withhold watch over of cash laundering in 2017, experiences of suspicious activity delight in dropped critically.

They stated that old searches of the FIU had printed that there had been broad dialog with the ministries that delight in been searched on Thursday.

($1 = 0.8453 euros)

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