Germany announces crackdown on money laundering

International

-DW News

Berlin,
Aug
26:
The
German
government
has
announced
plans
to
crack
down
on
financial
crime
in
a
bid
to
end
what
Finance
Minister

Christian
Lindner
called
Germany’s
“reputation
as
a
money
laundering
paradise.”

“We
have
the
courage
for
great
success,”
Lindner
said
in
a
statement
this
week.
“With
our
powerful
and
effective
structures,
we
will
make
sure
that
honest
businesspeople
will
be
protected
from
those
who
don’t
stick
to
the
rules.”

The
“keypoint
paper”
released
by
Lindner’s
ministry
on
Thursday
boiled
down
to
three
initiatives:
The
creation
of
a
new
federal
authority
to
fight
financial
crime,
a
pledge
to
train
more
experts,
and
a
pledge
to
accelerate
the
digitalization
and
interconnection
of
the
relevant
property
registers
and
records.

The
new
Federal
Financial
Crime
Agency,
as
it
is
called
in
the
paper,
is
meant
to
bundle
and
develop
expertise
and
focus
on
what
the
ministry
calls
a
“follow-the-money
approach.”
This
agency,
the
paper
goes
on,
will
be
closely
integrated
with
the
Financial
Intelligence
Unit
(FIU),
where
suspicious
transactions
are
first
reported.

Toilet
tax
evasion
trial
opens
in
Germany

Michael
Findeisen,
who
spent
several
years
running
the
Finance
Ministry’s
money
laundering
division
and
is
now
a
fellow
at
Finanzwende,
an
anti-money-laundering
campaign
group
said
that
other
European
countries
might
have
a
poorer
track
record,
but
Germany
had
a
bigger
problem,
because
of
the
size
of
its
economy.

“Germany
is
a
powerful
economic
force,
so
it
is
interesting
for
investors
—
both
legal
and
illegal
investors,”
he
told
DW.
“There
is
a
lot
of
illegal
Italian
money,
for
example,
invested
in
the
German
finance
sector.
That’s
why
the
standards
need
to
be
stricter
in
Germany.”

Cash
still
plays
a
key
role
in
German
businessand
major
purchases,
such
as
buying
property,
can
still
be
transacted
in
cash
—
a
gap
the
government
has
promised
to
close.
But
the
German
business
world
still
has
a
cash-based
culture.
Despite
EU
efforts,
the
German
Federal
Bank
was
initially
against
abolishing
the
€500
note,
which
was
then
discontinued
two
years
ago.
Germany
has
also
consistently
resisted
international
regulations
imposing
a
€5,000
limit
on
cash
business
transactions.

A
better
Financial
Action
Task
Force
report

The
announcement
of
the
Finance
Ministry’s
new
initiative
was
timed
to
coincide
with
—
and
perhaps
head
off
criticism
arising
from
—
a
new
evaluation
of
Germany
from
the
Financial
Action
Task
Force(FATF),
an
inter-government
body
that
sets
international
standards
for
policing
money
laundering
and
terrorist
financing.

The
FATF
gave
Germany
a
mixed
report
card:
While
the
country
had
made
“significant
reforms”
in
the
last
five
years,
it
was
dragging
its
feet
in
implementing
them:
“The
transition
has
been
challenging
and
Germany
needs
to
continue
to
prioritize
the
implementation
of
these
reforms
at
the
operational
level
and
continue
to
enhance
the
collection,
analysis,
dissemination,
and
use
of
financial
intelligence.”

“Germany
could
be
more
proactive
in
using
the
targeted
financial
sanctions
regime
as
a
preventive
measure
to
freeze
terrorist
assets,”
the
FATF
added.

Germany
reactivates
coal-fired
power
plant
to
save
gas

‘Symbolic
politics’

But
campaigners
have
been
much
more
scathing
of
the
government’s
latest
crackdown
efforts.
“There’s
more
to
a
paradigm
shift
in
fighting
money
laundering
than
creating
a
new
agency,”
Konrad
Duffy,
finance
crime
specialist
at
Finanzwende,
told
DW
in
a
statement.
“Apart
from
powerful
authorities,
we
need
more
transparency
with
the
value
of
fortunes,
a
quick
implementation
of
the
promised
ban
on
buying
real
estate
with
cash,
and
better
possibilities
for
confiscating
dirty
money.”

Findeisen
had
even
more
drastic
words
for
Lindner’s
statement,
which
he
dismissed
as
“symbolic
politics.”

This,
according
to
Findeisen,
is
because
Lindner’s
approach
does
nothing
to
mitigate
Germany’s
structural
problems.
“The
problem
in
Germany
is
that
we
have
a
very
strong
federal
system,”
he
said.
“All
the
criminal
prosecution
is
in
the
hands
of
the
states,
while
the
preventative
capacities
are
run
by
the
federal
government,
with
a
few
exceptions.
And
Lindner
hasn’t
even
spoken
to
the
states
yet.”

In
other
words,
Findeisen
argues,
that
all
the
government
is
proposing
is
to
bring
together
the
existing
federal
powers
under
one
roof.
“The
hard
part
is
to
unify
the
preventative
and
the
repressive
approaches,”
he
said.
The
best
quick
fix
for
this,
according
to
Findeisen,
would
be
to
shift
federal
resources
to
the
states
so
that
they
can
recruit
more
prosecutors
of
financial
crime.

The
other
structural
problem
that
the
ministry
is
failing
to
address
is
the
wage
imbalance
between
the
public
and
private
sectors.
“It’s
nonsense
what
he’s
written
there:
That
we’ll
train
new
financial
investigators,”
said
Findeisen.
“Our
problem
is
that
good
financial
investigators
are
very
rare.
Why?
Because
they’re
poorly
paid.
The
good
people
are
all
taken
by
the
banks
as
compliance
officers,
where
they
can
earn
€8,000
to
€10,000
a
month
for
the
simplest
compliance
jobs.”

In
short,
Findeisen
was
scathing:
“This
is
a
press
statement
that
was
written
very
quickly
but
has
no
substance
whatsoever,”
he
said.
“If
we
talk
in
three
years
I
think
we’ll
see
that
none
of
this
was
implemented.

Source: DW