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 component of an investigation into the government’s anti-cash laundering company, placing a highlight on Germany’s failings in tackling financial crime.

The probe into the Economic Intelligence Device, an company of the finance ministry under Social Democrat chancellor candidate Olaf Scholz, is hunting at whether it was informed to ignore warnings of suspect payments to Africa.

The raids appear at a pivotal instant for Scholz, who belief polls advise has a great possibility of getting to be German chancellor in national elections on Sept 26.

Scholz rebuffed criticism from lawmakers following the raids, but the episode casts a cloud for the reason that it refocuses focus on the ministry he runs. The FIU and BaFin, the economic regulator, which also solutions to Scholz have been underneath scrutiny for failing to spot challenges at payments business Wirecard, which collapsed previous yr in Germany’s largest company fraud.

“This is a safety risk for Germany,” mentioned lawmaker Fabio De Masi. “We require a economical police with felony know-how. Germany is a paradise for criminals.”

Scholz, speaking on a campaign prevent in Potsdam, said he experienced experienced bolstered employees at the FIU agency to practically 500 from 165 and invested intensely in greater equipping it.

He signalled his stress with the raids, expressing that prosecutors with concerns “could have place them in writing”.

The FIU declined to remark.

The probe comes as the country’s anti-revenue laundering initiatives are less than critique by the Money Action Activity Force (FATF), a world entire body that teams countries from the United States to China, to tackle fiscal criminal offense.


The FIU has extensive struggled to preserve up with the tens of thousands of warnings it gets about suspect cash transfers, in accordance to people today common with its work. It only stopped working with fax equipment to acquire this kind of studies from banks in the earlier number of several years, one particular German formal has told Reuters.

A spokesman for the community prosecutors mentioned they launched the enquiry soon after receiving grievances that the FIU had not acted on tens of millions of euros of suspect transactions, which include to Africa, amongst 2018 and 2020.

He claimed they experienced searched the ministries to see irrespective of whether the company had been told to ignore the suspect funds flows.

Prosecutors claimed the company was alerted by financial institutions because of problems the revenue was connected to trafficking of arms and medicines and terrorism funding, stating that the FIU took observe of the report but did not ahead it to legislation enforcement agencies.

The prosecutors mentioned they have been also seeking into the actuality that given that the FIU took around command of money laundering in 2017, studies of suspicious activity have dropped drastically.

They claimed that past searches of the FIU had disclosed that there had been substantial interaction with the ministries that were being searched on Thursday.

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(More reporting by Hans Seidenstuecker, Christian Kraemer and Holger Hansen in Berlin and Tom Sims in Frankfurt Modifying by Jane Merriman and Carmel Crimmins)