Business German finance ministry raided in money laundering probe

German finance ministry raided in money laundering probe

German finance ministry raided in money laundering probe
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© Reuters. FILE PHOTO: 20 Euro banknotes are viewed in a divulge illustration, August 1, 2016. REUTERS/Regis Duvignau/Illustration//File Record

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By Hans Seidenstuecker and John O’Donnell

BERLIN/FRANKFURT (Reuters) -German prosecutors raided the finance and justice ministries on Thursday as fragment of an investigation into the government’s anti-money laundering company, striking the highlight on Germany’s failings in tackling financial crime.

The probe into the Financial Intelligence Unit, an company of the finance ministry below Social Democrat chancellor candidate Olaf Scholz, is taking a glimpse at whether the unit become as soon as steered to ignore warnings from banks of suspect payments to Africa.

The raids come at a pivotal 2d for Scholz, who thought polls counsel has a real probability of becoming German chancellor in national elections on Sept 26.

The FIU, collectively with the Germany’s financial regulator, Bafin, each below the finance ministry, hold previously been criticised for failing to detect complications at payments firm Wirecard, which collapsed within the country’s ideal put up-battle fraud scandal.

Opposition lawmakers had been swift to criticise Scholz.

“Here’s a security possibility for Germany,” said lawmaker Fabio De Masi. “We desire a financial police with prison journey. Germany is a paradise for criminals.”

The Finance Ministry said it had bolstered group on the FIU company from 165 to bigger than 460, besides giving it extra responsibility and technical resources.

The ministry said in an announcement that it supported the investigation and illustrious that suspicion become as soon as now now not directed on the ministry’s workers.

The probe comes at a crucial 2d, because the country’s anti-money laundering efforts are below review by the Financial Circulation Job Pressure (FATF), a world physique that teams countries from the united states to China, to form out financial crime.

SUSPECT TRANSACTIONS

The FIU has long struggled to keep up with the tens of thousands of warnings it receives about suspect money transfers, in step with other folks aware of its work. It entirely stopped the deliver of fax machines to receive such experiences from banks within the past few years, one German dependable has steered Reuters.

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

He said they’d searched the ministries to undercover agent whether the company had been steered to ignore the suspect money flows.

Prosecutors said the company become as soon as alerted by banks ensuing from considerations the money become as soon as linked to trafficking of hands and treatment and terrorism financing, saying that the FIU took trace of the file but didn’t forward it to guidelines enforcement agencies.

The prosecutors said they had been also taking a glimpse into the truth that for the explanation that FIU took over management of cash laundering in 2017, experiences of suspicious deliver hold dropped drastically.

They said that outdated searches of the FIU had revealed that there had been huge verbal replace with the ministries that had been searched on Thursday.

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