By Elizabeth Hearst for AMLi
German prosecutors have raided the country’s finance ministry as part of an alleged money laundering and obstruction of justice investigation.
Both the country’s finance and justice ministries were raided as part of the investigation, which is believed to be centred around Germany’s Financial Intelligence Unit (FIU).
It’s been reported that prosecutors are investigating whether FIU employees failed to share warnings from banks and financial institutions about possible money laundering “to the tune of millions of euros” to relevant law enforcement agencies, according to local media reports.
The 18-month long investigation saw prosecutors raiding the country’s FIU in July 2020, in which officials uncovered documents highlighting “extensive communication” between the FIU and the finance and justice ministries.
The Financial Times reports that the latest raids were “designed to identify possible suspects”, with a spokesperson revealing their objective was to investigate “whether and to what extent the leadership and officials of the ministries as well as superior authorities were involved in FIU decisions”.
The country’s FIU has previously hit the headlines over its role in the Wirecard scandal, which saw German MP’s question why the FIU failed to pass on numerous suspicious activity reports filed on Wirecard to the public prosecutor’s office.
It’s believed the current investigation is linked to a suspicious activity report issued by a bank in 2018, which raised concerns about a €1 Million transfer to Africa, with the bank suspecting these funds would be used in terrorist financing and drug trafficking.
A spokesperson from the public prosecutor’s office told reporters that the “FIU noted this report but didn’t pass it on to the German law enforcement agencies”.
Both the justice and finance ministries have stressed they are fully cooperating with the relevant authorities.
The country’s FIU was previously handled by the Federal Criminal Police Office (BKA) before being transferred to the German customs unit, a move which proved contentious at the time.
A source told Der Spiegel that since the transfer, the number of suspicious reports from the FIU had decreased to a “fraction”.
Finance spokeswoman for the opposition Greens, Lisa Paus said that the “integrity of the fight against money laundering in Germany has been called into question and with it an important part of the fight against organised crime and terrorism”.
In June, AML Intelligence reported that Bavarian Interior Minister Joachim Herrmann was to propose the dissolution of the country’s FIU.
Mr Herrmann reportedly put forward a request for the FIUs powers to be transferred back to the BKA, following its involvement in the now infamous Wirecard scandal.
The raids may prove embarrassing for Finance Minister Olaf Scholz, who is the frontrunner to succeed Angela Merkel as chancellor, in a few weeks time.
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