A global watchdog claims that despite a flurry of measures in recent years, Germany hasn’t done enough to combat money laundering.
The Financial Action Task Force said in a report released in Paris on Thursday that the nation confronts coordination issues and doesn’t sufficiently address the possibility of significant sums of cash being trafficked across borders despite having more than 300 authorities tasked with combating money laundering.
Germany has been making efforts to strengthen its financial crime regulations, particularly after the failure of the electronic payments company Wirecard AG in 2020 caused investors to lose faith in the nation as a favorable location for business.
According to the FATF, which establishes worldwide standards and seeks to promote legal and regulatory reform, given its links internationally and frequent usage of cash, Germany, the largest economy in Europe, is a target for money laundering and terrorist funding.
The FATF reports detailed measures taken in Germany to combat money laundering and terrorism financing during the organization’s visit in November.
The German finance ministry proposed a plan this week that involves creating a centralized agency to combat money laundering and coordinate the enforcement of sanctions, in part as a result of the discussions.
Paradigm Shift
The foundation of the agency, according to German Finance Minister Christian Lindner, is “a paradigm shift,” adding that “in Germany, we focus a lot on the small fish, but the large fish swim away from us.”
Lindner stated, “We don’t want our nation to be known as a haven for money laundering any longer. So following the money, is what should have been done.
According to the FATF, Germany has improved “significantly” during the past five years. BaFin, the financial regulator, needs to focus more intently on hawala operators, and suspicious transactions need to be reported more effectively overall, the watchdog stated.
