“The United Nations, Interpol and Europol report on an increasing convergence between organized crime and terrorism”, it says in 2018 in the explanatory memorandum for the amendment of the EU money laundering directive, and further: “The prevention of the use of the financial system for the purpose of money laundering and Terrorist financing is an integral part of any strategy to address this threat. “
So the politicians in Europe know about the great dangers of money laundering for democracy and the rule of law. But what exactly do German parties want to do when they come to power in the Bundestag election in September? A brief overview: If you believe the FDP election program, then the money laundering problem is not worth mentioning. There is no match in the text, not even for the term “financial crime”. It looks just as empty in the AfD’s program.
The CDU / CSU calls for a “reversal of the burden of proof”. Alleged criminals should have to prove that they have earned their money legally, otherwise it will be confiscated. But how credible is this demand if there had been enough opportunity in the past 15 years to implement this measure, which has been in practice in Italy against the Mafia since the 1980s? The expertise on this has been around for a long time: as early as 1986, the Federal Criminal Police Office recommended turning the tables on the burden of proof accordingly. Nothing happened then or later.
In the future program, the SPD calls for more competencies for the financial supervisory authority Bafin, which played an inglorious role in the Wirecard scandal. At the same time, the Federal Finance Minister Olaf Scholz (SPD), who is responsible for Bafin and anti-money laundering, has refused to forbid the cash payment of real estate over the years, although experts have long warned against this gateway for money laundering (interview). Only Bündnis90 / Die Grünen and the Left Party are tackling the problem more seriously in their programs.
The ignorance of many German federal governments in the fight against illegal financial flows is now well documented. In 2020, the Federal Audit Office ruled in two reports that the fight against money laundering in this country did not meet the legal requirements. There was a lack of supervisory staff and the necessary access rights to police data. A few weeks ago, the European Court of Auditors hit the same line with its special report, which made it clear that the accurate risk analysis of 2018 was not really taken seriously across the EU: the European Court of Auditors attested too few staff in the supervisory authorities, sometimes garnished with political influence, language problems with the international exchange of information and insufficient implementation of legal requirements.
“Germany belongs on the black list of money laundering risk countries.”
The fight against money laundering is European law. The EU member states must implement the relevant directive into national law. In doing so, they have a margin of discretion, which has also been used abundantly. In the past 30 years, as long as the EU Anti-Money Laundering Directive has existed, the EU Commission has initiated around 100 infringement proceedings because the EU member states had not fully implemented the laws. In 2012, the federal government had to admit that it had not fully implemented the Money Laundering Directive since its introduction in 1991, i.e. for 21 years. In recent years, too, there have been repeated reprimands from Brussels in Berlin. The incumbent EU Commission is now proposing to set up a central EU supervisory authority for combating money laundering. In addition, the rules are to be cast in an EU regulation in future, which takes away the leeway for the member states in terms of implementation.
In a recent study, the anti-corruption organization Transparency Germany confirmed that Germany has a massive problem with money laundering. “Germany is on the black list of countries at risk of money laundering and is unlikely to pass the current FATF review,” said Christoph Trautvetter, author of the study and academic advisor for the Tax Justice Network.
The highest international anti-money laundering body, the Financial Action Task Force (FATF), is currently examining the efficiency of the responsible authorities in Germany. Experts expect a bad grade. As early as 2010, the control result was catastrophic. The inspectors will also deal with the Financial Intelligence Unit (FIU). Reports of suspected money laundering arrive there for examination. The authority has been part of Customs since 2017 and seems quite overwhelmed. The Osnabrück public prosecutor’s office has even initiated investigations against the FIU for obstruction of punishment in office.