Author: Nicola Sharp 2 September 2020
Business crime specialists Rahman Ravelli assesses the scale of Germany’s problem.
Suspected cases of money laundering and financing of terrorism are at an all-time high in Germany.
The country’s anti-money laundering unit registered 114,914 suspected cases last year – an increase of almost 50% on the previous year. The vast majority of these cases were reported to the Financial Intelligence Unit (FIU) by banks and other financial institutions, with notaries and estate agents also regularly disclosing their suspicions. The cases were linked to a total of 355,000 suspicious transactions.
In its annual report a year ago, the FIU had registered only 77,000 cases of money laundering but had highlighted the "extreme vulnerability" of Germany’s real estate market to suspicious transactions.
Germany passed a range of anti-money measures in late 2019 to address the problem and ensure compliance with EU directives. Transparency International had urged Germany to introduce reforms after it was reported that approximately €30 billion in illicit funds were used in German real estate deals in 2017.
With the full impact of Brexit looming, there has been much talk of efforts to prise business away from the UK – and in particular, from the City - and move it to financial centres in other areas of Europe. But with any increase in business comes increased risk, especially if the market has not adapted to the surge in demand.
The figures reported by the FIU may be linked to a period of growth in Germany. The reporting of them can at least be seen as a recognition by that country of the need for more stringent anti-money laundering regulation. But coming mere weeks after reports highlighting money laundering concerns in the UK relating to Russian finance, the German regulators will need to quickly find answers to their problem.
This article originally featured on Mondaq, it can be read here.
Nicola is known for her fraud, civil recovery, arbitration and business crime expertise, her experience of leading the largest financial disputes and multinational investigations and her skills in devising preventative measures and conducting internal investigations for corporates.