Financial Crime World

Germany Grapples with Rising Threat of Money Laundering, Terrorist Financing

Rising Cases of Potential Money Laundering and Terrorist Financing in Germany

The Financial Intelligence Unit (FIU) has reported a staggering 298,000 cases of potential money laundering and terrorist financing in Germany last year, a significant increase from the previous year. According to the FIU’s annual report, only a small fraction of these cases - just over one percent - are related to government security-related crime, including terrorism.

The Threat of Terrorism Remains High

Experts warn that the threat posed by terrorist organisations remains high, with extremist groups and individual perpetrators active in Germany. The German Federal Ministry of the Interior has identified the financing of terrorism as a top priority, citing concerns over the integrity of the country’s financial centre and the reputation of businesses operating there.

Vulnerabilities in the Fight Against Terrorist Financing

Non-profit organisations (NGOs) have also been identified as potential vulnerabilities in the fight against terrorist financing. Terrorist groups can use NGOs to raise funds, acquire resources, and even recruit members. For example, NGOs may be infiltrated by extremist individuals who divert funds to terrorist organisations or unwittingly provide support through relief projects.

Measures to Prevent Money Laundering and Terrorist Financing

To combat these threats, Germany has implemented a range of measures to prevent money laundering and terrorist financing. The German Anti-Money Laundering Act requires businesses to:

  • Conduct risk analyses
  • Establish effective processes
  • Report any suspected cases
  • Monitor transactions and business relationships for potential breaches of sanctions and embargoes

Expert Support for Businesses

KPMG’s Forensics division is offering its expertise to help businesses meet these obligations. The firm provides:

  • Risk assessments
  • Process establishment
  • Internal investigations
  • Forensic data analysis
  • Open source research to identify potential risks associated with NGOs and other business partners

Staying Vigilant in the Fight Against Money Laundering and Terrorist Financing

As Germany continues to grapple with the growing threat of money laundering and terrorist financing, it is essential for businesses to remain vigilant and take proactive steps to prevent these illicit activities.