Financial Crime World

Title: Germany’s Battle Against Money Laundering and Terrorist Financing: Progress and Challenges

Germany’s Role in Europe’s Anti-Money Laundering and Countering Terrorist Financing (AML/CFT) Efforts

Berlin, 25 August 2022 – In the last five years, Germany has made significant strides in strengthening its financial regulatory framework to prevent money laundering and terrorist financing. As the fourth-largest economy globally and the largest in the European Union (EU), Germany’s market position and extensive international connections necessitate continuous improvement to mitigate substantial risks.

Challenges in Domestic Coordination and Inter-Agency Partnerships

  • Collaboration with international partners to address risks
  • Enhancing communication and consistency in cross-jurisdictional investigations among 16 states (Länder)
  • Strengthening partnerships among various supervisory and law enforcement bodies:
    • Financial Intelligence Unit (FIU)
    • Federal Financial Supervisory Authority (BaFin)
    • Public Prosecutor

Asset Recovery and Organized Crime

  • Impact of non-conviction based asset confiscation laws
  • Dismantling criminal networks by denying them illicit financial gains

Transition to an Administrative Financial Intelligence Unit (FIU) Model

  • Improvements in financial intelligence collection and use
  • Challenges and operational prioritization in implementing reforms
  • Efficient intelligence dissemination and use key to tackling money laundering and terrorism financing cases

Tackling Terrorist Financing

  • Successful investigations, prosecutions, and disruptions
  • Proactive implementation of targeted financial sanctions as a preventive measure
    • Reducing terrorist assets and operational capabilities

Regulatory Landscape and Resource Allocation

  • Robust and comprehensive framework for financial and non-financial sectors’ AML/CFT compliance
  • Allocating resources to support over 300 supervisors
  • Adequate resourcing for the Transparency Register during transition to a full register in 2022

Emerging Risks and Transparency Cooperation

  • Mitigating risks related to high cash usage
  • Targeted efforts to address informal Money Value Transfer Systems (MVTS) services
  • Strengthening financial system with transparency and cooperation initiatives