Money Laundering Scandals in Germany: Transparency International’s Open Letter to FATF

May 1, 2021

Transparency International Deutschland e.V., the German chapter of the international anti-corruption organization Transparency International, issued an open letter to Mrs. Shana Krishnan, the Head of the FATF (Financial Action Task Force), expressing concerns about Germany’s ineffective mechanisms to combat complex money laundering schemes.

Challenges and Progress

In the letter, Transparency International Germany acknowledges the challenges of understanding money laundering risks in the country and the recent progress made by the German authorities in enacting necessary legislation. However, they argue that Germany still fails to effectively curb the flow of dirty money, citing instances such as the Wirecard and Deutsche Bank money laundering scandals.

Key Concerns

Transparency International Deutschland outlines several key issues in their letter:

1. Insufficient Understanding of Money Laundering Risks

   • The German National Risk Analysis (NRA) lacks a substantial evidence base and proper analysis on the extent and sources of money laundering in the country.
   • Significant targets include the real estate sector and cash-intensive businesses, but other issues like bearer shares and treuhand relationships are largely unexplored.

2. Lack of Access to Beneficial Ownership Information

   • Germany introduced a beneficial ownership register in 2017 but poor data quality and limited enforcement have kept it largely ineffective.
   • Transparency International Deutschland stresses the need for better access to the register, machine-readable data, and mandatory registration for all entities.

3. Inadequate Investigation and Prosecution of Complex Money Laundering Cases

   • While asset freezes and confiscations have occurred, successful prosecutions have been rare.
   • More resources and a central database for suspicious transaction reports are required to tackle intricate money laundering schemes.

4. Limited Cooperation with Neighboring Countries and Lack of Cross-Border Investigative Capacity

   • Transparency International Deutschland emphasizes the importance of strengthening international cooperation to better combat money laundering.
   • This includes improving legal frameworks and information sharing capabilities between countries.

The organization concludes by committing to collaborate with FATF and work towards necessary improvements in Germany’s anti-money laundering efforts. For more information about Transparency International Deutschland and their work, please visit www.transparency.de.