For years, experts have pointed to gaps in the global fight against money laundering. Cross-border research by countless media now paints a bleak picture. Deutsche Bank is also under attack.
According to research by an international network of journalists, there are still significant shortages in the fight against international money laundering. Accordingly, information released Sunday evening following a data breach by the U.S. Treasury Department shows that banks around the world have been dealing with high-risk customers for years and, despite strict regulations, have accepted suspected criminals as customers, making billions of money transfers have done. According to the information, they reported these processes at times only very hesitantly and at other times with years of delay.
This is the result of a joint research of several media partners published under the name “FinCEN-Files”. The American online medium Buzzfeed News shared the documents with the journalist network ICIJ (International Consortium of Investigative Journalists) and made research possible in 110 media from 88 countries. According to the information, 110 media outlets from 88 countries took part in the investigation, including NDR, WDR, “Süddeutsche Zeitung” and Buzzfeed News in Germany. According to the concerned media, the “FinCEN files” contain more than 2,100 reports of suspicious transactions from the years 2000 to 2017. The total number of transactions is approximately two trillion dollars (currently 1.69 trillion euros).
Organized crime infiltrates the economy
The tax justice network, which has been pointing out abuses in the fight against international money laundering for years, was not surprised by the shortages. However, the data breach provides “a shocking insight into the central role of the US financial system as the engine room for global money laundering,” said Markus Meinzer of the German news agency network. The US took the inglorious second place on the “shadow financial index” after the Cayman Islands. “To improve, the US should finally switch to exchanging tax data with the rest of the world. Europe and Germany must insist on this.”
But there are still many problems in Germany. “After the Cum-Ex and Wirecard scandals, it must have become clear to everyone: the German financial regulator Bafin fails too often and must be fundamentally rethought and rebuilt,” demanded Meinzer. “When organized crime infiltrates the economy and kleptocrats plunder their states with the help of Western banks, freedom and democracy are threatened everywhere.” The rule of law must finally become serious and punish money laundering seriously.
Deutsche Bank is apparently also mentioned in the data breach
According to the research network, the data breach is also about cases at Deutsche Bank. When asked on Sunday, Germany’s largest financial institution said the ICIJ had reported on a number of historical topics. As far as Deutsche Bank is concerned, these are known to the regulators. The subjects have been researched and agreements have been made with the government. “We have taken action where necessary and appropriate. The bank has invested heavily in improving controls and we are focusing strongly on meeting our responsibilities and obligations,” said a spokesman in Frankfurt / Main.
According to the spokesman, the world’s leading financial institutions, including Deutsche Bank, have “invested billions of dollars” to support law enforcement authorities more effectively: “This of course leads to a greater number of findings.”
More and more suspicious cases in Germany
In Germany, the Financial Intelligence Unit (FIU) at customs is the focal point in the fight against money laundering and terrorist financing. According to the information, the FIU receives “suspicious transaction reports” if there are indications that assets may be of illegal origin or are related to terrorist financing. For example, banks reported questionable cash deposits. There are also reports of financial institutions involving very large volume transactions, some of which have extensive international offices – often related to the real estate sector. In addition, suspicious activity reports are increasingly coming from the so-called non-financial sector – for example from notaries who have to settle real estate purchases in cash or from jewelers whose customers want to buy very high-quality jewelery in cash.
According to the FIU, significantly more suspicious cases were reported last year. According to her information, there were 114,914 reports in 2019. That is almost 49 percent more than a year earlier. Since 2009, the “number of reports” has increased almost tenfold. As before, about 98 percent of all reports came from the financial sector, of which over 35,000 more reports of suspicious transactions than in 2018.
Germany is currently playing a key role in the international fight against money laundering and terrorist financing. In July, Germany took over the chairmanship of the Financial Action Task Force (FATF) for two years through the Ministry of Finance – an institution that brings together the governments of 37 countries, the EU Commission and the Gulf Cooperation Council.