Investigators searched Germany’s financial intelligence unit Tuesday over suspicions that staff failed to turn over intelligence linked to a money-laundering probe, in possible violation of criminal law.
The public prosecutor’s office in Osnabruck, in the northwestern state of Lower Saxony, orchestrated the raid of the FIU’s headquarters in Cologne, in nearby North Rhine-Westphalia, in a move that is already sparking controversy.
“We confirm that our main office has been searched today on the request of the Osnabruck prosecutor’s office,” an FIU spokesperson told ACAMS moneylaundering.com. “We are astonished by the police operation and the method, which is unprecedented, extraordinary.”
The spokesperson would not provide any further details about the ongoing investigation, but said that the agency was “fully cooperating” and committed to understanding what may have gone amiss.
The probe allegedly centers on claims that FIU employees failed to forward eight suspicious transaction reports to investigators over an 18-month period, Der Spiegel reported Tuesday, citing the search warrant underpinning the raid.
Three German lenders ostensibly filed the STRs from mid-2018 to the beginning of this year to flag a dozen accounts that criminals may have used to funnel €1.7 million in ill-gotten gains to accounts held at lenders across several countries in Africa.
As a result of the FIU’s purported failure to refer the filings, investigators were unable to stop the suspect funds from leaving the country, or launch a timely probe into the alleged wrongdoing, according to Der Spiegel.
The Osnabruck public prosecutor’s office, which did not respond to a request for comment by press time, began looking into the matter in February based on a report that local police filed after obtaining the intelligence by other means, the German-language news website said.
Failure to provide prosecutors with a suspicious transaction report linked to suspected money laundering or other crimes, negligently or otherwise, may constitute “obstruction” under section 258 of the German criminal code, Tobias Eggers, a partner with Park Wirtschatfsstrafrecht in Dortmund, told ACAMS moneylaundering.com.
Prosecutors’ carefully-crafted statement on the case leaves the door open to the possibility that the FIU may have simply made a mistake as a result of persistent understaffing or that staff may have engaged in an outright conspiracy, he said.
“This is quite a blow to the FIU,” Eggers said. “The Minister of Finance had a short while ago boasted that the FIU is working smoothly and they had staffed up immensely.”
The agency has faced a catalog of issues arising from staff shortages and deficient software since moving from the federal police unit to the Finance Ministry’s customs branch in June 2017, resulting in the accumulation of almost 30,000 unprocessed STRs by February 2018, according to reporting by Handelsblatt.
The FIU said it had cleared the STR backlog by July 2017, but official figures show the volume of unprocessed reports increased again to more than 46,000 by August of last year.
As of January, permanent staff still filled only 277 of 475 full-time positions at the agency, while around 160 customs officers from other departments filled in to keep the unit running, according to figures German officials provided lawmakers that month. Public broadcaster NDR reported in June that the head of the unit, Christof Schulte, is to leave his post after only two years.
Senior investigators from the state of Thuringia even labelled the FIU “a significant danger to domestic security” in a secret report to German lawmakers cited by Der Spiegel in March 2018.
Nevertheless, prosecutors may have overstepped the mark in ordering the raid, said Daniel Thelesklaf, who unexpectedly quit his job as the head of Switzerland’s financial intelligence unit last month amid a reported dispute with the country’s Interior Ministry.
STRs are not necessarily evidence of criminal conduct but only flag indicia of suspect behavior, Thelesklaf added, claiming that it was “ridiculous” to accuse the German agency of withholding intelligence since “the filtering role is the raison d’être for an FIU”.
“The FATF [Financial Action Task Force] standard says that the FIU must be independently deciding when and what intelligence to forward to the prosecutors,” Thelesklaf said.
The intergovernmental group is due to assess Germany’s anti-money laundering framework later this year, though the onsite evaluation could be delayed until next year due to the COVID-19 pandemic.
Contact Gabriel Vedrenne at email@example.com and Koos Couvée at firstname.lastname@example.org
|Topics :||Anti-money laundering , Counterterrorist Financing|
|Document Date:||July 14, 2020|