[NEWS] Germany is taking significant steps to combat money laundering by introducing the Federal Bureau of Financial Intelligence, as outlined in a draft of the planned legislation. This new body, expected to be established next year, will centralize the monitoring and analysis of money laundering and sanctions enforcement. With a target of 1,700 employees, it will have offices in Dresden and Cologne, as confirmed by a finance ministry spokesperson.
The move comes after Germany faced criticism from the global Financial Action Task Force (FATF) for not doing enough to address money laundering, despite being a major financial center. The FATF’s assessment highlighted various shortcomings, including a lack of control over individuals dealing with large sums of money, such as estate agents. In response, Finance Minister Christian Lindner pledged to centralize control, increase staff, and modernize the authorities’ technology.
The need for the Federal Authority for Fighting Financial Crime was underscored by the resignation of the FIU’s leader in December 2022. The government came under scrutiny when it was revealed that a significant backlog of suspicious activity reports from the FATF had not been processed, leading to concerns about delayed investigations and responses.
Currently, two separate bodies, the Central Office for Sanctions Enforcement and the Central Office for Financial Transaction Investigations, handle monitoring potential money laundering and imposing sanctions. The new legislation will allocate more than 700 million euros ($775.60 million) between 2024 and 2027 to implement the Federal Bureau of Financial Intelligence.
The proposed legislation will also introduce a new investigation procedure to trace the origin of funds used to acquire suspicious high-value assets. Furthermore, the bureau will offer training courses to develop specialised expertise in combating money laundering.
Germany’s move to centralise control and modernise the authorities’ technology through the Federal Authority for Fighting Financial Crime reflects a proactive approach to combatting financial crimes.
Beyond Germany, European banks have also faced scrutiny for AML failures, resulting in significant fines from regulatory authorities.
However, Germany’s initiative signals a commitment to rectify past issues and strengthen its financial crime prevention mechanisms, setting a positive example for the region.
