(Bloomberg) — Germany still hasn’t done enough to prevent money laundering even after a raft of reforms in recent years, according to a global watchdog.
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With more than 300 authorities responsible for tackling money laundering, the country faces challenges in coordination and doesn’t deal adequately with the risk of large amounts of cash being smuggled across borders, the Financial Action Task Force said Thursday in a report published in Paris.
Germany has been attempting to beef up its financial crime controls, notably after the collapse of electronic payments company Wirecard AG in 2020 shook confidence in the country as a place to do business.
As Europe’s biggest economy, Germany is a target for money laundering and terrorist funds given its international connections and intensive use of cash, according to the FATF, which sets international standards and aims to foster legal and regulatory reform.
The FATF report summarizes efforts to address money laundering and terrorist financing in place in Germany during a visit by the watchdog in November.
Partly as a result of the consultations, the German finance ministry presented a plan this week that includes establishing a unified agency to tackle money laundering and coordinate implementation of sanctions.
‘Paradigm Shift’
“In Germany we focus a lot on the small fish, but the big fish swim away from us,” Finance Minister Christian Lindner told reporters Wednesday in Berlin, calling the creation of the agency “a paradigm shift.”
“We don’t want our country to be called a money-laundering paradise any longer,” Lindner said. “So what should apply is: Follow the money.”
Germany has made “significant improvements” over the last five years, according to the FATF. Areas that need more work include a sharper focus on hawala operators by financial regulator BaFin and more efficient reporting of suspicious transactions, especially outside the banking industry, the watchdog said.
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