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Germany is reportedly forming a new AML agency that aims to regulate sanction efforts and money laundering controls.
According to the report from FT, citing unnamed resources, the new organisation will be called Federal Authority for Fighting Financial Crime and will absorb the country’s existing AML authority, the FIU (Financial Intelligence Unit). The report adds that a new bill about the formation of the agency will be presented in the German Federal Parliament within months. An unnamed senior official stated, “The aim of the new agency … is to strategically realign the fight against money laundering in Germany.”
The formation of this new agency comes about seven months after an intergovernmental agency started limiting money laundering and terrorist financing. The FATF (Financial Action Task Force) issued a report stating that Germany needed to “do more” to prosecute such crimes.
In December 2022, the leader of FIU stepped down following the revelation of the government keeping a large backlog of suspicious activity reports from the FATF. The German media reported that the FIU had over 100,000 unprocessed reports of the previous two years or more. These media headlines conflicted with the FIU head’s earlier statement to parliament that there is no delay in processing the reports.
The formation of the new agency also comes about four years after the accounting scandal around the collapse of the payment firm Wirecard. In the case, Markus Braun, the former CEO of Wirecard, was formally charged by Munich Public Prosecutors with fraud, trust breach and accounting manipulation in March 2022, following a criminal investigation into a German payments firm. Braun was accused of signing off on financial statements he was aware were incorrect from 2015 to 2018.
Beyond Germany, a series of fines has recently shed light on AML failures within European banks. These include Gatehouse Bank, which was fined with $1.83 million penalty by the UK’s FCA (Financial Conduct Authority), Santander Bank being hit with a charge of $131 million by FCA, and the Crédit Agricole with a $1.59 million fine from France’s ACPR (French Prudential Supervision and Resolution Authority).