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Financing crime

September 2, 2010

German police and financial authorities have warned of an increase in money laundering. The numbers have more than tripled in recent years and the methods are becoming ever more sophisticated.

Euro bills on a washing line
Private accounts are used to channel money abroadImage: dpa - Bildfunk

Authorities in Germany have warned of a steady increase in money laundering. Recorded cases went up by 23 percent in 2009 with a total number of 9,046, according to figures presented by the financial market watchdog BaFin and the BKA federal police agency on Wednesday. The number of cases has tripled since 1995.

Jochen Sanio
BaFin's Jochen Sanio says fines imposed in Germany are 'a joke'Image: AP

BKA head Joerg Ziercke said one of the main reasons for the increase was the rising number of financial intermediaries who offer their private bank accounts for money laundering. For an often small fee, individuals agree to send money abroad or to other financial intermediaries who then channel the money to foreign accounts.

Fake Internet purchases

"These people are being approached through the Internet," Ziercke said at a press conference on Wednesday. "They are asked to offer their accounts for transferring money for products allegedly bought on the Internet."

"The products are then not being delivered, and the owner of the account gets a commission. That way the money that's been transferred is channelled … into accounts outside of Europe."

In almost one-third of investigations into organized crime, there are cases of money laundering, Ziercke said. Nearly 100 of the cases recorded in 2009 were linked to suspected financing of terrorism.

Money suitcase
'Clean' money can be a source for financing terrorismImage: BilderBox

More international cooperation needed

The BKA said better international cooperation could help quell the problem.

Within Germany it's the job of financial market watchdog BaFin to be on the lookout for illegal transactions or money transfers that reek of money laundering. Increased international cooperation aside, BaFin also called for tougher fines and sentences.

"Compared to the authorities in the US or in London, it's almost a joke when you look at the fines that we can impose here in Germany," BaFin head Jochen Sanio said.

Fines in Germany are limited to a maximum of 100,000 euros ($128,000), while abroad, Sanio said, authorities can easily charge millions if they uncover a significant case.

Author: Andreas Illmer (AFP/AP/dpa)
Editor: Nancy Isenson

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