German finance and justice ministries raided in FIU investigation

The investigation was launched following complaints that the FIU failed to act on millions of euros in suspicious transactions between 2018 and 2020.

German prosecutors have would have raided the ministries of finance and justice and seized a cache of documents as part of an investigation into a possible obstruction of justice by the country’s FIU (Financial Intelligence Unit).

The FIU is an agency of the Ministry of Finance, currently headed by Vice-Chancellor Olaf Scholz, who is seeking to become German Chancellor in the national elections on September 26.

A spokesperson for prosecutors said he opened the investigation after receiving complaints that the FIU failed to act on millions of euros in suspicious transactions, including to Africa, between 2018 and 2020.

The investigation was started by an unidentified bank report to the FIU in June 2018 listing more than one million euros ($ 1.2 million) in payments that the bank said could be linked to the drug and arms trade and terrorist financing.

The FIU would have “Took note” of the report but did not send it to the police.

The ministries of finance and justice were questioned to see if the FIU had been ordered to ignore suspicious cash flows.

“An assessment of documents obtained in previous searches of the FIU revealed that there was extensive communication between the FIU and the ministries currently being searched,” prosecutors said.

The investigation is also investigating why reports of suspicious activity have dropped significantly since the FIU took control of money laundering in 2017.

The FIU – as well as the BaFin, which also depends on Scholz – have come under scrutiny for failing to detect the problems of the payment company Wirecard, which collapsed last year in the biggest corporate fraud in Germany.

Scholz is said to have said he brought the CRF staff to nearly 500 from 165 and invested heavily to better equip them. He expressed frustration with the searches, saying prosecutors with questions “could have put them in writing.”

The investigation also comes as Germany’s anti-money laundering efforts are under scrutiny by the FATF (Financial Action Task Force).

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