TI: NGOS V IFFs – CIFAR. germany. sa.

Germany ranks poorly on the Financial Secrecy Index at 14^th most secret, out of 133 countries ranked.

illicit assets laundered in Germany are approximately €100 billion per year, based on an extrapolation of suspicious transactions under the anti-money laundering legislation [corruption + tax evasion]

GERMANY

C I FA R. E U 
i n fo @ c i fa r . e u

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THIS STUDY IDENTIFIES 16 CASES WITH POTENTIALLY ILLICIT ASSETS IN GERMANY
THAT ARE LARGELY UNRESOLVED TO DATE, AND ARGUES THAT THIS IS MOST
LIKELY JUST THE TIP OF THE ICEBERG
Despite many years of commitments to increase
efforts, the results of international AR
are dismally low compared to the assets hidden

While estimates put the global total of anonymous
and potentially illicit wealth at around 10% of total
global wealth ($7 trillion to $32 trillion), only
$2.6 billion in illicitly acquired wealth was frozen
and $423 million returned by OECD countries
every 6 years.

Germany receives less than 100 MLA requests from
developing countries per year and very few of them
are related to asset tracing and asset recovery

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Sanctions have received increased attention as
a tool to quickly freeze assets

In Germany, bank accounts with
assets totaling 865 million remained frozen at
the end of 2018, from Libya : Gaddafi case:

the success of EU misappropriation
sanctions is small in Germany. The European
Commission rejected a fOIR to obtain comparable data for the EU...why?:

< > cocoo:  becos statistics/data [on the success of eu/sns misappropriation sanctions], 
could be used as evidence for cso claims v eu/sns, on the ground of failing their duty to contribute
to successful ar, by failing to provide technical assistance in developing countries, and
failing to support and advocate for increased recovery efforts at home

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germans have a wealth of data on illicit assets …..but in germany, there are no official statistics on mla requests, and information on individual requests is confidential. However, estimates show that Germany receives slightly more than 10,000 requests per year for MLA on criminal matters, mostly originating from the EU, the US and Switzerland

between 1970 and 2015, the 30 African countries in their dataset had lost $1.4 trillion due to capital flight, vastly exceeding the debt stock of around $500 billion

for every $1 in official development assistance that goes into developing countries, $10 is lost via illicit outflows.

every year between $20-40 billion are stolen by public officials from developing and transition jurisdictions..the actual amount of assets recovered and returned is dismally low.

The majority of asset freezes were executed by Switzerland (32,5%) and, while a total of 10 countries were pursuing asset recovery cases, only the US, Switzerland, the UK and Australia actually returned assets, with the majority of returned assets coming from the US (42,4%).

 the global total of unrecorded wealth parked offshore is around 10% of global wealth, or $21 trillion to $32 trillion, with roughly one third originating in developing countries.

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2 complementary ways to restitution:

• sanctions: are initiated independent of the source country 
• asset freezes: require a criminal case for confiscation and return
• Sanctions that include asset freezes:  can be imposed by the UN, the EU or unilaterally by Germany. Asset freezing obligations generally concern bank accounts controlled by the designated individuals or entities, companies and their subsidiaries as well as real estate and other high-value goods they own

however, there are two major limitations: 

1- frozen assets continue to legally belong to the designated individual or entity until proven otherwise, and a criminal case is usually necessary to return assets to the source country or the victims

2- sanctions-related asset freezes might fall short of identifying all assets, including bank accounts with hidden beneficial owners, company ownership and real estate

 Unlike open-ended UN sanctions, EU sanctions are only for 12 months, after which they are subject to an annual review

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Recent cases of asset recovery involving Germany have included:¹⁰

• de Achaval and Macri / Argentina
• Hosni Mubarak / Egypt
• Bacharuddin Jusuf Habibie / Indonesia
• Rackat Alijev / Nursultan Nasarbajew / Kazakhstan
• Muammar al Gaddafi / Libya
• 1MDB / Malaysia
• Abacha / Nigeria
• Russian Laundromat / Russia
• Ben Ali / Tunisia

in Germany, there are no official statistics on mla requests, and information on individual requests is confidential.  Germany receives less than 100 mla requests from developing countries per year and very few of them are related to asset tracing and asset recovery.

Germany has implemented the EU’s 5^th Money Laundering Directive, so had to make its BOR public in 2020 and “has become one of the first countries worldwide to oblige foreign real estate buyers to register in the local bor.

but in germany, BOR is not mandatory, has poor integration with the company register, charges for access, and information is not provided instantaneously nor in machine-readable or machine-searchable form, as well as a high threshold for inclusion in the bor, at 25%.

german law allows asset confiscation without a completed criminal case and with a lower burden of proof for cases of organized crime and terrorism.

Germany has been a member of the Financial Action Task Force since 1990¹⁶ and is an observer to the Eurasian Group (EAG), Asia/Pacific Group on Money Laundering (APG) and the Financial Action Task Force of Latin America (GAFILAT). The next mutual evaluation of Germany is due in 2021-2022.¹⁷ It is a member of the Camden Asset Recovery Inter-Agency Network¹⁸ and has participated in several international forums.