Germany is considered a paradise for money laundering, and financial supervision is a toothless tiger. That should change, promises the new president of the authority. In a specific case, the Bafin takes action.
The financial supervisory authority Bafin is watching the Russian VTB Bank more closely in its business in Germany to avoid money laundering. “On October 1, 2021, Bafin ordered VTB Bank (Europe) SE to implement appropriate internal security measures to prevent money laundering and terrorist financing,” announced the Federal Financial Supervisory Authority (Bafin) on Friday.
To monitor the measures, the Bafin “appointed a special representative at the institute with immediate effect”. According to reports, the background to the advance is not current facts.
VTB Bank (Europe) SE is based in Frankfurt / Main and belongs to the second largest Russian banking group. This is majority owned by the Russian state and is one of the 100 largest banks in the world in terms of capital. In the German market, the institute focused on business customers for a long time, and since 2011 it has also been offering financial products to private investors via the online bank VTB Direktbank.
In May of this year, the Bafin had installed a special watchdog at the smartphone bank N26, who is supposed to keep an eye on the institute in matters of combating money laundering. For the first time, the financial supervisory authority at Deutsche Bank used this means in September 2018. In April 2021, the Bafin supplemented the mandate of its special representative at Deutsche Bank and urged Germany’s largest financial institution to make more efforts in the fight against money laundering.
Every year, huge sums of money are channeled into the normal economic cycle from dark channels such as drug deals, arms trafficking or forced prostitution. The fight against money laundering is at the top of the list of priorities for Bafin in the next few years, said Bafin President Mark Branson, who has been in office since August, in the Handelsblatt (Friday): “We will significantly increase the number of employees in this area. In recent years, the Bafin, like many other authorities in Europe, was somewhat underinvested in this area. Particularly in the case of banks with increased money laundering risks, we will pay more attention to the fact that their control systems are properly calibrated in order to detect and prevent illegal transactions. “
He has the impression that the topic of money laundering prevention has been underestimated in many European countries, said Branson. Born in Britain, who previously headed the Swiss financial supervisory authority Finma, announced overall tougher action against financial companies: “Bafin must have the courage to make unpleasant decisions, even if we do not have perfect information and if this involves certain risks.” Not deciding and waiting is often riskier for customers and the stability of the financial system.
“My message is clear: we need the willingness to test limits,” emphasized Branson. “If there is a grievance, we have to do something, even if this issue is not clearly regulated in the law.”
After taking office, Branson announced that he would push ahead with the modernization of the Bafin. The German financial supervisory authority based in Bonn and Frankfurt was heavily criticized in the course of the Wirecard scandal. Neither the Bafin nor the EY auditors had noticed the billions in fraud allegedly running for years by the now insolvent payment service provider. The then Bafin President Felix Hufeld and the Vice President of the authority, Elisabeth Roegele, had to vacate their posts as a result.
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
