ALARM IN GERMANY AT TERRORISM FUNDING
▶ Anti-money laundering unit’s failures said to be endangering lives
Germany’s anti-money laundering unit has been accused of serial failure to safeguard against suspect transactions, including missed alerts and long delays in triggering police inquiries into money transfers thought to be linked to terrorist activities.
The Financial Intelligence Unit was described as endangering German lives due to its vast backlog of reports that sometimes took as long as six months to be shared. Whistle-blowers included Sebastian Fiedler, a senior German detective, who described it as the “biggest security disaster in postwar history”.
The unit was established in 2016 to identify and forward suspicions of money laundering associated with terrorists or criminals to security services.
Its 165 full-time workers reportedly have a backlog of 20,000 reports to review and more than 70,000 new ones are expected this year.
“It must be ensured, within a few working days, that a criminal investigation agency can make a decision on whether a transaction can be carried out or whether the funds are to be confiscated,” Mr Fiedler told German broadcaster Bayerischer Rundfunk. “If information about it reaches a public prosecutor’s office weeks later, then the funds are gone.”
A senior prosecutor in North Rhine-Westphalia said: “I wouldn’t want to be in [FIU’s] shoes if there is an attack and it turns out there was an explicit tip in their files.”
Among suspect transactions laid out in a secret report to the German parliamentary finance committee, seen by business newspaper Handelsblatt, was information on a payment of €18,000 (Dh76,609) into a bank in January this year and not forwarded to police for investigation until two months later.
The Islamic KT Bank in Frankfurt is a subsidiary of the Kuveyt-Turk Participation Bank in Turkey, which is itself owned by the Kuwaiti Finance House (KFH). Both have been accused of being used to funnel money to ISIS, Al Qaeda and Hamas.
US officials have alleged KFH had been used by Qatar and Kuwait-based extremists to help fund the former Al Qaeda Syrian offshoot, Al Nusra Front.
In August 2015, the US Treasury said Saad bin Saad Al Kabi and Abd Al Latif Al Kawari funded extremists with funds transferred to KFH from Qatari bank accounts. David Cohen, the former undersecretary for terrorism and financial intelligence, raised the alarm in 2016 over the activities of terrorist financier Hajjaj Al Ajmi, who was using KFH and Kuveyt-Turk to help fund Al Nusra with the help of his social media pages.
In 2014, the US Treasury designated Al Ajmi as a supporter of terrorism with two other Kuwait-based supporters of Al Nusra and ISIS. It was part of a long pattern of similar behaviour and the US Congress record shows the former US national counterterrorism co-ordinator at the National Security Council, Richard Clarke, told Congress of evidence against the group as far back as 2003.
“Kuwait Finance House is reported to be the financial arm of the Muslim Brotherhood in Kuwait,” he told a House of Representatives committee.
The destination of the €18,000 remains unknown because it was sent to financial institutions in the Netherlands before the German police started inquiries in March. While small, a senior public prosecutor said not much was needed to carry out deadly attacks.
“The smallest sums can produce the biggest dangers,” said Andreas Stueve, who focuses on money laundering from the city of Dusseldorf.
Mr Fiedler, the senior detective, estimated about €100 billion
One suspect transaction involved €18,000 paid into a bank accused of being used to funnel money to ISIS, Al Qaeda and Hamas
is laundered through Germany every year. Questions of the FIU’s competency are likely to hit the government hard.
When it became operational just over a year ago, then-finance minister Wolfgang Schauble said the FIU was the linchpin of German efforts against money laundering and the financing of terrorism. However, some detectives were upset over the decision to move money laundering units from the authority of the police to customs.
None of the employees at the FIU’s predecessor were transferred and only two of the new staff had law enforcement backgrounds, Handelsblatt reported.
The FIU has sought to largely deflect the attention, blaming staff shortages and ICT problems – although a spokesman said there were a few teething problems. The FIU’s staff will treble from 165 to 475 by 2019 and a new head, lawyer Christof Schulte, who worked for the customs authority and finance ministry, took charge on August 1.
The FIU is also being given more powers, meaning it can obtain data it needs from law enforcement, financial and administrative authorities.
It will also have the right to immediately stop all suspicious transactions.