Financial Intelligence Unit (FIU) GERMANY ANNUAL REPORT 2010 FIU GERMANY

ANNUAL REPORT 2010 Financial Intelligence Unit (FIU) GERMANY ANNUAL REPORT 2010 FIU GERMANY

Imprint Editor: BUNDESKRIMINALAMT Zentralstelle für Verdachtsanzeigen FIU Germany 65173 Wiesbaden Contents

1 Foreword –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 7

2 Reporting behaviour: Facts and Figures –––––––––––––––––––––––––––––––––––––––––––––––––––– 8 2.1 Nationwide case statistics for 2010 –––––––––––––––––––––––––––––––––––––––––––––––––––––– 8 2.1.1 Suspicious transaction reports (STRs) filed pursuant to the Money Laundering Act (MLA) –––––––––––––––– 8 2.1.2 Possible causes for the increase in the number of suspicious transaction reports –––––––––––––––––––––– 11 2.1.3 Reports filed by the tax authorities pursuant to Section 31 b of the Fiscal Code–––––––––––––––––––––––– 12 2.1.4 Reports pursuant to Section 14 (2) of the Money Laundering Act –––––––––––––––––––––––––––––––––– 12 2.1.5 Reports filed pursuant to the Iran Embargo Regulation–––––––––––––––––––––––––––––––––––––––––– 12 2.1.6 Number and nationality of individuals reported –––––––––––––––––––––––––––––––––––––––––––––– 13 2.1.7 Corporate headquarters –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 14 2.1.8 Grounds for suspicion–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 14 2.2 Results of processing –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 17 2.2.1 Status of report processing at the close of the reporting year –––––––––––––––––––––––––––––––––––– 17 2.2.2 Connections to types of crime in cases transferred to other specialised investigation agencies –––––––––––– 18 2.3 Summary of report volume –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 19

3 Follow-up responses by public prosecutors’ offices pursuant to Section 11 (8) of the Money Laundering Act –– 19 3.1 Statistical analysis –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 20 3.2 Analysis of content–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 20 3.2.1 Judgements, penalty orders, bills of indictment –––––––––––––––––––––––––––––––––––––––––––––– 20 3.2.2 Dismissal orders –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 21 3.3 Conclusion–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 21

ANNUAL REPORT 2010 FIU GERMANY Contents

4 Monitoring of suspicious transaction reports –––––––––––––––––––––––––––––––––––––––––––––––– 22 4.1 Case analysis–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 22 4.2 Monitoring of trends –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 23 4.2.1 Financial agents–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 23 4.2.2 Electronic payment systems –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 25 4.2.3 500 Euro notes –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 25

4.2.4 CO2 emission allowance trading –––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 26 4.3 Results of targeted operational analysis –––––––––––––––––––––––––––––––––––––––––––––––––––– 26 4.4 Typologies –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 27 4.4.1 Precious metals –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 27 4.4.2 Financial agents–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 27

5 National cooperation –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 27 5.1 Public relations work –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 27 5.1.1 Generally accessible information–––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 27 5.1.2 Addressee-specific public relations work–––––––––––––––––––––––––––––––––––––––––––––––––––– 28 5.1.3 Presentations / training measures –––––––––––––––––––––––––––––––––––––––––––––––––––––––– 29 5.2 The Working Party of Banks and Chambers –––––––––––––––––––––––––––––––––––––––––––––––––– 29 5.3 Case collection –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 30

6 International Cooperation –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 31 6.1 Exchange of information with other FIUs –––––––––––––––––––––––––––––––––––––––––––––––––––– 31 6.2 International events /contacts –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 33 6.3 Investigative successes –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 33

7 Financing of terrorism –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 34 7.1 Suspicious transaction reports filed pursuant to the MLA for suspected financing of terrorism –––––––––––– 34 7.2 FIU correspondence –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 36 7.3 Conclusion–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 36 7.4 Measures against the Islamic Republic of Iran according to Council Regulation (EU) no. 961/2010–––––––––– 37

8 Final conclusions and outlook –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 38

9 Appendices –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 40 Graphs

Graph 1: Number of suspicious transaction reports filed pursuant to the MLA –––––––––––––––––––––––––––––– 8 Graph 2: Suspicious transaction reports filed pursuant to Section 11 of the MLA without the financial agents phenomenon –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 11 Graph 3: Reports relating to money laundering pursuant to Section 31 b of the Fiscal Code –––––––––––––––––––– 12 Graph 4: Results of processing by the money laundering clearing offices of the state criminal police offices –––––––– 17 Graph 5: Connections to types of crime identified by clearing offices in cases transferred to other investigative agencies 18 Graph 6: Monitoring of suspicious transaction reports – Noteworthy cases –––––––––––––––––––––––––––––––– 22 Graph 7: Number of suspicious action reports involving financial agents –––––––––––––––––––––––––––––––––– 23 Graph 8: Number of suspicious transaction reports involving financial agents compared against the total number of reports filed–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 24 Graph 9: Development of the case numbers of the FIU information exchange –––––––––––––––––––––––––––––– 31 Graph 10: Distribution of STRs filed for suspected terrorist financing –––––––––––––––––––––––––––––––––––– 35

Tables

Table 1: Reports filed pursuant to the Money Laundering Act by reporting party –––––––––––––––––––––––––––– 10 Table 2: Nationalities of the reported persons –––––––––––––––––––––––––––––––––––––––––––––––––––––– 13 Table 3: Headquarters of the companies reported –––––––––––––––––––––––––––––––––––––––––––––––––– 14 Table 4: Grounds for suspicion indicated by the parties required to report –––––––––––––––––––––––––––––––– 15 Table 5: Number of follow-up responses in relation to the number of suspicious transaction reports –––––––––––––– 20 Table 6: Judgements, penalty orders and indictments forwarded –––––––––––––––––––––––––––––––––––––––– 20 Table 7: Predicate offences mentioned in the judgements, penalty orders and bills of indictment –––––––––––––––– 21 Table 8: Requests for information addressed to the FIU Germany (Top 20) –––––––––––––––––––––––––––––––– 32 Table 9: Suspicious transaction reports filed for suspected involvement in the financing of terrorism–––––––––––––– 34

ANNUAL REPORT 2010 FIU GERMANY

Page 1 Foreword As far as the strategic analysis of the suspicious transaction 7 reports is concerned, noteworthy phenomena have again Upon publication of the FATF evaluation report of Germany been intensively observed and analysed as focal monitoring on 19.02.2010, the FIU – as well as various other agencies points, in addition to statistical evaluations. Feedback about and institutions in Germany – has very speedily begun to the information obtained was provided to the reporting par- implement the potential for optimisation shown therein. ties of the German Money Laundering Act in various ways in One indication of first results of the joints efforts, from the the framework of the German FIU’s public relations work. point of view of the FIU, is a further increase in the number In some investigative complexes with pilot character, the of suspicious transaction reports filed pursuant to the FIU made significant progress in 2010 which results in suc- Money Laundering Act (MLA). Along with the regularly high cesses in the fight against international money laundering quality of the reports, this shows the willingness of those and constitutes important experience for conducting major obligated to report to make their contribution to an efficient investigations in the future. suppression of money laundering and the financing of ter- The FIU Germany hopes that the Annual Report 2010 will be rorism. interesting reading for you and expresses its thanks to all The FIU Germany has further intensified its operational acti- cooperation partners for the good cooperation. vities both with respect to case-specific as well as cross- case analyses and, thus, has been able to even better support the German federal states which have original jurisdiction for the handling of suspicious transaction Dr Michael DEWALD reports. Head of FIU Germany

ANNUAL REPORT 2010 FIU GERMANY Page 8 2 Reporting behaviour: Facts and Figures observed for both the 2009 and the 2010 reporting years. This upward trend not only continued in the 2010 calendar The following information is based on the data contained in year, but even became more pronounced. In the past year, the FIU database. Merely graph 4 (“Results of processing by the FIU Germany received 11,042 suspicious transaction the clearing offices of the state criminal police offices”) and reports (STRs) pursuant to Section 11 of the Money graph 5 (“Connections to types of crime identified by the Laundering Act (MLA). Compared to the 9,046 STRs from clearing offices in cases forwarded to other investigative 2009, this constitutes an increase of 1,996 STRs or approx. agencies”) refer to data held by the competent state crimi- 22%.1 nal police offices. The 11,042 suspicious transaction reports filed pursuant to the Money Laundering Act constitute an absolute peak since the entering into force of this Act. 2.1 Nationwide case statistics for 2010 The following graph shows the development of the suspicious transaction reports filed pursuant to the MLA (without 2.1.1 Suspicious transaction reports (STRs) filed follow-up reports) from 2002 to 2010: pursuant to the Money Laundering Act (MLA)

After a temporary decline in 2007 and 2008, a significant increase in the suspicious transaction reports has been

Graph 1: Number of suspicious transaction reports filed pursuant to the MLA

12,000 11,042 10,051 10,000 9,080 9,046 8,261 8,241 8,062 8,000 7,349 6,602 6,000

4,000

2,000

0 2002 2003 2004 2005 2006 2007 2008 2009 2010

1 At this point, consideration is merely given to the suspicious transaction reports filed pursuant to Section 11 of the MLA. For the purpose of comparison with the previous years and in view of their content and structure, the reports filed pursuant to Section 14 (2) of the MLA are subject to a separate analysis (see 2.1.4). Page In addition, in the 2010 calendar year, a total of 670 follow- groups in terms of numbers (e.g. persons trading in goods, 9 up reports to “initial reports” were dealt with by the FIU. lawyers or brokers), continue to be clearly under-represen- This means that the total number of reports handled by the ted in the filing of reports. FIU amounts to 11,712. As already mentioned in the Annual Report 2009, the num- As in the previous years, the vast majority of the suspicious ber of suspicious transaction reports filed by “persons tra- transaction reports was filed by the credit institutions in ding in goods” is at a very low level – compared to the total 2010 as well. After a strong rise in the number of reports number of persons belonging to this category. In the total filed by this sector had already been established from 2008 year 2009, merely 12 STRs were received from this sector. (86% of all STRs) to 2009 (90% of all STRs), this number 33 reports are recorded for the year 2010. This means that went up even futher in 2010. Of the 11,042 STRs filed in there is a slight trend upwards for this sector. All in all, 2010, 92% were filed by credit institutions. The other however, the number of STRs received from this group of reporting parties, some of whom are made up of very strong persons is still at a very low absolute level.

ANNUAL REPORT 2010 FIU GERMANY Page 10 The following Table 1 shows the distribution of the suspicious transaction reports by reporting party.

Table 1: Reports filed pursuant to the Money Laundering Act by reporting party

Number 2010 2009 Suspicious Banks Credit banks 2,789 2,506 transaction Saving banks and state central banks 3,946 3,185 reports pur- Credit unions and co-operatives 2,163 1,594 suant to the Money Laun- Deutsche Bundesbank and main branches 16 11 dering Act Other 1,313 815 (initial Total 10,227 8,111 reports) Insurance companies Total 97 47 Financial service providers Total 574 830 Financing companies Total 76 Government authorities (Sec. 14 and 16 of the Money Laundering Act) Total 66 Parties required to Lawyers 10 16 report (Sec. 2 (1) Legal advisers ------no. 7-12 of the MLA) Patent attorneys ------Notaries 45 Auditors --- 1 Certified accountants ------Tax consultants 31 Agents in tax matters ------Real-estate brokers --- 1 Casinos 11 8 Persons trading in goods 33 12 Total 61 44 Other reports filed pursuant to the Money Laundering Act Total 70 2 Gesamtsumme 11,042 9,046 Page In the past years there has been a clear decrease in the Graph 2: Suspicious transaction reports filed 11 number of suspicious transaction reports filed by financial pursuant to Section 11 of the MLA without service institutions (2008: 920, 2009: 830 and 2010: 574). the financial agents phenomenon

2.1.2 Possible causes for the increase in the number 8,000 7,956 of suspicious transaction reports 7,000 6,652 6,555 6,378 The reason stated for 2009 that the massive increase in the 6,000 suspicious transaction reports was closely linked to the 5,000 clear growth of financial agent 2 and/or phishing activities, is not valid for 2010. 4,000 In 2009, of the 9,046 STRs, 2,394 reports were filed in con- 3,000 nection with financial agent and/or phishing activities. Thus, the “adjusted” number of STRs, minus these reports, 2,000 amounts to 6,652. For 2010, the “adjusted” number of 1,000 reports is 7,956. After, from 2007 to 2009, the number of “adjusted” suspicious transaction reports had remained 0 2007 2008 2009 2010 relatively constant, an increase by nearly 20% was reached from 2009 to 2010. (For further details regarding the financial agents phenome- In our opinion, this increase may be related to the discussi- non see 4.2.1). ons held after the FATF assessment (“threshold of suspici- The following Graph 2 shows the “adjusted” number of on” of Section 11 MLA). In the course of the discussions suspicious transaction reports, excluding the financial held in 2010 the FIU had once again pointed out that a agents phenomenon: suspicious transaction report always has to be filed when “the reporting parties know, have the suspicion or have rea- sonable cause to believe that money laundering or terrorist financing has been or will be committed or attempted” (as mentioned in the explanatory memorandum to the Act amending the Money Laundering Suppression Act, German Bundestag printed matter 16/9038). This may have led to the reporting parties, who had perhaps previously erroneously interpreted the threshold of suspicion too strictly, now to file more reports.

2 Financial Agents: Persons who pass on illegal assets (often through their bank account) to third parties

ANNUAL REPORT 2010 FIU GERMANY Page 12 2.1.3 Reports filed by the tax authorities pursuant to 2.1.4 Reports pursuant to Section 14 (2) of the Money Section 31 b of the Fiscal Code Laundering Act

Apart from the suspicious transaction reports filed pursuant In 2010, a total of 3,085 reports were received by the FIU to the MLA, the FIU received a total of 271 reports filed by from the customs authorities in accordance with Section 14 the tax authorities pursuant to Section 31 b of the Fiscal (2) of the MLA. Compared to the 1,739 reports received in Code. According to Section 31 b sentence 2 of the German 2009, this constitutes an increase of approx. 77%. This is Fiscal Code, revenue authorities shall without undue delay an indication that the competent authorities have intensi- notify the competent law enforcement authorities – with a fied their controls. copy to the FIU – of “facts that suggest that a crime pursuant to Section 261 of the Criminal Code or terrorist finan- 2.1.5 Reports filed pursuant to the Iran Embargo cing (…) has been or will be committed or attempted” . Regulation3 As compared to 2009, the revenue authorities filed 23 more In the reporting period, the FIU received 266 reports on the reports in the reporting year, which is an increase of about basis of the Iran Embargo Regulation. Compared to the 9%. Thus, the downward trend observed in 2008 and 2009 301 reports received in 2009, this constitutes a decrease of has not continued, although the high level of the years approx. 11%. The reasons for this decline have not been 2004–2007 has not been reached again. established.

Graph 3: Reports relating to money laundering pursuant to Section 31 b of the Fiscal Code

400 359 350 336 330 335 300 271 261 250 248

200

150 132

100

0 2003 2004 2005 2006 2007 2008 2009 2010

3 Council Regulation (EU) No. 961/2010 of 25 October 2010 on restricti- ve measures against Iran and repealing Regulation (EC) No. 423/2007, see also 7.4. Page 2.1.6 Number and nationality of individuals reported Table 2: Nationalities of the reported persons 13

In the 11,313 suspicious transaction reports that were filed Nationality Number in total in 2010 pursuant to the Money Laundering Act and 2010 2009 Section 31 b of the Fiscal Code, 22,208 persons were men- Total number of all persons 22,208 15,543 tioned by name (2009: 15,543). This is an increase of Total number of nationalities approx. 42%. The main reason for this massive increase is reported 10,810 9,301 the fact that the total number of reports received rose by Germany 6,655 5,866 over 20%. Another factor is the complexity of the suspicio- Turkey 593 450 us transaction reports which further rose in 2010 and, besi- Romania 295 142 des the qualitative components of the facts reported, is also Poland 281 218 reflected in the number of persons named. Russian Federation 275 292 Of the 22,208 persons reported, the nationality of 10,810 Latvia 254 91 people was named. 139 different nationalities have been Italy 184 134 established. As in the previous years, German nationals Bulgaria 158 126 (6,655 persons, approx. 61%) were by far the largest group. France 135 58 Iran 131 114 China 127 132 Lithuania 88 82 Ukraine 80 115 Other 1,554 1,481 unclear / unknown 11,398 6,242

ANNUAL REPORT 2010 FIU GERMANY Page 14 2.1.7 Corporate headquarters 2.1.8 Grounds for suspicion

In the suspicious transaction reports pursuant to the MLA The factors mentioned as circumstances arousing suspici- and the reports pursuant to Secton 31 b of the Fiscal Code, on by the reporting parties are summarized under the term a total of 4,477 companies were mentioned in 2010 (2009: “grounds for suspicion” by the FIU. For the 2010 reporting 3,531). This is an increase of 27% which can be explained year, the grounds for suspicion fall into the following cate- by the higher total number of reports received and the gories: above-mentioned better quality of the reports. The corporate headquarters of 2,808 companies were mentioned, 62% of the companies had their headquarters in Germany. Thus, the number of companies mentioned with headquarters abroad declined for the first time (from 52% to 38%). All in all, the headquarters of the companies reported are located in 108 different states.

Table 3: Headquarters of the companies reported

Corporate headquarters Number 2010 2009 Total number off all companies 4,477 3,531 Total number off all companies headquarters 2,808 2,232 Germany 1,739 1,091 Great Britain 125 105 Switzerland 116 92 Cyprus 76 55 Russian Federation 72 56 British Virgin Islands 66 69 USA 50 28 China 36 14 Netherlands 33 22 Austria 32 34 Other 463 666 unclear 1,669 1,299 Page Table 4: Grounds for suspicion indicated by the parties required to report (part 1) 15

Category Ground for suspicion Number 2010 2009 Special hints / Transfer fraud 3,172 2,504 links to known cases Link to known investigation 738 653 Internet transactions 517 417 Press releases / Open source information 193 52 Fraudulent offers 69 29 Direct debit fraud 65 15 Other (special) hints / links to known cases 342 114 Total 5,096 3,784 Document / certificate / Document forgery 422 261 identification Smurfing 77 83 Difficulties in / refusal of identification 55 87 Other (document / certificate / identification) 12 3 Total 566 434 Company Business activity 184 104 Fictitious / letter-box company 62 40 Structure / network of companies 53 42 Others (Company) 106 68 Total 405 254 Kind of business (“how”) Cash 1,755 1,866 Credit 161 110 Barter 130 90 Insurance 87 47 Non-Cash 68 489 Other (kind of business) 38 28 Total 2,239 2,630 Business purpose (“what”) Precious metals 394 60 Cheque 341 227 Real estate 292 148 Vehicle 210 113 Electronics 70 22 Building and construction 64 37 Other (business purpose) 140 107 Total 1,511 654

ANNUAL REPORT 2010 FIU GERMANY Page 16 Table 4: Grounds for suspicion indicated by the parties required to report (part 2)

Category Ground for suspicion Number 2010 2009 Account opening / Account use 3,485 2,781 account keeping Economic background 1,564 1,672 Transactions 1,468 979 Online banking 247 10 Economic authorisation 173 63 Transfers through uneconomic / indirect channels 53 30 Other (account opening / keeping) 44 30 Total 7,034 5,565 Product / customer Customer behaviour 695 605 Other (product / customer) 87 67 Total 782 672 Financing of terrorism Criminal association / organisation 35 26 Matches with listed persons 34 23 Other (financing of terrorism) 15 49 Total 84 98 No specific grounds for suspicion 80 11 Gesamt 17,797 14,162

The item “transfer fraud” in the table reflects the increase in the field of financial agents / phishing activities. Interes- ting to note is also the increase at “precious metals”. This corresponds with the currently increasingly identified phenomenon of tax offences related to the trade in precious metals. The ground for suspicion “online banking” has also considerably increased. Page 2.2 Results of processing Graph 4: Results of processing by the money 17 laundering clearing offices of the state 2.2.1 Status of report processing at the close of the criminal police offices reporting year 14% Of the 11,042 suspicious transaction reports received in 2010, 36% of the cases had not yet been completed by the 2% clearing offices by 31.12.2010. 4% of the clearing cases completed were transferred to the tax authorities, 38% 6% 38% were transferred to other specialised police investigation offices for further processing, and – for 20% of the cases – a dismissal order was recommended (6% without residual suspicion, 14% with residual suspicion). Compared to the previous years, there have been no significant changes in this connection.

4% 36%

Transfer of case to another police agency (38%) Transfer to tax authority (4%)

Processing incomplete (36%) Recommendation for dismissal without residual suspicion (6%) Processing by the money laundering clearing offices (2%) Recommendation for dismissal with residual suspicion (14%)

ANNUAL REPORT 2010 FIU GERMANY Page 18 2.2.2 Connections to types of crime in cases transfer- Graph 5: Connections to types of crime identified by red to other specialised investigation agencies clearing offices in cases transferred to other investigative agencies In the cases transferred to other specialised investigation agencies in 2010, 7,911 connections to types of crime are 1% 1%1% mentioned.4 9% As in the years before, fraud constitutes the largest phenomenon, making up one third. This corresponds with the high 6% number of reports referring to financial agent activities 33% which – as a rule – are preceded by fraud. Compared to the previous years, there have been no significant changes in this connection.

25%

24%

Fraud (33%) Other (9%) Money laundering (24%) Document forgery (1%)

not indicated (25%) Breach of trust (1%) Tax offences (6%) Drug crimes (1%)

4 Multiple listings possible. Page 2.3 Summary of report volume It is noted that, basically, the increase in the facts reported 19 is not only due to the reports filed in connection with finan- • 11,042 suspicious transaction reports pursuant to cial agent or phishing activities the number of which has Section 11 of the Money Laundering Act were filed in also very clearly risen. Rather, one of the reasons is belie- the reporting year. This constitutes an absolute peak ved to be a “threshold of suspicion” that is now correctly since the entering into force of the Money Laundering interpreted by the reporting parties, following a new aware- Act in 1993. Compared to the previous year, this is an ness-raising process, so that their obligation to file a suspi- increase of 22%. cious transaction report pursuant to the Money Laundering • This increase is not only based on a further strong rise Act is now increasingly perceived. in reports referring to financial agent or phishing acti- Further to their quantitative increase, it is noted that the vities. The “adjusted” number of STRs – without these previously very good quality of the suspicious transaction reports – also clearly increased in 2010. reports has even more improved. A further increase in the • As before, the large majority of the reporting parties complexity of the facts reported has also been established. comes from the field of the credit institutions, their share went up to 92%. The percentage of the “strong” groups in terms of numbers, such as persons trading 3 Follow-up responses by public prosecutors’ in goods, continues to be at a very low absolute level offices pursuant to Section 11 (8) of the Money in 2010. Laundering Act • The by far largest part of the suspicious transaction reports filed was based on the suspicion of fraud. Pursuant to Section 11 (8) of the MLA, the competent public • Thus, taken together, the reports filed pursuant to prosecutor’s office shall inform the Bundeskriminalamt – Section 11 of the MLA and those filed pursuant to Financial Intelligence Unit – of the commencement of public Section 14 (2) of the MLA amount to 14,127 altoget- legal proceedings and the outcome of the proceedings her. • in criminal proceedings where a report has been made pursuant to Section 11 (1) or Section 14 of the Money Laundering Act, or • in other criminal proceedings initiated for an offence according to Section 261 of the Penal Code or in which suspected offences pursuant to Section 1 (2) of the MLA were investigated. This shall take the form of sending a copy of the indictment, the reason for dismissal or the verdict. These provisions in the Money Laundering Act are the basis for the following evaluation results regarding the follow-up responses received by the FIU in the reporting year.

ANNUAL REPORT 2010 FIU GERMANY Page 20 3.1 Statistical analysis The above comparison of the follow-up responses with the suspicious transaction reports received by the FIU shows In the 2010 reporting year, a total of 5,007 follow-up that the number of follow-up responses increased from responses by public prosecutors’ offices pursuant to Secti- 2009 (4,838) to 2010 (5,007), but the “response quota” on 11 (8) of the MLA were recorded and analysed by the FIU. dropped by 8%. In 2009, an increase in the number of follow-up responses One of the reasons for this development could be the high by approx. 25% (978 responses) was established. In 2010, number of the still pending proceedings from 2010 whose however, this increase was merely a little more than 3% judicial outcome will only be available in the years to come. (169 responses). The response reporting practice of the prosecutors’ offices has developed as follows since 2003: 3.2 Analysis of content

Table 5: Number of follow-up responses in relation 3.2.1 Judgements, penalty orders, bills of indictment to the number of suspicious transaction reports5 Of all follow-up responses received by public prosecutors’ offices in 2010 (5,007), a total of 418 (8.3%) contained jud- Year Number of Number of Difference Quota gements, penalty orders or bills of indictment. follow-up STRs pur- in % Another 79 follow-up responses were reports pursuant to responses suant to the Directive on Reporting in Criminal Cases (MiStra) and MLA applications for penalty orders which, in the following Table 2003 13 6,602 6,589 0.2 6, were summarised under “other follow-up responses”. 2004 518 8,062 7,544 6 2005 1,680 8,241 6,561 20 Table 6: Judgements, penalty orders and 2006 3,018 10,051 7,033 30 indictments forwarded 2007 4,107 9,080 4,973 45 2008 3,850 7,349 3,499 52 Year Judge- Penalty Indict- Other Total 2009 4,838 9,046 4,208 54 ments orders ments 2010 5,007 11,042 5,935 46 2008 31 138 42 --- 211 2009 32 143 82 --- 257 2010 60 262 96 79 497

Considering the 418 forwarded indictments / penalty orders 5 A direct comparison between the suspicious transaction reports filed / judgements under the aspect of “predicate offences”, it is during the calendar year and the follow-up responses received by the noted that, in 336 cases (68 %), so-called financial agents FIU can only be made with reservations due to the fact that the follow- up responses may also refer to suspicious transaction reports filed in have been indicted / sentenced. The charge in these cases previous years. A trend comparison is, however, possible in our opinion was money laundering, mostly preceded by (computer) since this “distortion” is probably largely evened out by the monitoring over several years. fraud. Page Follow-up responses relating to investigations for 3.2.2 Dismissal orders 21 suspected terrorist financing were not received in 2010. The following table shows the predicate offences mentio- Of the 5,007 follow-up responses received in total by the ned in the indictments / penalty orders / judgements . FIU from the public prosecutors’ offices, nearly 90% (4,510) of the cases are dismissal orders. Beyond the prosecutorial reasons for dismissal, these fol- Table 7: Predicate offences mentioned in the low-up responses only seldom contained explanatory infor- judgements, penalty orders and bills of mation or information of typological relevance. indictment Moreover, it was often not possible to establish if the proceedings were dropped in relation to the suspicion of Predicate offence Number in % money laundering, but continued in relation to the predica- Fraud offences 385 69.75% te offence. of these, computer fraud 233 Document forgery 51 9.24% Tax offences 9 1.63% 3.3 Conclusion Drugs offences 6 1.09% Withholding or embezzlement of In the 2010 reporting year, a slight increase in the absolute wages/salaries 5 0.91% number of follow-up responses was established, but com- Breach of trust 4 0.72% pared to the total number of suspicious transaction reports Handling stolen goods 3 0.54% received, the response quota dropped by 8% to 46%. Violation of the Pharmaceuticals Act 3 0.54% The predominant number of judgements reported in 2010 Theft 3 0.54% for money laundering were passed because of an activity as Misappropriation 2 0.36% financial agent, mostly preceded by computer fraud. Fraudulent bankruptcy 2 0.36% Cheque fraud 1 0.18% Robbery 1 0.18% Capital investment fraud 1 0.18% Transfer fraud 1 0.18% Not indicated 75 13.59% Total 552 100.00%

6 Multiple listings possible.

ANNUAL REPORT 2010 FIU GERMANY Page 22 4 Monitoring of suspicious transaction reports The distribution of these 194 cases in 2010 is as follows: • 93 cases involving amounts of over 3 million euros According to Section 10 of the Money Laundering Act, it is each, the task of the FIU to analyse suspicious transaction reports • 13 cases involving politically exposed persons, and to regularly inform the parties obliged to report under • 9 cases involving media coverage, this Act on typologies / methods of money laundering and • 5 cases involving otherwise exposed persons, and terrorist financing as well as to identify the current trends • 74 other reasons established in this connection. To this end, the FIU subjects all incoming suspicious transaction reports pursuant to the Money Laundering Act and all reports pursuant to Section Graph 6: Monitoring of suspicious transaction 31 b of the Fiscal Code to permant intensive monitoring. reports – Noteworthy cases Further to the previously mentioned FATF assessment, the 5 monitoring of the reports received by the FIU has been 13 expanded and intensified. Thus, the suspicious transaction 9 reports were increasingly supplemented with information held by the FIU and forwarded to the competent authorities.

93 4.1 Case analysis Of the 11,042 suspicious transaction reports filed pursuant to the Money Laundering Act and the 271 reports filed pursuant to Section 31 b of the Fiscal Code, 194 cases (2009: 141) were classified as “especially relevant to analysis”. 74 The significance of these cases refers to the persons involved (politically, economically or otherwise exposed) or the amount of the transactions reported (over three million euros). Cases can also be classified as “especially relevant to analysis” due to their media coverage or for other rea- high transaction amount (93) sons (e.g., special modus operandi or exceptional nature of note worthy case (74) the commodity traded). media coverage (9) politically exposed (13) otherwise exposed (5) Page 4.2 Monitoring of trends 4.2.1 Financial agents 23

Trend monitoring is carried out by the strategic sector of the A total of 3,086 reports (28% of all suspicious transaction FIU if the monitoring of all suspicious transaction reports reports pursuant to the MLA) with links to financial agent or reveals indications in respect of money laundering or terro- phishing activities were received by the FIU in 2010. Com- rist financing phenomena that are of special relevance to pared to the previous year, this is an increase of about analysis or investigation. Monitoring is initially carried out 29%. These 3,086 reports mark an absolute peak in this for a period of three months and is then subjected to a first area. assessment. If a further and more intensive monitoring of The development of the reports with links to financial agent the trend appears necessary, this initial period of three or phishing activities since 2006 is shown in the following months is extended. In 2010, four such trends were moni- graph: tored. The monitoring concerns the below-mentioned phenomena with the following distribution of the 3,269 reports received Graph 7: Number of suspicious action reports in total in this connection: involving financial agents

• Financial agents: 3,086 cases 3,500 • Electronic payment systems: 94 cases 3,086 3,000 • 500 Euro notes: 48 cases 2,525 2,500 2,394 • CO2 emission allowances: 41 cases 2,000

1,500

1,000 971

500 265 0 2006 2007 2008 2009 2010

ANNUAL REPORT 2010 FIU GERMANY Page 24 The development of the relationship between suspicious transaction reports pursuant to the MLA and the reports with links to financial agent or phishing activities is illustra- ted in the following graph.

Graph 8: Number of suspicious transaction reports involving financial agents compared against the total number of reports filed

12,000

10,051 10,000 9,080 9,046

8,000 7,349

6,000

4,000

2,525 2,394 2,000 971 265 0 2006 2007 2008 2009 2010

STRs Financial agent / phishing activities

The number of reports with links to financial agent or phis- make additional money with which unknown “enterprises” hing activities has unfortunately increased, in spite of search for financial agents. Instead of supposedly lucrative extensive awareness raising measures and efforts on the business, the financial agents face punishment for negli- part of the security authorities and the reporting parties to gent money laundering as well as claims for compensation reduce and contain this phenomenon. on the part of the victims. Thus, due to the strong increase in suspicious transaction For this reason, the FIU requests all those obliged to report reports involving the financial agents phenomenon, in June under the MLA to continue to raise the awareness of their 2010, the FIU published an alert on the website of the Poli- customers/partners for this issue and to inform them, as ce Crime Prevention Programme of the Federation and the they may deem appropriate, of the dangers involved and the federal states („Programm Polizeiliche Kriminalprävention above-mentioned Internet contents. der Länder und des Bundes“) www.polizei-beratung.de/ After, in the previous years, suspicious transaction reports themen-und-tipps/betrug/finanzagenten.html. This alert with links to financial agents were predominantly filed by explicitly warns against dubious job offers and offers to financial transfer service providers, the major part of the Page reports filed in 2010 comes from the big credit institutions. 4.2.2 Electronic payment systems 25 The financial agents recruited increasingly open accounts with these banks through which the illegal assets are then In 2010, the FIU received 94 suspicious transaction transferred to other accounts. A development can currently reports relating to the electronic payment systems pheno- be identified that financial agents no longer withdraw the menon. The year before, 63 reports relating to this trend illegal funds in cash and then transfer them abroad via a had been filed. This clear increase by nearly 50% confirms financial transfer service provider, but transfer them to the prognosis of the 2009 Annual Report concerning a furt- another interim account of a second financial agent. her increase in the reports relating to this phenomenon. It has been established in the previous years that the vast However, compared to the total number of reports filed majority of the predicate offences mentioned in the finan- (11,042), these 94 suspicious transaction reports continue to cial agents reports was in the field of online banking fraud. represent a very small number in absolute terms. In spite of This phenomenon is still very often found. In the meantime, this low number, according to the FIU, the electronic payment a clear increase has become apparent in predicate offences systems phenomenon represents a high threat potential in involving other offences of fraud, especially Internet or che- the field of money laundering. For this reason, this phenome- que fraud. The above-described manifestation in the field of non will be subjected to further intensive monitoring. phishing at a very high level and, in addition, the increase At international level as well, the electronic payment sys- of the cases in other fields of crime can serve as an expla- tems phenomenon is given great attention. The FATF project nation for the rise in the total number of reports relating to “New Payment Methods” where Germany has been entrus- this trend. ted with the project management, is given as an example in this context.

4.2.3 500 Euro notes

The monitoring of this trend started on 25.08.2010. The reason for the monitoring was an enquiry of the Customs Criminal Investigation Office (Zollkriminalamt) according to which “…examinations have revealed that 500 Euro notes are often the subject of criminal offences. As a consequence, the United Kingdom was one of the countries to react and prohibited transactions with 500 Euro notes as of May 2010…” Since the monitoring of this trend, a total of 48 suspicious transaction reports involving 500 Euro notes have been filed. In contrast to the cross-border approach of the customs, the national assessment of the respective reports revealed no indications that 500 Euro notes have a special significance in the field of money laundering in Germany.

ANNUAL REPORT 2010 FIU GERMANY Page 26 4.2.4 CO2 emission allowance trading 4.3 Results of targeted operational analysis

The background of these activities were fraud offences in In the course of 2010, the analysis of the cases – already

connection with turnover tax. CO2 emission allowances conducted at a qualitatively high level – was further inten- were traded by numerous companies in Europe across bor- sified and expanded in many parts of the strategic sector of ders, circumventing their duty to pay turnover tax. the FIU. In 2010, 41 suspicious transaction reports were filed in Specifically, the close interaction between the strategic connection with the monitoring of this trend. In 2009, this sector of the FIU and the operational sector on the one number was 28. It must, however, be considered that the hand, and with the other police case officers at the BKA on monitoring of this trend did not start before July 2009. the other hand has been considerably strengthened. Since 01.07.2010, due to legal adjustments, it is no longer • In 2010, a total of 190 suspicious transaction reports

possible to commit turnover tax fraud with CO2 emission were identified which, after a first analysis at the FIU, allowances. The monitoring of this trend was thus stopped contained indications of possible terrorist financing. on 31.12.2010. These reports were forwarded to the State Security The close monitoring of this phenomenon revealed, howe- Division at the BKA (Division ST) for further proces-

ver, first indications of a shift from fraudulent CO2 emission sing. In the year before, 98 suspicious transaction allowance trading to the fraudulent trade in energy, raw reports were forwarded to the competent section wit- materials or high-value electronic equipment. In this light, hin the ST Division. This increase by over 90% consti- the trend is the subject of further intensive observation. tutes a peak in this area for 2010. • 193 suspicious transaction reports contained matches regarding persons and/or organisations that were relevant in the framework of the international FIU information exchange. These reports were handed over to the operational sector of the FIU for assessment of the information and, in case of positive assessment, inclusion of the information in the national and international information exchange. • Ten suspicious transaction reports were found to contain links to other investigations conducted at the BKA so that they were forwarded to other BKA secti- ons for assessment and checking of the relevance of their contents. Page 4.4 Typologies 5 National cooperation 27

The systematic monitoring of all suspicious transaction 5.1 Public relations work reports again showed a wide variety of typologies. From the FIU’s perspective, the following two typologies identified in In the light of the role of the FIU Germany as the central 2010 are especially worth mentioning: national office for the fight against money laundering and the financing of terrorism, one of its core tasks is an intensive and proactive public relations work. 4.4.1 Precious metals In this context, the FIU makes a distinction between “generally accessible information” on the one hand, and “addres- As early as 2008, the FIU had found first indications of a see-specific public relations work” on the other hand, new typology “gold separation plants” and tax offences which, for example, is intended exclusively for those obliged associated therewith.7 In 2009, a total of 69 reports were to report. As a police agency, the FIU also has the task of filed in this field. In 2010, this number rose to 394 reports. distributing its information in the fields of money laundering The public relations work done by the FIU in this field led to and terrorist financing on an internal police level. a clear increase by 325 reports (almost 475%). New (simi- lar) typologies going beyond those so far known have not been identified. 5.1.1 Generally accessible information

One important aspect of the public relations work done by 4.4.2 Financial agents the FIU is the information posted on the homepage of the Bundeskriminalamt (www.bka.de) on the issues of sup- In 2010, 158 cases were reported in which financial agents pression of money laundering and suppression of the finan- forwarded funds obtained from offences in the field of Inter- cing of terrorism. This website is continuously updated and net fraud. In 2009, merely 29 cases were reported. This all those interested can get a good insight into the status of example confirms the clear increases in financial agent the suppression of money laundering by reading, for exam- activities in the field of other fraud offences (see 4.2.1). ple, the following material: In 2009, 26 cases were reported in which financial agents forwarded the illegally obtained funds by means of electro- Annual reports of the FIU nic payment systems. In 2010, 44 cases with this modus The FIU has posted all eight Annual Reports prepared so far operandi were reported. This is a manifestation of the (2002–2009) on its web page. Apart from the 2003 Annual increase in the number of these cases – on a still very low Report, all reports are also made available in English. absolute level, however.

7 See FIU Newsletter No. 8 of November 2009.

ANNUAL REPORT 2010 FIU GERMANY Page 28 Money Laundering Act (MLA) 5.1.2 Addressee-specific public relations work In addition to the German version, an English version has been posted which is a working translation meant to serve Special material has been posted on the password-secure as an aid.8 section of the FIU website10 for those agencies that are obliged to cooperate under the Money Laundering Act or Publications by the Financial Action Task Force (FATF) assist the FIU as a partner in the fight against money laun- Some important publications by the FATF on the issue of dering. This includes, in particular: suppression of money laundering and the financing of terrorism have been posted here. It is generally recommended FIU Newsletter to access the FATF’s homepage directly at www.fatf- With its Newsletter, the FIU keeps all parties required to gafi.org where additional publications can be found. report pursuant to the MLA and the criminal justice autho- In order to keep the Internet presentation of the FIU as rities updated about current developments and typologies in updated and informative as possible, any suggestions for the field of the suppression of money laundering and terro- new contents are welcomed. Please see Appendix 1 for a rist financing. graphic description of the structure and path of the Internet In 2010, the 9th Newsletter was published on the BKA site. homepage. With this publication, all relevant agencies in Germany were given an interim report, after three quarters Crime Prevention of the year, on the most interesting quantitative and quali- The FIU also contributed to the Internet presentation of the tative developments regarding suspicious transaction Police Crime Prevention Programme of the Federation and reports in Germany. the federal states (“Programm Polizeiliche Kriminalpräven- In addition to the analysis of the sharp increase in case tion der Länder und des Bundes“): In June 2010, informati- numbers, information was given on current trends (“finan- on was posted on www.polizei-beratung.de, describing the cial agents”, “use of electronic payment systems”, “use of methods and consequences of the frequently found recruit- 500 Euro notes”) and typologies (“assignment of contractu- ment of financial agents by criminal offenders. This measu- al rights”, “gold vending machines”11) . re warns computer users against becoming involved in cri- It is once again pointed out here that all agencies and insti- minal activities under the guise of jobs offered by criminals. 9 tutions involved in the suppression of money laundering have the possibility to forward relevant contributions to the Newsletter to the FIU.

10 The access data can be obtained by the authorised parties from the competent supervisory authorities. Proof must be furnished of the 8 The only legally authoritative version is, however, the version of the appointment as a money laundering officer. Money Laundering Act that has been published in the Bundesgesetz- 11 Such a machine offers the possibility to purchase gold in the form of blatt (Federal Law Gazette). bars and coins. Payment is made by inserting cash or a payment card 9 See also 4.2.1 into the machine. Page Indicator paper • Plenary meeting of the Egmont Group in Cartagena 29 This paper – developed jointly by the state criminal police (Columbia) offices, the parties required to report pursuant to the MLA, • Main course 2010 of the Middle European Police Aca- and the FIU – contains a catalogue of indicators which are demy to assist the parties required to report in recognizing cases • “Export control day” of the Federal Office of Econo- of relevance to money laundering and the suspected finan- mics and Export Control cing of terrorism. • Meeting of the supervisory authorities of the “non- financial sector” (Section 16 (2) no. 9 of the MLA) Sample forms • International seminar of the Deutsche Bundesbank on The forms “Verdachtsanzeige nach § 11 GwG” (Suspicious the suppression of money laundering transaction report pursuant to Section 11 of the Money Unfortunately, in 2010 as well, the FIU was not able to com- Laundering Act) and “Staatsanwaltschaftliche Rückmeldun- ply with all requests to make presentations or to take part gen gem. § 11 Abs. 8 GwG” (Follow-up responses from in training measures. public prosecutors’ offices pursuant to Section 11 (8) of the Money Laundering Act) are available to those who are required to report. 5.2 The Working Party of Banks and Chambers

In 2010 as well, the FIU organised the annual meeting of the 5.1.3 Presentations / training measures Working Party of Banks and Chambers. As in the previous years, the meeting was attended by The FIU also supplies information on its activities by means experts of the Bundeskriminalamt, representatives of the of presentations and training measures. Information can state criminal police offices, the Customs Criminal Investi- thus be disseminated to specific target groups. gation Office, the bank associations, (professional) cham- The number of presentations and the participation in trai- bers, major German banks and financial service providers. ning courses were kept at a high level in 2010. The FIU Ger- For the first time, representatives were present from autho- many was actively involved in a total of 35 events at natio- rities which, pursuant to the MLA, are responsible for super- nal and international level. vision of the so-called “non-financial sector”. As in the years before, the circumstances, participants and After the presentation of figures and trends regarding framework conditions of the events were very heterogene- suspicious transaction reports filed in the first three quar- ous. They ranged from training courses for law enforcement ters of 2010, above all the following issues were presented authorities to meetings of the parties required to report pur- and discussed: suant to the MLA and international conferences. Here are some examples of important events in which the FIU was actively involved by means of presentations or the like:

ANNUAL REPORT 2010 FIU GERMANY Page 30 • FATF assessment of Germany – results / reactions / The typology work of the case collection mainly relies on need for action the following sources: • Awareness-raising measures for the parties required • Investigations with money laundering links that are to report in connection with the financing of terrorism handled in the German federal states, by the Federal (inter alia, “threat investigations” pursuant to Section Police or the Customs Criminal Investigation Office 4a of the BKA Law in connection with Section 24 c of • Information obtained from the operational sector of the Banking Act) the FIU • Threshold of suspicion for reports pursuant to Section • Information obtained from the assessment of the fol- 11 of the MLA low-up responses from public prosecutors’ offices • New payment systems pursuant to Section 11 (8) of the Money Laundering The large number of participants at the meeting and the Act lively discussions again showed that the Working Party of • Evaluation of press reports and observation of open Banks and Chambers is used and appreciated as a platform sources for the exchange of experience of all parties involved in the • Work results of international bodies and their working suppression of money laundering and terrorist financing. groups, in this case especially the FATF and the Provided there are enough relevant issues to discuss, the Egmont Group FIU Germany plans to organise this Working Party again in In 2010, the gathering of relevant information mainly took 2011. the form of a case query in the German federal states, at the Federal Police and at the Customs Criminal Investigation Office. It was the fourth time that such a comprehensive 5.3 Case collection query was made. The assessment and processing of the data will be continued in 2011. The information contained in Pursuant to Section 10 (1) No. 5 of the MLA, the FIU “(…) the case collection will be disseminated to those interested shall regularly inform the parties obliged to report on types by means of the established FIU media. and methods of money laundering and terrorist financing”. The FIU is meeting this legal mandate by, among other things, the case collection. In the context of operational case analysis at the FIU, the case collection covers the gathering of relevant information and intelligence from the field of the law enforcement authorities both with regard to financial investigations “inte- grated” into specific proceedings and financial investigations “independent” of specific proceedings. National and international sources of information are used. Page 6 International Cooperation This steady increase in case numbers continued in 2010. 31 Whereas the increase rates were rather moderate in 6.1 Exchange of information with other FIUs 2004–2008, a significant rise can be observed in the last two years. The FIU Germany is an important and central point of con- A differentiation of the cases in 2010, sorted by requesting tact for the global information exchange between the 120 authority, produces the following picture: FIUs now organised within the Egmont Group.12 A total of 837 enquiries (previous year: 732, increase by In 2010, information was exchanged with 80 different 14%) were addressed to the FIU Germany by foreign FIUs. foreign FIUs on a total of 1,044 case-specific facts. This As a rule, these case-specific facts were disseminated wit- represents an increase of approximately 15% over the pre- hin Germany to the state criminal police offices for infor- ceding year. mation and/or gathering of supplementary information

Graph 9: Development of the case numbers of the FIU information exchange

1,200

1,044 1,000 906

800 744 773 718 657 606 600 482

400

200

0 2003 2004 2005 2006 2007 2008 2009 2010

12 See Appendix 2.

ANNUAL REPORT 2010 FIU GERMANY Page 32 available at regional level. Dissemination took place on The following table shows the distribution of enquiries demand of the requesting FIU or upon appropriate assess- received at the FIU Germany by country. ment of the FIU Germany – after permission for the release of the data had been obtained from the originator. Table 8: Requests for information addressed to the 207 enquiries were received by the FIU from German FIU Germany (Top 20) agencies for onward transmission of the respective facts to foreign FIUs (previous year: 174, increase by 19 %). 2010 2009 Prev. year In order to get a rough impression of the complexity of the +/– cases mentioned in the FIU correspondence and to observe Germany 207 174 33 their development, statistical evaluations have been made Luxembourg 133 109 24 of the parameters “number of documents per case” (12), Belgium 102 84 18 “number of natural persons mentioned” (5) and “number of Slovakia 57 50 7 legal entities mentioned” (3). Switzerland 53 49 4 The average values per case shown in parantheses already Finland 33 27 6 indicate that extensive follow-up correspondence was Liechtenstein 29 29 0 exchanged and, as a rule, the information exchange refer- France 24 31 –7 red to several persons and companies. Hungary 24 17 7 This (statistical) evaluation does not include the investigati- Bulgaria 21 24 –3 ons conducted by the FIU at the Bundeskriminalamt in 2010 Great Britain 20 22 –2 pursuant to Section 4 (2) of the BKA Law on suspicion of Guernsey 19 15 4 money laundering. In these case complexes, investigations Netherlands 19 19 0 were conducted into several hundred natural persons and Spain 19 12 7 legal entities. The number of documents produced in this USA 18 13 5 connection ascends well into the four-digit range (regarding Cyprus 17 6 11 these investigations, see also 6.3). Jersey 16 97 As one of the few FIUs worldwide, the FIU Germany has the Russia 16 13 3 legal and factual possibilities to establish if a person or a Poland 14 20 –6 company has a bank account or depository account at a Ukraine 13 22 –9 credit institution in Germany. In 2010, such valuable infor- Other 190 161 29 mation was forwarded to foreign FIUs in 97 cases. Total 1,044 906 138

The number of countries with which the FIU Germany exchanged information in 2010 has increased to 80 from 68 (in 2009). Thus, in 2010, concrete case-specific cooperation took place with two thirds of all FIUs organised in the Egmont Group. Page Compared to the previous years, the countries mentioned in 6.3 Investigative successes 33 the table above have more or less remained the same, i.e. the focuses can be described or explained with the criteria The Bundeskriminalamt with the FIU Germany as a police “neighbouring state”, “financial centre” or “phishing agency possessing competencies and expert knowledge in cases”. the field of the repressive fight against money laundering, achieved considerable investigative successes in the 2010 reporting year as well. The following two cases are mentio- 6.2 International events / contacts ned as examples: • Together with the tax investigation services and a Pro- Some outstanding international events attended by mem- secutor General’s Office, an extensive investigation is bers of the FIU Germany in 2010 are mentioned in the fol- being conducted on suspicion of tax evasion on a lowing: repetitive and gainful basis and (international) money • 18th plenary meeting of the Egmont Group in Cartage- laundering. According to the current state of the na (Columbia) enquiries, the (tax) loss incurred amounts to at least An essential moment of the meeting, from the point of 180 million Euros. Several hundred premises were view of Germany, was the election of the Head of FIU searched in this investigative complex in 2010, four Germany to one of the three European representatives people were arrested, several legal assistance in the Egmont Committee. requests were made and assets in the three-digit mil- • Meetings of the Board of Partners and working mee- lion range were secured. tings within the scope of the FIU.Net project • According to a request for information received from a In these events, Germany has contributed to the suc- European FIU, a person who has links to Germany has cessful further development of this communication considerable assets in his account in the foreign coun- medium between European FIUs both at the manage- try whose legal origin is doubted. Investigations of the ment level of the project and at working level. Bundeskriminalamt with the support of the FIU have • Bilateral working meetings with various FIUs on ope- revealed that the subject is under investigation in Ger- rational cases and strategic issues many for violations of the Narcotic Drugs Act and the Especially in the framework of the investigations con- Weapons Act. As a consequence, a large amount in the ducted by the Bundeskriminalamt, it has often been six-digit range has been secured from the foreign necessary to hold operational working meetings with account following speedily initiated legal assistance foreign FIUs or other foreign law enforcement authori- measures. The person in question has meanwhile ties. been sentenced to a long term of imprisonment. • Plenary and typology meetings of the FATF • Meetings of the EU-FIU platform • Presentations given at international congresses in Germany and abroad • Assistance provided to foreign delegations and visitors from, inter alia, the fields of law enforcement, banks and science

ANNUAL REPORT 2010 FIU GERMANY Page 34 These examples and numerous other successful cases of 7 Financing of terrorism international information exchange demonstrate the advan- tage of a police FIU located within a law enforcement aut- 7.1 Suspicious transaction reports filed pursuant to hority. Due to the fact that FIU information can be searched the MLA for suspected financing of terrorism against police databases, it is possible to identify links between cases and to take immediate police action. In 2010 as The following table shows the percentage of STRs filed pur- well, this resulted in considerable investigative successes suant to the MLA for suspected terrorist financing among in the fight against Organised Crime. the total amount of STRs filed by the reporting parties. It is generally noted that, in 2010, the information exchange Table 9: Suspicious transaction reports filed for suspected with other FIUs involved more cases reported to the FIU involvement in the financing of terrorism Germany which had tax offences as a possible predicate It appears from the table that the number of suspicious offence to money laundering. A large part of the informati- transaction reports filed pursuant to the MLA for suspected on forwarded was disseminated for investigative purposes terrorist financing rose from 98 to 124. This corresponds to with the consent of the foreign FIUs. This led to intensified the increase in the total number of suspicious transaction cooperation with the German tax authorities. reports filed pursuant to the MLA.

Table 9: Suspicious transaction reports filed for suspected involvement in the financing of terrorism

2010 2009 2008 2007 2006 2005 Total number of suspicious transaction reports (STRs) filed pursuant to the Money Laundering Act 11,042 9,046 7,349 9,080 10,051 8,241 of them, STRs checked by the BKA’s 470 415 281 384 376 358 State Security Division Percentage share of the total number of STRs 4.3% 4.6% 3.8% 4.2% 3.7% 4.3%

STRs filed by the parties required to report 124 98 65 90 59 104 for suspected “financing of terrorism“ Percentage share of the total number of STRs 1.1% 1.1% 0.9% 0.9% 0.6% 1.3% Page An increasing number of suspicious transaction reports Checks of STRs for possible links to the financing of 35 filed for suspected terrorist financing was noted at the end terrorism of the year 2010. This is believed to be due to the efforts Original jurisdiction for the handling of suspicious transac- made to raise public awareness for the threat posed by Isla- tion reports lies with the specialised units at the state cri- mist terrorism. minal police offices where all suspicious transactions However, the parties with reporting obligations obviously reports are generally checked also for links to terrorist still have problems to identify cases of suspected terrorist financing. financing merely by looking at customer profiles and the Of the 11,042 suspicious transaction reports filed altoget- account management. her in 2010, 470 were forwarded to the State Security Divi- sion of the Bundeskriminalamt because, after thorough exa- Suspicious transaction reports with possible mination by the competent clearing offices of the list matches Federation and the states, possible links to politically moti- Of the 124 STRs filed for suspected financing of terrorism, vated crime (PMC) could not be ruled out. 14 were filed for possible matches with Council Regulations (EC) No. 2580/2001 and (EC) No. 881/2002 (so-called list matches). In 2010 as well, a match with listed persons or organisastions was found in none of the cases.

Graph 10: Distribution of STRs filed for suspected terrorist financing

140

120 14

100 23 80 58 25 60 110 21 21 40 75 65 20 46 38 44

0 2005 2006 2007 2008 2009 2010 Other terrorist financing Possible list matches

ANNUAL REPORT 2010 FIU GERMANY Page 36 Of the 470 suspicious transaction reports forwarded, a rele- 7.2 FIU correspondence vance to the field of PMC was initially thought to exist in 30 cases. Concrete indications of terrorist financing have been During the reporting year, 837 enquiries were made to the established in none of the cases. The investigations also did FIU Germany by foreign FIUs. Of these, four enquiries men- not result in any relevant information for the development of tioned suspected terrorist financing as the reason for typologies of terrorist financing. making the enquiry. The suspicion has, however, not been substantiated in any of these four cases. Investigative proceedings based on suspicious A final assessment of these enquiries has not been possible transaction reports in the vast majority of cases due to the lack of personal In 2010, nine suspicious transaction reports led to the insti- details concerning the person(s) in question. tution of investigative proceedings in the field of politically motivated crime.13 Final reports on the outcome of these proceedings have not yet been received. 7.3 Conclusion Case examples • In the course of routine Internet searches, a credit The absolute number of cases generated from all suspicio- institution found an appeal for donations with obvio- us transaction reports pursuant to the Money Laundering usly Islamist background. A suspicious transaction Act and enquiries made to the FIU Germany with possible report for suspected terrorist financing was filed pur- links to PMC and/or terrorism is rather low. Still, this instru- suant to Section 11 of the MLA because this appeal for ment of information gathering must continue to be regarded donations mentioned an account number of the credit as one component in the overall fight against the pheno- institution. The account was blocked. Investigative menon “terrorist financing”. proceedings have meanwhile been instituted against Statements on classical “typologies” which are again and the account holder for suspected violation of Section again requested from the parties required to report pursu- 89a of the German Criminal Code (Establishing con- ant to the MLA can hardly be made in the field of terrorist tacts for the purpose of committing a serious violent financing. Information has been obtained on how terrorist offence endangering the state). financing was carried out in individual cases, but this has • In another case, a suspicious transaction report was not resulted in any criteria for suspicion of a general nature. filed against a customer following a request for information by the Federal Prosecutor General in an investigation instituted, among other things, for suspected membership in a terrorist organisation abroad. A sub- sequent analysis of the account transactions substantiated the suspicion that the customer transferred funds of the person charged in the investigation through his account.

13 These figures are based on statistical data of the initial stage of an investigation, i.e. only such investigative proceedings are mentioned in which financial investigations were started in the 2010 reporting year. Page 7.4 Measures against the Islamic Republic of Iran In the 2010 reporting year, 266 reports pursuant to Council 37 according to Council Regulation (EU) no. 961/2010 Regulation (EC) no. 1110/2008 were forwarded to the FIU Germany and checked for links to PMC (2009: 301). These On 25.10.2010, Council Regulation (EU) no. 961/2010 reports were passed on directly to the Customs Criminal repealed the previously valid Regulation (EC) no. 423/2007 Investigation Office. Of these 266 reports, 185 have so far in connection with Regulation (EC) no. 1100/2008. It regu- been completed there. In two of these cases, it was recom- lates authorisation procedures for the transfer of funds from mended to perform audits pursuant to the Foreign Trade and to Iran. and Payments Act for the purpose of monitoring complian- Accordingly, all transfers of funds through payment service ce with this Act. Links to proliferation have been established providers by electronic means from and to Iranian persons, in none of the cases reported. organisations and institutions are subject to a notification requirement (Art. 1 of the Iran Embargo Regulation). This includes transfers to and from legal persons outside Iran that are owned or controlled by the Iranian state, Iranian authorities or natural/legal persons in Iran. All transfers of funds from and to Iranian persons, organisations and institutions exceeding 40,000 Euros are subject to a prior authorisation requirement.

ANNUAL REPORT 2010 FIU GERMANY Page 38 8 Final conclusions and outlook As far as the suppression of the financing of terrorism is concerned, it is noted that – with regard to the absolute In the 2010 reporting year, the FIU Germany as the central case numbers – it is obviously still very difficult for the office for suspicious transaction reports to counter money reporting parties to generate suspicious cases. Also, “clas- laundering and terrorist financing received a total of over sical” typologies or suspicious profiles can be recognised to 20,000 reports14 pursuant to the provisions of the Money a very limited extent only by means of suspicious transac- Laundering Act and the Fiscal Code. Almost all figures recei- tion reports in this area. ved in nearly all areas considered were on the rise – in Through the work of the FIU, the Bundeskriminalamt achie- some cases in the two-digit percentage range. Above all the ved considerable investigative successes in 2010 as well. number of suspicious transaction reports pursuant to Secti- It is above all the excellent cooperation with the tax inves- on 11 of the Money Laundering Act rose by 22 % and, thus, tigation authorities that proved very effective and has a reached an absolute peak since the entering into force of model function for the future. the Money Laundering Act in 1993. One of the main targets of the FIU for 2011 – besides con- Considering the reporting parties it has been found that tinuing close cooperation with its numerous cooperation the focus is still very strongly on the credit institutions. On partners – is the further intensification of targeted opera- the other hand, the percentage of some other parties requi- tional analysis of the reports forwarded to the FIU, in order red to report pursuant to the MLA, strong in terms of num- to be able to even better support other agencies that are bers, continues to be at a very low absolute level. Increa- also responsible for the national and international suppres- sing activities of the supervisory authorities of the federal sion of money laundering and terrorist financing. states in respect of the persons trading in goods are expressly welcomed by the FIU. The follow-up responses from public prosecutors’ offices to the FIU pursuant to Section 11 (8) of the Money Laundering Act continue to show a clear potential for impro- vement, both with regard to quantity and quality. Above all the small number of really valuable follow-up responses (with judgements, bills of indictment, penalty orders) makes valid evaluations nearly impossible.

14 All reports pursuant to Section 11 (1) and (8), Section 14 (2) of the Money Laundering Act, Section 31 b of the Fiscal Code plus Iran Embar- go Regulation. ANNUAL REPORT 2010 FIU GERMANY Page 40 9 Appendices

Appendix 1: Internet presentation of the FIU Germany on the homepage of the BKA Appendix 2: List of Egmont Group members Page Appendix 1: Internet presentation of the FIU Germany on the homepage of the BKA 41

http://www.bka.de

Themen A–Z

Deliktsbereiche

Geldwäsche (FIU)

Impressum / Kontakt Veröffentlichungen Links

offener Bereich geschlossener Bereich

Jahresberichte Newsletter

Geldwäschegesetz Anhaltspunktepapier

Berichte FATF / GAFI Formulare

Postanschrift Bundeskriminalamt Referat SO 32 Zentralstelle für Verdachtsanzeigen/ Financial Intelligence Unit (FIU) 65173 Wiesbaden

Fax: +49 (0)611 55-45300

ANNUAL REPORT 2010 FIU GERMANY Page 42 Appendix 2: List of Egmont Group members (part 1)16

Country FIU-Name Type Location Afghanistan FinTRACA Admin Central Bank Albania DBLKPP Admin Ministry of Finance Andorra UPB Admin Independent Anguilla MLRA Admin Independent Antigua & Barbuda ONDCP Admin/Police Independent Argentina UIF Admin Ministry of Justice(Indep) Armenia FMC Admin Central Bank Aruba MOT-Aruba Admin Ministry of Finance Australia AUSTRAC Admin Independent Austria A-FIU Police Ministry of Internal Affairs Bahamas FIU Admin Independent Bahrain AMLU Police Anti-Economic Crimes Directorate Barbados FIU Admin Office of the Attorney General Belarus FIU Admin Belgium CTIF-CFI Admin Independent Belize FIU Admin/Pol/Judicial Independent Bermuda BPSFIU Police Police Bosnia & Herzegovina FID Police State Investigation and Protection Agency Brazil COAF Admin Ministry of Finance BVI Financial Investigation Agency Police Financial Services Commission Bulgaria FIA Admin Ministry of Finance Cameroon ANIF Admin Independent Canada FINTRAC/CANAFE Admin Independent Cayman Islands CAYFIN Admin/Police Atty General Chile UAF Admin Independent Colombia UIAF Admin Ministry of Finance Cook Islands CIFIU Admin Independent Costa Rica UAF Admin Presidential Office Côte d’Ivoire CENTIF-CI Admin Independent Croatia AMLO Admin Ministry of Finance Cyprus MO.K.A.S. Judicial/Police Attorney General’s Office Czech Republic FAU-CR Admin Ministry of Finance Denmark HVIDVASK Judicial/Police Public Prosecutor’s Office Dominica FIU Police Independent Egypt EMLCU Admin Independent El Salvador UIF-El Salvador Admin Attorney General’s Office Estonia FIU Police Estonian National Police

16 Siehe www.egmont.org Highlighted: FIUs that joined the Egmont Group in 2010. Page Appendix 2: List of Egmont Group members (part 2) 43

Country FIU-Name Type Location Fiji Fiji-FIU Admin Independent Finland RAP Police Police France TRACFIN Admin Ministry of Finance Georgia FMS Admin Independent Germany FIU Police Federal Criminal Police Office Gibraltar GCID GFIU Customs/Pol Independent Grenada FIU Police Independent Greece Committee/Art 7 Admin Independent Guatemala IVE Admin Superintendency of Banks of Guatemala Guernsey FIS Customs/Pol Indep. Service Authority Honduras UIF Admin National Commission of Banks and Insurance Hong Kong JFIU Customs/Pol Police Headquarters Hungary HFIU Customs/Admin Iceland RLS Police National Icelandic Police India FIU-IND Admin Independent Indonesia PPATK (INTRAC) Admin Independent Ireland MLIU Police An Garda Siógana Isle of Man FCU-IOM Customs/Pol Police Israel IMPA Admin Ministry of Justice Italy UIF Admin Central Bank Japan JAFIC Admin/Police Nat’l Public Safety Commis - sion/Nat’l Police Agency Jersey FCU-Jersey Customs/Pol Police Kyrgyz FIS Admin Independent Korea (South) KoFIU Admin Ministry of Finance/Economy Latvia KD Admin Prosecutor’s Office Lebanon SIC Admin Central Bank Liechtenstein EFFI Admin Ministry of Finance Lithuania MDP prie VRM Police Ministry of the Interior Macau SAR, Ch. GIF Admin Independent Luxembourg CRF Judicial Prosecutor’s Office Macedonia MLPD Admin Ministry of Finance Malawi FIU Malawi Admin Independent Malaysia FIU/UPW Admin Central Bank of Malaysia Malta FIAU Admin Independent Marshall Isles DFIU Admin Banking Commission Mauritius FIU Admin Independent Mexico UIF Admin Ministry of Finance

Highlighted: FIUs that joined the Egmont Group in 2010. ANNUAL REPORT 2010 FIU GERMANY Page 44 Appendix 2: List of Egmont Group members (part 3)

Country FIU-Name Type Location Moldova SPCSB Police Centre Comb.Crimes & Corr. Monaco SICCFIN Admin Ministry of Finance Mongolia FIU-Mongolia Admin Central Bank of Mongolia Montenegro APML Admin Independent Netherlands MOT Admin Ministry of Justice NL Antilles MOT-AN Admin Ministry of Finance New Zealand NZ Police Police Police Nigeria NFIU Admin EFCC (Law Enforcement) Niue FIU Admin Crown Law Office Norway ØKOKRIM Police/Judicial Police Panama UAF-Panama Admin National Security Council Paraguay UAF-Seprelad Admin Independent Peru UIF Admin Independent Philippines AMCL Admin Central Bank Poland GIIF Admin Ministry of Finance Portugal UIF Police Police Qatar QFIU Admin Central Bank Romania ONPCSB Admin Independent Russia FMC Admin Independent San Marino FIU Admin Central Bank Saudi Arabia SAFIU Admin Independent Senegal CENTIF Admin Independent Serbia FCPML Admin Independent Singapore STRO Police Police Slovakia OFiS ÚFP Police Ministry of Interior Slovenia OMLP Admin Ministry of FInance South Africa FIC Admin Independent Spain SEPBLAC Admin Central Bank Sri Lanka FIU-Sri Lanka Admin Central Bank of Sri Lanka St. Kitts & Nevis FIU Admin Independent St. Lucia FIA-St. Lucia Adm/Pol/Jud Police St. Vincent & the Grenadines FIU Admin Independent Sweden NFIS Police Police Switzerland MROS Admin Federal Office of Police Syria CMLC Admin Taiwan MLPC Law Enforcement Ministry of Justice Thailand AMLO Police/Admin. Independent Turkey MSK - FCIB Admin Ministry of Finance Turks & Caicos FCU Adm/Pol/Pros Police Ukraine SDFM Admin Ministry of Finance

Highlighted: FIUs that joined the Egmont Group in 2010. Page Appendix 2: List of Egmont Group members (part 4) 45

Country FIU-Name Type Location United Arab Emirates AMLSCU Admin Central Bank United Kingdom SOCA/FIU Police Police United States FinCEN Admin Ministry of Finance Uruguay UIAF Admin Central Bank Vanuatu FIU Admin State Law Office Venezuela UNIF Admin Superintendancy of Banks

Highlighted: FIUs that joined the Egmont Group in 2010. ANNUAL REPORT 2010 FIU GERMANY Page 46

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