ANNUAL REPORT 2010

Financial Intelligence Unit (FIU) GERMANY

ANNUAL REPORT 2010

FIU GERMANY

Imprint

Editor: BUNDESKRIMINALAMT Zentralstelle fr Verdachtsanzeigen FIU Germany 65173 Wiesbaden

Contents 1 2 2.1 2.1.1 2.1.2 2.1.3 2.1.4 2.1.5 2.1.6 2.1.7 2.1.8 2.2 2.2.1 2.2.2 2.3 3 3.1 3.2 3.2.1 3.2.2 3.3 Foreword Reporting behaviour: Facts and Figures Nationwide case statistics for 2010 Suspicious transaction reports (STRs) filed pursuant to the Money Laundering Act (MLA) Possible causes for the increase in the number of suspicious transaction reports Reports filed by the tax authorities pursuant to Section 31 b of the Fiscal Code Reports pursuant to Section 14 (2) of the Money Laundering Act Reports filed pursuant to the Iran Embargo Regulation Number and nationality of individuals reported Corporate headquarters Grounds for suspicion Results of processing Status of report processing at the close of the reporting year Connections to types of crime in cases transferred to other specialised investigation agencies Summary of report volume Follow-up responses by public prosecutors offices pursuant to Section 11 (8) of the Money Laundering Act Statistical analysis Analysis of content Judgements, penalty orders, bills of indictment Dismissal orders Conclusion 7 8 8 8 11 12 12 12 13 14 14 17 17 18 19 19 20 20 20 21 21

ANNUAL REPORT 2010

FIU GERMANY

Contents 4 4.1 4.2 4.2.1 4.2.2 4.2.3 4.2.4 4.3 4.4 4.4.1 4.4.2 5 5.1 5.1.1 5.1.2 5.1.3 5.2 5.3 6 6.1 6.2 6.3 7 7.1 7.2 7.3 7.4 8 9 Monitoring of suspicious transaction reports Case analysis Monitoring of trends Financial agents Electronic payment systems 500 Euro notes CO2 emission allowance trading Results of targeted operational analysis Typologies Precious metals Financial agents National cooperation Public relations work Generally accessible information Addressee-specific public relations work Presentations / training measures The Working Party of Banks and Chambers Case collection International Cooperation Exchange of information with other FIUs International events /contacts Investigative successes Financing of terrorism Suspicious transaction reports filed pursuant to the MLA for suspected financing of terrorism FIU correspondence Conclusion Measures against the Islamic Republic of Iran according to Council Regulation (EU) no. 961/2010 22 22 23 23 25 25 26 26 27 27 27 27 27 27 28 29 29 30 31 31 33 33 34 34 36 36 37

Final conclusions and outlook 38 Appendices 40

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

Tables

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

10 13 14 15 20 20 21 32 34

ANNUAL REPORT 2010

FIU GERMANY

Foreword

Upon publication of the FATF evaluation report of Germany on 19.02.2010, the FIU as well as various other agencies and institutions in Germany has very speedily begun to implement the potential for optimisation shown therein. One indication of first results of the joints efforts, from the point of view of the FIU, is a further increase in the number of suspicious transaction reports filed pursuant to the Money Laundering Act (MLA). Along with the regularly high quality of the reports, this shows the willingness of those obligated to report to make their contribution to an efficient suppression of money laundering and the financing of terrorism. The FIU Germany has further intensified its operational activities both with respect to case-specific as well as crosscase analyses and, thus, has been able to even better support the German federal states which have original jurisdiction for the handling of suspicious transaction reports.

As far as the strategic analysis of the suspicious transaction reports is concerned, noteworthy phenomena have again been intensively observed and analysed as focal monitoring points, in addition to statistical evaluations. Feedback about the information obtained was provided to the reporting parties of the German Money Laundering Act in various ways in the framework of the German FIUs public relations work. In some investigative complexes with pilot character, the FIU made significant progress in 2010 which results in successes in the fight against international money laundering and constitutes important experience for conducting major investigations in the future. The FIU Germany hopes that the Annual Report 2010 will be interesting reading for you and expresses its thanks to all cooperation partners for the good cooperation.

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Dr Michael DEWALD Head of FIU Germany

ANNUAL REPORT 2010

FIU GERMANY

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Reporting behaviour: Facts and Figures

The following information is based on the data contained in the FIU database. Merely graph 4 (Results of processing by the clearing offices of the state criminal police offices) and graph 5 (Connections to types of crime identified by the clearing offices in cases forwarded to other investigative agencies) refer to data held by the competent state criminal police offices.

2.1

Nationwide case statistics for 2010

2.1.1 Suspicious transaction reports (STRs) filed 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:
12,000

observed for both the 2009 and the 2010 reporting years. This upward trend not only continued in the 2010 calendar year, but even became more pronounced. In the past year, the FIU Germany received 11,042 suspicious transaction reports (STRs) pursuant to Section 11 of the Money Laundering Act (MLA). Compared to the 9,046 STRs from 2009, this constitutes an increase of 1,996 STRs or approx. 22%.1 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. The following graph shows the development of the suspicious transaction reports filed pursuant to the MLA (without follow-up reports) from 2002 to 2010:

Number of suspicious transaction reports filed pursuant to the MLA

11,042

10,000
8,261

10,051 9,080 9,046 7,349 6,602 8,241

8,000 6,000 4,000 2,000 0 2002

1

8,062

2003

2004

2005

2006

2007

2008

2009

2010

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).

In addition, in the 2010 calendar year, a total of 670 followup reports to initial reports were dealt with by the FIU. This means that the total number of reports handled by the FIU amounts to 11,712. As in the previous years, the vast majority of the suspicious transaction reports was filed by the credit institutions in 2010 as well. After a strong rise in the number of reports filed by this sector had already been established from 2008 (86% of all STRs) to 2009 (90% of all STRs), this number went up even futher in 2010. Of the 11,042 STRs filed in 2010, 92% were filed by credit institutions. The other reporting parties, some of whom are made up of very strong

groups in terms of numbers (e.g. persons trading in goods, lawyers or brokers), continue to be clearly under-represented in the filing of reports. As already mentioned in the Annual Report 2009, the number of suspicious transaction reports filed by persons trading in goods is at a very low level compared to the total number of persons belonging to this category. In the total year 2009, merely 12 STRs were received from this sector. 33 reports are recorded for the year 2010. This means that there is a slight trend upwards for this sector. All in all, however, the number of STRs received from this group of persons is still at a very low absolute level.

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FIU GERMANY

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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 transaction reports pursuant to the Money Laundering Act (initial reports)

Banks

Credit banks Saving banks and state central banks Credit unions and co-operatives Deutsche Bundesbank and main branches Other Total Total Total Total

2,789 3,946 2,163 16 1,313 10,227 97 574 7

2,506 3,185 1,594 11 815 8,111 47 830 6

Insurance companies Financial service providers Financing companies

Government authorities (Sec. 14 and 16 of the Money Laundering Act) Total Parties required to Lawyers report (Sec. 2 (1) Legal advisers no. 7-12 of the MLA) Patent attorneys Notaries Auditors Certified accountants Tax consultants Agents in tax matters Real-estate brokers Casinos Persons trading in goods Total Other reports filed pursuant to the Money Laundering Act Gesamtsumme

6 10 ----4 ----3 ----11 33 61

6 16 ----5 1 --1 --1 8 12 44

Total

70 11,042

2 9,046

In the past years there has been a clear decrease in the number of suspicious transaction reports filed by financial service institutions (2008: 920, 2009: 830 and 2010: 574). 2.1.2 Possible causes for the increase in the number of suspicious transaction reports The reason stated for 2009 that the massive increase in the suspicious transaction reports was closely linked to the clear growth of financial agent 2 and/or phishing activities, is not valid for 2010. In 2009, of the 9,046 STRs, 2,394 reports were filed in connection with financial agent and/or phishing activities. Thus, the adjusted number of STRs, minus these reports, amounts to 6,652. For 2010, the adjusted number of reports is 7,956. After, from 2007 to 2009, the number of adjusted suspicious transaction reports had remained relatively constant, an increase by nearly 20% was reached from 2009 to 2010. (For further details regarding the financial agents phenomenon see 4.2.1). The following Graph 2 shows the adjusted number of suspicious transaction reports, excluding the financial agents phenomenon:

Graph 2:

Suspicious transaction reports filed pursuant to Section 11 of the MLA without the financial agents phenomenon
7,956

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8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2007 2008 2009
6,555 6,378 6,652

2010

In our opinion, this increase may be related to the discussions held after the FATF assessment (threshold of suspicion of Section 11 MLA). In the course of the discussions held in 2010 the FIU had once again pointed out that a suspicious transaction report always has to be filed when the reporting parties know, have the suspicion or have reasonable 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.

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

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2.1.3 Reports filed by the tax authorities pursuant to Section 31 b of the Fiscal Code Apart from the suspicious transaction reports filed pursuant to the MLA, the FIU received a total of 271 reports filed by the tax authorities pursuant to Section 31 b of the Fiscal Code. According to Section 31 b sentence 2 of the German Fiscal Code, revenue authorities shall without undue delay notify the competent law enforcement authorities with a copy to the FIU of facts that suggest that a crime pursuant to Section 261 of the Criminal Code or terrorist financing () has been or will be committed or attempted . As compared to 2009, the revenue authorities filed 23 more reports in the reporting year, which is an increase of about 9%. Thus, the downward trend observed in 2008 and 2009 has not continued, although the high level of the years 20042007 has not been reached again.

2.1.4 Reports pursuant to Section 14 (2) of the Money Laundering Act In 2010, a total of 3,085 reports were received by the FIU from the customs authorities in accordance with Section 14 (2) of the MLA. Compared to the 1,739 reports received in 2009, this constitutes an increase of approx. 77%. This is an indication that the competent authorities have intensified their controls. 2.1.5 Reports filed pursuant to the Iran Embargo Regulation3 In the reporting period, the FIU received 266 reports on the basis of the Iran Embargo Regulation. Compared to the 301 reports received in 2009, this constitutes a decrease of approx. 11%. The reasons for this decline have not been established.

Graph 3:
400

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

359

350 300

336

330

335

261

271 248

250 200 150 100 50 0 2003 2004 2005 2006 2007 2008
132

2009

2010

Council Regulation (EU) No. 961/2010 of 25 October 2010 on restrictive measures against Iran and repealing Regulation (EC) No. 423/2007, see also 7.4.

2.1.6 Number and nationality of individuals reported In the 11,313 suspicious transaction reports that were filed in total in 2010 pursuant to the Money Laundering Act and Section 31 b of the Fiscal Code, 22,208 persons were mentioned by name (2009: 15,543). This is an increase of approx. 42%. The main reason for this massive increase is the fact that the total number of reports received rose by over 20%. Another factor is the complexity of the suspicious transaction reports which further rose in 2010 and, besides the qualitative components of the facts reported, is also reflected in the number of persons named. Of the 22,208 persons reported, the nationality of 10,810 people was named. 139 different nationalities have been established. As in the previous years, German nationals (6,655 persons, approx. 61%) were by far the largest group.

Table 2:

Nationalities of the reported persons

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Nationality Total number of all persons Total number of nationalities reported Germany Turkey Romania Poland Russian Federation Latvia Italy Bulgaria France Iran China Lithuania Ukraine Other unclear / unknown

Number 2010 2009 22,208 10,810 6,655 593 295 281 275 254 184 158 135 131 127 88 80 1,554 11,398 15,543 9,301 5,866 450 142 218 292 91 134 126 58 114 132 82 115 1,481 6,242

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2.1.7 Corporate headquarters In the suspicious transaction reports pursuant to the MLA and the reports pursuant to Secton 31 b of the Fiscal Code, a total of 4,477 companies were mentioned in 2010 (2009: 3,531). This is an increase of 27% which can be explained by the higher total number of reports received and the 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.

2.1.8 Grounds for suspicion The factors mentioned as circumstances arousing suspicion by the reporting parties are summarized under the term grounds for suspicion by the FIU. For the 2010 reporting year, the grounds for suspicion fall into the following categories:

Table 3:

Headquarters of the companies reported

Corporate headquarters Total number off all companies Total number off all companies headquarters Germany Great Britain Switzerland Cyprus Russian Federation British Virgin Islands USA China Netherlands Austria Other unclear

Number 2010 2009 4,477 2,808 1,739 125 116 76 72 66 50 36 33 32 463 1,669 3,531 2,232 1,091 105 92 55 56 69 28 14 22 34 666 1,299

Table 4: Category

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

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Special hints / links to known cases

Document / certificate / identification

Company

Kind of business (how)

Business purpose (what)

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Table 4: Category

Grounds for suspicion indicated by the parties required to report (part 2) Ground for suspicion 2010 Account use Economic background Transactions Online banking Economic authorisation Transfers through uneconomic / indirect channels Other (account opening / keeping) Total Customer behaviour Other (product / customer) Total Criminal association / organisation Matches with listed persons Other (financing of terrorism) Total Gesamt 3,485 1,564 1,468 247 173 53 44 7,034 695 87 782 35 34 15 84 80 17,797 Number 2009 2,781 1,672 979 10 63 30 30 5,565 605 67 672 26 23 49 98 11 14,162

Account opening / account keeping

Product / customer

Financing of terrorism

No specific grounds for suspicion

The item transfer fraud in the table reflects the increase in the field of financial agents / phishing activities. Interesting 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.

2.2

Results of processing

Graph 4:

2.2.1 Status of report processing at the close of the reporting year Of the 11,042 suspicious transaction reports received in 2010, 36% of the cases had not yet been completed by the clearing offices by 31.12.2010. 4% of the clearing cases completed were transferred to the tax authorities, 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.

Results of processing by the money laundering clearing offices of the state criminal police offices
14%

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2% 38%

6%

36%

4%

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%)

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2.2.2 Connections to types of crime in cases transferred to other specialised investigation agencies In the cases transferred to other specialised investigation agencies in 2010, 7,911 connections to types of crime are mentioned.4 As in the years before, fraud constitutes the largest phenomenon, making up one third. This corresponds with the high number of reports referring to financial agent activities which as a rule are preceded by fraud. Compared to the previous years, there have been no significant changes in this connection.

Graph 5:

Connections to types of crime identified by clearing offices in cases transferred to other investigative agencies
1% 1% 1%

9%

6% 33%

25%

24%

Fraud (33%) Money laundering (24%) not indicated (25%) Tax offences (6%)

Other (9%) Document forgery (1%) Breach of trust (1%) Drug crimes (1%)

Multiple listings possible.

2.3

Summary of report volume

11,042 suspicious transaction reports pursuant to Section 11 of the Money Laundering Act were filed in the reporting year. This constitutes an absolute peak since the entering into force of the Money Laundering Act in 1993. Compared to the previous year, this is an increase of 22%. This increase is not only based on a further strong rise in reports referring to financial agent or phishing activities. The adjusted number of STRs without these reports also clearly increased in 2010. As before, the large majority of the reporting parties 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 in goods, continues to be at a very low absolute level in 2010. The by far largest part of the suspicious transaction reports filed was based on the suspicion of fraud. Thus, taken together, the reports filed pursuant to Section 11 of the MLA and those filed pursuant to Section 14 (2) of the MLA amount to 14,127 altogether.

It is noted that, basically, the increase in the facts reported is not only due to the reports filed in connection with financial agent or phishing activities the number of which has also very clearly risen. Rather, one of the reasons is believed to be a threshold of suspicion that is now correctly interpreted by the reporting parties, following a new awareness-raising process, so that their obligation to file a suspicious transaction report pursuant to the Money Laundering Act is now increasingly perceived. Further to their quantitative increase, it is noted that the previously very good quality of the suspicious transaction reports has even more improved. A further increase in the complexity of the facts reported has also been established.

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Follow-up responses by public prosecutors offices pursuant to Section 11 (8) of the Money Laundering Act

Pursuant to Section 11 (8) of the MLA, the competent public prosecutors office shall inform the Bundeskriminalamt Financial Intelligence Unit of the commencement of public legal proceedings and the outcome of the proceedings 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.

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3.1

Statistical analysis

In the 2010 reporting year, a total of 5,007 follow-up responses by public prosecutors offices pursuant to Section 11 (8) of the MLA were recorded and analysed by the FIU. In 2009, an increase in the number of follow-up responses by approx. 25% (978 responses) was established. In 2010, however, this increase was merely a little more than 3% (169 responses). The response reporting practice of the prosecutors offices has developed as follows since 2003: Table 5: Number of follow-up responses in relation to the number of suspicious transaction reports5 Number of follow-up responses 13 518 1,680 3,018 4,107 3,850 4,838 5,007 Number of Difference Quota STRs purin % suant to MLA 6,602 6,589 0.2 8,062 7,544 6 8,241 6,561 20 10,051 7,033 30 9,080 4,973 45 7,349 3,499 52 9,046 4,208 54 11,042 5,935 46

The above comparison of the follow-up responses with the suspicious transaction reports received by the FIU shows that the number of follow-up responses increased from 2009 (4,838) to 2010 (5,007), but the response quota dropped by 8%. One of the reasons for this development could be the high number of the still pending proceedings from 2010 whose judicial outcome will only be available in the years to come.

3.2

Analysis of content

3.2.1 Judgements, penalty orders, bills of indictment Of all follow-up responses received by public prosecutors offices in 2010 (5,007), a total of 418 (8.3%) contained judgements, penalty orders or bills of indictment. Another 79 follow-up responses were reports pursuant to the Directive on Reporting in Criminal Cases (MiStra) and applications for penalty orders which, in the following Table 6, were summarised under other follow-up responses. Table 6: Judgements, penalty orders and indictments forwarded Penalty Indictorders ments 138 42 143 82 262 96 Other ----79 Total 211 257 497

Year

2003 2004 2005 2006 2007 2008 2009 2010

Year Judgements 2008 31 2009 32 2010 60

A direct comparison between the suspicious transaction reports filed during the calendar year and the follow-up responses received by the FIU can only be made with reservations due to the fact that the followup responses may also refer to suspicious transaction reports filed in previous years. A trend comparison is, however, possible in our opinion since this distortion is probably largely evened out by the monitoring over several years.

Considering the 418 forwarded indictments / penalty orders / judgements under the aspect of predicate offences, it is noted that, in 336 cases (68 %), so-called financial agents have been indicted / sentenced. The charge in these cases was money laundering, mostly preceded by (computer) fraud.

Follow-up responses relating to investigations for suspected terrorist financing were not received in 2010. The following table shows the predicate offences mentioned in the indictments / penalty orders / judgements .

3.2.2 Dismissal orders Of the 5,007 follow-up responses received in total by the FIU from the public prosecutors offices, nearly 90% (4,510) of the cases are dismissal orders. Beyond the prosecutorial reasons for dismissal, these follow-up responses only seldom contained explanatory information or information of typological relevance. Moreover, it was often not possible to establish if the proceedings were dropped in relation to the suspicion of money laundering, but continued in relation to the predicate offence.

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Table 7:

Predicate offences mentioned in the judgements, penalty orders and bills of indictment Number 385 51 9 6 in % 69.75% 9.24% 1.63% 1.09%

Predicate offence Fraud offences of these, computer fraud 233 Document forgery Tax offences Drugs offences Withholding or embezzlement of wages/salaries Breach of trust Handling stolen goods Violation of the Pharmaceuticals Act Theft Misappropriation Fraudulent bankruptcy Cheque fraud Robbery Capital investment fraud Transfer fraud Not indicated Total

3.3

Conclusion

5 0.91% 4 0.72% 3 0.54% 3 0.54% 3 0.54% 2 0.36% 2 0.36% 1 0.18% 1 0.18% 1 0.18% 1 0.18% 75 13.59% 552 100.00%

In the 2010 reporting year, a slight increase in the absolute number of follow-up responses was established, but compared to the total number of suspicious transaction reports received, the response quota dropped by 8% to 46%. The predominant number of judgements reported in 2010 for money laundering were passed because of an activity as financial agent, mostly preceded by computer fraud.

Multiple listings possible.

ANNUAL REPORT 2010

FIU GERMANY

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Monitoring of suspicious transaction reports

According to Section 10 of the Money Laundering Act, it is the task of the FIU to analyse suspicious transaction reports and to regularly inform the parties obliged to report under this Act on typologies / methods of money laundering and terrorist financing as well as to identify the current trends 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 31 b of the Fiscal Code to permant intensive monitoring. Further to the previously mentioned FATF assessment, the monitoring of the reports received by the FIU has been expanded and intensified. Thus, the suspicious transaction reports were increasingly supplemented with information held by the FIU and forwarded to the competent authorities.

The distribution of these 194 cases in 2010 is as follows: 93 cases involving amounts of over 3 million euros each, 13 cases involving politically exposed persons, 9 cases involving media coverage, 5 cases involving otherwise exposed persons, and 74 other reasons

Graph 6:

Monitoring of suspicious transaction reports Noteworthy cases

5 13

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. 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 reasons (e.g., special modus operandi or exceptional nature of the commodity traded).

74

high transaction amount (93) note worthy case (74) media coverage (9) politically exposed (13) otherwise exposed (5)

4.2

Monitoring of trends

4.2.1 Financial agents A total of 3,086 reports (28% of all suspicious transaction reports pursuant to the MLA) with links to financial agent or phishing activities were received by the FIU in 2010. Compared to the previous year, this is an increase of about 29%. These 3,086 reports mark an absolute peak in this area. The development of the reports with links to financial agent or phishing activities since 2006 is shown in the following graph:

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Trend monitoring is carried out by the strategic sector of the FIU if the monitoring of all suspicious transaction reports reveals indications in respect of money laundering or terrorist financing phenomena that are of special relevance to analysis or investigation. Monitoring is initially carried out for a period of three months and is then subjected to a first assessment. If a further and more intensive monitoring of the trend appears necessary, this initial period of three months is extended. In 2010, four such trends were monitored. The monitoring concerns the below-mentioned phenomena with the following distribution of the 3,269 reports received in total in this connection:
Financial agents: Electronic payment systems: 500 Euro notes: CO2 emission allowances:

Graph 7:

Number of suspicious action reports involving financial agents

3,086 cases 94 cases 48 cases 41 cases

3,500
3,086

3,000 2,500 2,000 1,500 1,000 500 0 2006 2007 2008 2009 2010
265 971 2,525 2,394

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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 illustrated in the following graph.

Graph 8:

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

12,000 10,000 8,000 6,000 4,000

2,525 2,394 971 265 10,051 9,080 9,046 7,349

2,000 0 2006 2007

STRs

2008

2009

2010

Financial agent / phishing activities

The number of reports with links to financial agent or phishing activities has unfortunately increased, in spite of extensive awareness raising measures and efforts on the part of the security authorities and the reporting parties to reduce and contain this phenomenon. Thus, due to the strong increase in suspicious transaction reports involving the financial agents phenomenon, in June 2010, the FIU published an alert on the website of the Police Crime Prevention Programme of the Federation and the federal states (Programm Polizeiliche Kriminalprvention der Lnder und des Bundes) www.polizei-beratung.de/ themen-und-tipps/betrug/finanzagenten.html. This alert explicitly warns against dubious job offers and offers to

make additional money with which unknown enterprises search for financial agents. Instead of supposedly lucrative business, the financial agents face punishment for negligent money laundering as well as claims for compensation on the part of the victims. For this reason, the FIU requests all those obliged to report under the MLA to continue to raise the awareness of their customers/partners for this issue and to inform them, as they may deem appropriate, of the dangers involved and the above-mentioned Internet contents. After, in the previous years, suspicious transaction reports with links to financial agents were predominantly filed by financial transfer service providers, the major part of the

reports filed in 2010 comes from the big credit institutions. The financial agents recruited increasingly open accounts with these banks through which the illegal assets are then transferred to other accounts. A development can currently be identified that financial agents no longer withdraw the illegal funds in cash and then transfer them abroad via a financial transfer service provider, but transfer them to another interim account of a second financial agent. It has been established in the previous years that the vast majority of the predicate offences mentioned in the financial agents reports was in the field of online banking fraud. This phenomenon is still very often found. In the meantime, a clear increase has become apparent in predicate offences involving other offences of fraud, especially Internet or cheque fraud. The above-described manifestation in the field of phishing at a very high level and, in addition, the increase of the cases in other fields of crime can serve as an explanation for the rise in the total number of reports relating to this trend.

4.2.2 Electronic payment systems In 2010, the FIU received 94 suspicious transaction reports relating to the electronic payment systems phenomenon. The year before, 63 reports relating to this trend had been filed. This clear increase by nearly 50% confirms the prognosis of the 2009 Annual Report concerning a further increase in the reports relating to this phenomenon. However, compared to the total number of reports filed (11,042), these 94 suspicious transaction reports continue to represent a very small number in absolute terms. In spite of this low number, according to the FIU, the electronic payment systems phenomenon represents a high threat potential in the field of money laundering. For this reason, this phenomenon will be subjected to further intensive monitoring. At international level as well, the electronic payment systems phenomenon is given great attention. The FATF project New Payment Methods where Germany has been entrusted with the project management, is given as an example in this context.

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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.

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4.2.4 CO2 emission allowance trading The background of these activities were fraud offences in connection with turnover tax. CO2 emission allowances were traded by numerous companies in Europe across borders, circumventing their duty to pay turnover tax. In 2010, 41 suspicious transaction reports were filed in connection with the monitoring of this trend. In 2009, this number was 28. It must, however, be considered that the monitoring of this trend did not start before July 2009. Since 01.07.2010, due to legal adjustments, it is no longer possible to commit turnover tax fraud with CO2 emission allowances. The monitoring of this trend was thus stopped on 31.12.2010. The close monitoring of this phenomenon revealed, however, first indications of a shift from fraudulent CO2 emission allowance trading to the fraudulent trade in energy, raw materials or high-value electronic equipment. In this light, the trend is the subject of further intensive observation.

4.3

Results of targeted operational analysis

In the course of 2010, the analysis of the cases already conducted at a qualitatively high level was further intensified and expanded in many parts of the strategic sector of the FIU. Specifically, the close interaction between the strategic sector of the FIU and the operational sector on the one hand, and with the other police case officers at the BKA on the other hand has been considerably strengthened. In 2010, a total of 190 suspicious transaction reports were identified which, after a first analysis at the FIU, contained indications of possible terrorist financing. These reports were forwarded to the State Security Division at the BKA (Division ST) for further processing. In the year before, 98 suspicious transaction reports were forwarded to the competent section within the ST Division. This increase by over 90% constitutes 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 sections for assessment and checking of the relevance of their contents.

4.4

Typologies

5 5.1

National cooperation Public relations work

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The systematic monitoring of all suspicious transaction reports again showed a wide variety of typologies. From the FIUs perspective, the following two typologies identified in 2010 are especially worth mentioning:

4.4.1 Precious metals As early as 2008, the FIU had found first indications of a new typology gold separation plants and tax offences associated therewith.7 In 2009, a total of 69 reports were filed in this field. In 2010, this number rose to 394 reports. The public relations work done by the FIU in this field led to a clear increase by 325 reports (almost 475%). New (similar) typologies going beyond those so far known have not been identified.

In the light of the role of the FIU Germany as the central 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. In this context, the FIU makes a distinction between generally accessible information on the one hand, and addressee-specific public relations work on the other hand, which, for example, is intended exclusively for those obliged to report. As a police agency, the FIU also has the task of distributing its information in the fields of money laundering and terrorist financing on an internal police level.

5.1.1 Generally accessible information One important aspect of the public relations work done by the FIU is the information posted on the homepage of the Bundeskriminalamt (www.bka.de) on the issues of suppression of money laundering and suppression of the financing of terrorism. This website is continuously updated and all those interested can get a good insight into the status of the suppression of money laundering by reading, for example, the following material:
Annual reports of the FIU The FIU has posted all eight Annual Reports prepared so far (20022009) on its web page. Apart from the 2003 Annual Report, all reports are also made available in English.

4.4.2 Financial agents In 2010, 158 cases were reported in which financial agents forwarded funds obtained from offences in the field of Internet fraud. In 2009, merely 29 cases were reported. This example confirms the clear increases in financial agent activities in the field of other fraud offences (see 4.2.1). In 2009, 26 cases were reported in which financial agents forwarded the illegally obtained funds by means of electronic payment systems. In 2010, 44 cases with this modus operandi were reported. This is a manifestation of the increase in the number of these cases on a still very low absolute level, however.

See FIU Newsletter No. 8 of November 2009.

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Money Laundering Act (MLA) In addition to the German version, an English version has been posted which is a working translation meant to serve as an aid.8 Publications by the Financial Action Task Force (FATF) Some important publications by the FATF on the issue of suppression of money laundering and the financing of terrorism have been posted here. It is generally recommended to access the FATFs homepage directly at www.fatfgafi.org where additional publications can be found. In order to keep the Internet presentation of the FIU as updated and informative as possible, any suggestions for new contents are welcomed. Please see Appendix 1 for a graphic description of the structure and path of the Internet site.

5.1.2 Addressee-specific public relations work Special material has been posted on the password-secure section of the FIU website10 for those agencies that are obliged to cooperate under the Money Laundering Act or assist the FIU as a partner in the fight against money laundering. This includes, in particular:
FIU Newsletter With its Newsletter, the FIU keeps all parties required to report pursuant to the MLA and the criminal justice authorities updated about current developments and typologies in the field of the suppression of money laundering and terrorist financing. In 2010, the 9th Newsletter was published on the BKA homepage. With this publication, all relevant agencies in Germany were given an interim report, after three quarters of the year, on the most interesting quantitative and qualitative developments regarding suspicious transaction reports in Germany. In addition to the analysis of the sharp increase in case numbers, information was given on current trends (financial agents, use of electronic payment systems, use of 500 Euro notes) and typologies (assignment of contractual rights, gold vending machines11) . It is once again pointed out here that all agencies and institutions involved in the suppression of money laundering have the possibility to forward relevant contributions to the Newsletter to the FIU.

Crime Prevention The FIU also contributed to the Internet presentation of the Police Crime Prevention Programme of the Federation and the federal states (Programm Polizeiliche Kriminalprvention der Lnder und des Bundes): In June 2010, information was posted on www.polizei-beratung.de, describing the methods and consequences of the frequently found recruitment of financial agents by criminal offenders. This measure warns computer users against becoming involved in criminal activities under the guise of jobs offered by criminals. 9

10

The only legally authoritative version is, however, the version of the Money Laundering Act that has been published in the Bundesgesetzblatt (Federal Law Gazette). See also 4.2.1

11

The access data can be obtained by the authorised parties from the competent supervisory authorities. Proof must be furnished of the appointment as a money laundering officer. Such a machine offers the possibility to purchase gold in the form of bars and coins. Payment is made by inserting cash or a payment card into the machine.

Indicator paper This paper developed jointly by the state criminal police offices, the parties required to report pursuant to the MLA, and the FIU contains a catalogue of indicators which are to assist the parties required to report in recognizing cases of relevance to money laundering and the suspected financing of terrorism. Sample forms The forms Verdachtsanzeige nach 11 GwG (Suspicious transaction report pursuant to Section 11 of the Money Laundering Act) and Staatsanwaltschaftliche Rckmeldungen gem. 11 Abs. 8 GwG (Follow-up responses from public prosecutors offices pursuant to Section 11 (8) of the Money Laundering Act) are available to those who are required to report.

Plenary meeting of the Egmont Group in Cartagena (Columbia) Main course 2010 of the Middle European Police Academy Export control day of the Federal Office of Economics and Export Control Meeting of the supervisory authorities of the nonfinancial sector (Section 16 (2) no. 9 of the MLA) International seminar of the Deutsche Bundesbank on the suppression of money laundering Unfortunately, in 2010 as well, the FIU was not able to comply with all requests to make presentations or to take part in training measures.

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5.2

The Working Party of Banks and Chambers

5.1.3 Presentations / training measures The FIU also supplies information on its activities by means of presentations and training measures. Information can thus be disseminated to specific target groups. The number of presentations and the participation in training courses were kept at a high level in 2010. The FIU Germany was actively involved in a total of 35 events at national and international level. As in the years before, the circumstances, participants and framework conditions of the events were very heterogeneous. They ranged from training courses for law enforcement authorities to meetings of the parties required to report pursuant 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:

In 2010 as well, the FIU organised the annual meeting of the Working Party of Banks and Chambers. As in the previous years, the meeting was attended by experts of the Bundeskriminalamt, representatives of the state criminal police offices, the Customs Criminal Investigation Office, the bank associations, (professional) chambers, major German banks and financial service providers. For the first time, representatives were present from authorities which, pursuant to the MLA, are responsible for supervision of the so-called non-financial sector. After the presentation of figures and trends regarding suspicious transaction reports filed in the first three quarters of 2010, above all the following issues were presented and discussed:

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FATF assessment of Germany results / reactions / need for action Awareness-raising measures for the parties required to report in connection with the financing of terrorism (inter alia, threat investigations pursuant to Section 4a of the BKA Law in connection with Section 24 c of the Banking Act) Threshold of suspicion for reports pursuant to Section 11 of the MLA New payment systems The large number of participants at the meeting and the lively discussions again showed that the Working Party of Banks and Chambers is used and appreciated as a platform for the exchange of experience of all parties involved in the suppression of money laundering and terrorist financing. Provided there are enough relevant issues to discuss, the FIU Germany plans to organise this Working Party again in 2011.

5.3

Case collection

Pursuant to Section 10 (1) No. 5 of the MLA, the FIU () shall regularly inform the parties obliged to report on types 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 integrated into specific proceedings and financial investigations independent of specific proceedings. National and international sources of information are used.

The typology work of the case collection mainly relies on the following sources: Investigations with money laundering links that are handled in the German federal states, by the Federal Police or the Customs Criminal Investigation Office Information obtained from the operational sector of the FIU Information obtained from the assessment of the follow-up responses from public prosecutors offices pursuant to Section 11 (8) of the Money Laundering Act Evaluation of press reports and observation of open sources Work results of international bodies and their working groups, in this case especially the FATF and the Egmont Group In 2010, the gathering of relevant information mainly took 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 query was made. The assessment and processing of the data will be continued in 2011. The information contained in the case collection will be disseminated to those interested by means of the established FIU media.

6 6.1

International Cooperation Exchange of information with other FIUs

The FIU Germany is an important and central point of contact for the global information exchange between the 120 FIUs now organised within the Egmont Group.12 In 2010, information was exchanged with 80 different foreign FIUs on a total of 1,044 case-specific facts. This represents an increase of approximately 15% over the preceding year.

This steady increase in case numbers continued in 2010. Whereas the increase rates were rather moderate in 20042008, a significant rise can be observed in the last two years. A differentiation of the cases in 2010, sorted by requesting authority, produces the following picture: A total of 837 enquiries (previous year: 732, increase by 14%) were addressed to the FIU Germany by foreign FIUs. As a rule, these case-specific facts were disseminated within Germany to the state criminal police offices for information and/or gathering of supplementary information

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Graph 9:
1,200

Development of the case numbers of the FIU information exchange

1,044

1,000 800
657 744 773

906

718 606 482

600 400 200 0 2003

2004

2005

2006

2007

2008

2009

2010

12

See Appendix 2.

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available at regional level. Dissemination took place on demand of the requesting FIU or upon appropriate assessment of the FIU Germany after permission for the release of the data had been obtained from the originator. 207 enquiries were received by the FIU from German agencies for onward transmission of the respective facts to foreign FIUs (previous year: 174, increase by 19 %). In order to get a rough impression of the complexity of the cases mentioned in the FIU correspondence and to observe their development, statistical evaluations have been made of the parameters number of documents per case (12), number of natural persons mentioned (5) and number of legal entities mentioned (3). The average values per case shown in parantheses already indicate that extensive follow-up correspondence was exchanged and, as a rule, the information exchange referred to several persons and companies. This (statistical) evaluation does not include the investigations conducted by the FIU at the Bundeskriminalamt in 2010 pursuant to Section 4 (2) of the BKA Law on suspicion of money laundering. In these case complexes, investigations were conducted into several hundred natural persons and legal entities. The number of documents produced in this connection ascends well into the four-digit range (regarding these investigations, see also 6.3). As one of the few FIUs worldwide, the FIU Germany has the legal and factual possibilities to establish if a person or a company has a bank account or depository account at a credit institution in Germany. In 2010, such valuable information was forwarded to foreign FIUs in 97 cases.

The following table shows the distribution of enquiries received at the FIU Germany by country. Table 8: Requests for information addressed to the FIU Germany (Top 20)

2010 Germany Luxembourg Belgium Slovakia Switzerland Finland Liechtenstein France Hungary Bulgaria Great Britain Guernsey Netherlands Spain USA Cyprus Jersey Russia Poland Ukraine Other Total 207 133 102 57 53 33 29 24 24 21 20 19 19 19 18 17 16 16 14 13 190 1,044

2009 174 109 84 50 49 27 29 31 17 24 22 15 19 12 13 6 9 13 20 22 161 906

Prev. year +/ 33 24 18 7 4 6 0 7 7 3 2 4 0 7 5 11 7 3 6 9 29 138

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.

Compared to the previous years, the countries mentioned in the table above have more or less remained the same, i.e. the focuses can be described or explained with the criteria neighbouring state, financial centre or phishing cases.

6.3

Investigative successes

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6.2

International events / contacts

Some outstanding international events attended by members of the FIU Germany in 2010 are mentioned in the following: 18th plenary meeting of the Egmont Group in Cartagena (Columbia) An essential moment of the meeting, from the point of view of Germany, was the election of the Head of FIU Germany to one of the three European representatives in the Egmont Committee. Meetings of the Board of Partners and working meetings within the scope of the FIU.Net project In these events, Germany has contributed to the successful further development of this communication medium between European FIUs both at the management level of the project and at working level. Bilateral working meetings with various FIUs on operational cases and strategic issues Especially in the framework of the investigations conducted by the Bundeskriminalamt, it has often been necessary to hold operational working meetings with foreign FIUs or other foreign law enforcement authorities. 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

The Bundeskriminalamt with the FIU Germany as a police agency possessing competencies and expert knowledge in 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 mentioned as examples: Together with the tax investigation services and a Prosecutor Generals Office, an extensive investigation is being conducted on suspicion of tax evasion on a repetitive and gainful basis and (international) money laundering. According to the current state of the enquiries, the (tax) loss incurred amounts to at least 180 million Euros. Several hundred premises were searched in this investigative complex in 2010, four people were arrested, several legal assistance requests were made and assets in the three-digit million range were secured. According to a request for information received from a European FIU, a person who has links to Germany has considerable assets in his account in the foreign country whose legal origin is doubted. Investigations of the Bundeskriminalamt with the support of the FIU have revealed that the subject is under investigation in Germany for violations of the Narcotic Drugs Act and the Weapons Act. As a consequence, a large amount in the six-digit range has been secured from the foreign account following speedily initiated legal assistance measures. The person in question has meanwhile been sentenced to a long term of imprisonment.

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These examples and numerous other successful cases of international information exchange demonstrate the advantage of a police FIU located within a law enforcement authority. Due to the fact that FIU information can be searched against police databases, it is possible to identify links between cases and to take immediate police action. In 2010 as well, this resulted in considerable investigative successes in the fight against Organised Crime. It is generally noted that, in 2010, the information exchange with other FIUs involved more cases reported to the FIU Germany which had tax offences as a possible predicate offence to money laundering. A large part of the information forwarded was disseminated for investigative purposes with the consent of the foreign FIUs. This led to intensified cooperation with the German tax authorities.

7 7.1

Financing of terrorism Suspicious transaction reports filed pursuant to the MLA for suspected financing of terrorism

The following table shows the percentage of STRs filed pursuant to the MLA for suspected terrorist financing among the total amount of STRs filed by the reporting parties. Table 9: Suspicious transaction reports filed for suspected involvement in the financing of terrorism It appears from the table that the number of suspicious transaction reports filed pursuant to the MLA for suspected terrorist financing rose from 98 to 124. This corresponds to the increase in the total number of suspicious transaction reports filed pursuant to the MLA.

Table 9:

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

2010 Total number of suspicious transaction reports (STRs) filed pursuant to the Money Laundering Act of them, STRs checked by the BKAs State Security Division Percentage share of the total number of STRs

2009

2008

2007

2006

2005

11,042 470 4.3%

9,046 415 4.6%

7,349 281 3.8%

9,080 384 4.2%

10,051 376 3.7%

8,241 358 4.3%

STRs filed by the parties required to report for suspected financing of terrorism
Percentage share of the total number of STRs

124 1.1%

98 1.1%

65 0.9%

90 0.9%

59 0.6%

104 1.3%

An increasing number of suspicious transaction reports filed for suspected terrorist financing was noted at the end of the year 2010. This is believed to be due to the efforts made to raise public awareness for the threat posed by Islamist terrorism. However, the parties with reporting obligations obviously still have problems to identify cases of suspected terrorist financing merely by looking at customer profiles and the account management.
Suspicious transaction reports with possible list matches Of the 124 STRs filed for suspected financing of terrorism, 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.

Checks of STRs for possible links to the financing of terrorism Original jurisdiction for the handling of suspicious transaction reports lies with the specialised units at the state criminal police offices where all suspicious transactions reports are generally checked also for links to terrorist financing. Of the 11,042 suspicious transaction reports filed altogether in 2010, 470 were forwarded to the State Security Division of the Bundeskriminalamt because, after thorough examination by the competent clearing offices of the Federation and the states, possible links to politically motivated crime (PMC) could not be ruled out.

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Graph 10: Distribution of STRs filed for suspected terrorist financing

140 120 100

23 14

80 60

58

25 110 21 21 65 75 44

40 20 0
46 38

2005
Other terrorist financing

2006

2007
Possible list matches

2008

2009

2010

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Of the 470 suspicious transaction reports forwarded, a relevance to the field of PMC was initially thought to exist in 30 cases. Concrete indications of terrorist financing have been established in none of the cases. The investigations also did not result in any relevant information for the development of typologies of terrorist financing.
Investigative proceedings based on suspicious transaction reports In 2010, nine suspicious transaction reports led to the institution of investigative proceedings in the field of politically motivated crime.13 Final reports on the outcome of these proceedings have not yet been received. Case examples In the course of routine Internet searches, a credit institution found an appeal for donations with obviously Islamist background. A suspicious transaction report for suspected terrorist financing was filed pursuant to Section 11 of the MLA because this appeal for donations mentioned an account number of the credit institution. The account was blocked. Investigative proceedings have meanwhile been instituted against the account holder for suspected violation of Section 89a of the German Criminal Code (Establishing contacts for the purpose of committing a serious violent offence endangering the state). In another case, a suspicious transaction report was 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 subsequent analysis of the account transactions substantiated the suspicion that the customer transferred funds of the person charged in the investigation through his account.

7.2

FIU correspondence

During the reporting year, 837 enquiries were made to the FIU Germany by foreign FIUs. Of these, four enquiries mentioned suspected terrorist financing as the reason for making the enquiry. The suspicion has, however, not been substantiated in any of these four cases. A final assessment of these enquiries has not been possible in the vast majority of cases due to the lack of personal details concerning the person(s) in question.

7.3

Conclusion

The absolute number of cases generated from all suspicious transaction reports pursuant to the Money Laundering Act and enquiries made to the FIU Germany with possible links to PMC and/or terrorism is rather low. Still, this instrument of information gathering must continue to be regarded as one component in the overall fight against the phenomenon terrorist financing. Statements on classical typologies which are again and again requested from the parties required to report pursuant to the MLA can hardly be made in the field of terrorist financing. Information has been obtained on how terrorist financing was carried out in individual cases, but this has not resulted in any criteria for suspicion of a general nature.

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.

7.4

Measures against the Islamic Republic of Iran according to Council Regulation (EU) no. 961/2010

On 25.10.2010, Council Regulation (EU) no. 961/2010 repealed the previously valid Regulation (EC) no. 423/2007 in connection with Regulation (EC) no. 1100/2008. It regulates authorisation procedures for the transfer of funds from and to Iran. Accordingly, all transfers of funds through payment service providers by electronic means from and to Iranian persons, 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.

In the 2010 reporting year, 266 reports pursuant to Council Regulation (EC) no. 1110/2008 were forwarded to the FIU Germany and checked for links to PMC (2009: 301). These reports were passed on directly to the Customs Criminal Investigation Office. Of these 266 reports, 185 have so far been completed there. In two of these cases, it was recommended to perform audits pursuant to the Foreign Trade and Payments Act for the purpose of monitoring compliance with this Act. Links to proliferation have been established in none of the cases reported.

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Final conclusions and outlook

In the 2010 reporting year, the FIU Germany as the central office for suspicious transaction reports to counter money laundering and terrorist financing received a total of over 20,000 reports14 pursuant to the provisions of the Money Laundering Act and the Fiscal Code. Almost all figures received in nearly all areas considered were on the rise in some cases in the two-digit percentage range. Above all the number of suspicious transaction reports pursuant to Section 11 of the Money Laundering Act rose by 22 % and, thus, reached an absolute peak since the entering into force of the Money Laundering Act in 1993. Considering the reporting parties it has been found that the focus is still very strongly on the credit institutions. On the other hand, the percentage of some other parties required to report pursuant to the MLA, strong in terms of numbers, continues to be at a very low absolute level. Increasing activities of the supervisory authorities of the federal 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 improvement, 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.

As far as the suppression of the financing of terrorism is concerned, it is noted that with regard to the absolute case numbers it is obviously still very difficult for the reporting parties to generate suspicious cases. Also, classical typologies or suspicious profiles can be recognised to a very limited extent only by means of suspicious transaction reports in this area. Through the work of the FIU, the Bundeskriminalamt achieved considerable investigative successes in 2010 as well. It is above all the excellent cooperation with the tax investigation authorities that proved very effective and has a model function for the future. One of the main targets of the FIU for 2011 besides continuing close cooperation with its numerous cooperation partners is the further intensification of targeted operational analysis of the reports forwarded to the FIU, in order to be able to even better support other agencies that are also responsible for the national and international suppression of money laundering and terrorist financing.

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 Embargo Regulation.

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Appendices

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

Appendix 1: Internet presentation of the FIU Germany on the homepage of the BKA

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http://www.bka.de

Themen AZ

Deliktsbereiche

Geldwsche (FIU)

Impressum / Kontakt

Verffentlichungen

Links

offener Bereich

geschlossener Bereich

Jahresberichte

Newsletter

Geldwschegesetz

Anhaltspunktepapier

Berichte FATF / GAFI

Formulare

Postanschrift Bundeskriminalamt Referat SO 32 Zentralstelle fr Verdachtsanzeigen/ Financial Intelligence Unit (FIU) 65173 Wiesbaden Fax: +49 (0)611 55-45300

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Appendix 2: List of Egmont Group members (part 1)16 Country Afghanistan Albania Andorra Anguilla Antigua & Barbuda Argentina Armenia Aruba Australia Austria Bahamas Bahrain Barbados Belarus Belgium Belize Bermuda Bosnia & Herzegovina Brazil BVI Bulgaria Cameroon Canada Cayman Islands Chile Colombia Cook Islands Costa Rica Cte dIvoire Croatia Cyprus Czech Republic Denmark Dominica Egypt El Salvador Estonia
16

FIU-Name FinTRACA DBLKPP UPB MLRA ONDCP UIF FMC MOT-Aruba AUSTRAC A-FIU FIU AMLU FIU FIU CTIF-CFI FIU BPSFIU FID

Type Admin Admin Admin Admin Admin/Police Admin Admin Admin Admin Police Admin Police Admin Admin Admin Admin/Pol/Judicial Police Police

Location Central Bank Ministry of Finance Independent Independent Independent Ministry of Justice(Indep) Central Bank Ministry of Finance Independent Ministry of Internal Affairs Independent Anti-Economic Crimes Directorate Office of the Attorney General Independent Independent Police State Investigation and Protection Agency Ministry of Finance Financial Services Commission Ministry of Finance Independent Independent Atty General Independent Ministry of Finance Independent Presidential Office Independent Ministry of Finance Attorney Generals Office Ministry of Finance Public Prosecutors Office Independent Independent Attorney Generals Office Estonian National Police

COAF Admin Financial Investigation Agency Police FIA ANIF FINTRAC/CANAFE CAYFIN UAF UIAF CIFIU UAF CENTIF-CI AMLO MO.K.A.S. FAU-CR HVIDVASK FIU EMLCU UIF-El Salvador FIU Admin Admin Admin Admin/Police Admin Admin Admin Admin Admin Admin Judicial/Police Admin Judicial/Police Police Admin Admin Police

Siehe www.egmont.org Highlighted: FIUs that joined the Egmont Group in 2010.

Appendix 2: List of Egmont Group members (part 2) Country Fiji Finland France Georgia Germany Gibraltar Grenada Greece Guatemala Guernsey Honduras Hong Kong Hungary Iceland India Indonesia Ireland Isle of Man Israel Italy Japan Jersey Kyrgyz Korea (South) Latvia Lebanon Liechtenstein Lithuania Macau SAR, Ch. Luxembourg Macedonia Malawi Malaysia Malta Marshall Isles Mauritius Mexico FIU-Name Fiji-FIU RAP TRACFIN FMS FIU GCID GFIU FIU Committee/Art 7 IVE FIS UIF JFIU HFIU RLS FIU-IND PPATK (INTRAC) MLIU FCU-IOM IMPA UIF JAFIC FCU-Jersey FIS KoFIU KD SIC EFFI MDP prie VRM GIF CRF MLPD FIU Malawi FIU/UPW FIAU DFIU FIU UIF Type Admin Police Admin Admin Police Customs/Pol Police Admin Admin Customs/Pol Admin Customs/Pol Customs/Admin Police Admin Admin Police Customs/Pol Admin Admin Admin/Police Customs/Pol Admin Admin Admin Admin Admin Police Admin Judicial Admin Admin Admin Admin Admin Admin Admin Location Independent Police Ministry of Finance Independent Federal Criminal Police Office Independent Independent Independent Superintendency of Banks of Guatemala Indep. Service Authority National Commission of Banks and Insurance Police Headquarters National Icelandic Police Independent Independent An Garda Sigana Police Ministry of Justice Central Bank Natl Public Safety Commission/Natl Police Agency Police Independent Ministry of Finance/Economy Prosecutors Office Central Bank Ministry of Finance Ministry of the Interior Independent Prosecutors Office Ministry of Finance Independent Central Bank of Malaysia Independent Banking Commission Independent Ministry of Finance

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Highlighted: FIUs that joined the Egmont Group in 2010.

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Appendix 2: List of Egmont Group members (part 3) Country Moldova Monaco Mongolia Montenegro Netherlands NL Antilles New Zealand Nigeria Niue Norway Panama Paraguay Peru Philippines Poland Portugal Qatar Romania Russia San Marino Saudi Arabia Senegal Serbia Singapore Slovakia Slovenia South Africa Spain Sri Lanka St. Kitts & Nevis St. Lucia St. Vincent & the Grenadines Sweden Switzerland Syria Taiwan Thailand Turkey Turks & Caicos Ukraine FIU-Name SPCSB SICCFIN FIU-Mongolia APML MOT MOT-AN NZ Police NFIU FIU KOKRIM UAF-Panama UAF-Seprelad UIF AMCL GIIF UIF QFIU ONPCSB FMC FIU SAFIU CENTIF FCPML STRO OFiS FP OMLP FIC SEPBLAC FIU-Sri Lanka FIU FIA-St. Lucia FIU NFIS MROS CMLC MLPC AMLO MSK - FCIB FCU SDFM Type Police Admin Admin Admin Admin Admin Police Admin Admin Police/Judicial Admin Admin Admin Admin Admin Police Admin Admin Admin Admin Admin Admin Admin Police Police Admin Admin Admin Admin Admin Adm/Pol/Jud Admin Police Admin Admin Law Enforcement Police/Admin. Admin Adm/Pol/Pros Admin Location Centre Comb.Crimes & Corr. Ministry of Finance Central Bank of Mongolia Independent Ministry of Justice Ministry of Finance Police EFCC (Law Enforcement) Crown Law Office Police National Security Council Independent Independent Central Bank Ministry of Finance Police Central Bank Independent Independent Central Bank Independent Independent Independent Police Ministry of Interior Ministry of FInance Independent Central Bank Central Bank of Sri Lanka Independent Police Independent Police Federal Office of Police Ministry of Justice Independent Ministry of Finance Police Ministry of Finance

Highlighted: FIUs that joined the Egmont Group in 2010.

Appendix 2: List of Egmont Group members (part 4) Country United Arab Emirates United Kingdom United States Uruguay Vanuatu Venezuela FIU-Name AMLSCU SOCA/FIU FinCEN UIAF FIU UNIF Type Admin Police Admin Admin Admin Admin Location Central Bank Police Ministry of Finance Central Bank State Law Office Superintendancy of Banks

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Highlighted: FIUs that joined the Egmont Group in 2010.

ANNUAL REPORT 2010

FIU GERMANY

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