The topic of money laundering is dealt with comprehensively in the recently published Federal Situation Report on Organized Crime 2023 and is a central element in the context of criminal activities. In Germany, money laundering plays a significant role in the context of organized crime, with law enforcement authorities in particular facing major challenges in tracing the financial flows and proving the criminal origin of the funds.</p
Meaning of money laundering in organized crime
In 2023, money laundering activities were detected in 32.9% of organized crime proceedings (OC proceedings), which represents a slight increase compared to the previous year. A total of 278 cases of money laundering activities were registered in Germany. A significant proportion of the investigations focused on drug trafficking and smuggling as well as criminal activities in the business world. This underlines how deeply money laundering is interwoven into various forms of criminal activity.
The complexity of the methods used to carry out money laundering is particularly striking. Third parties who are not part of the criminal organization are often involved to conceal the origin of the funds. Other typical methods include cash deposits, bank transfers, the use of financial agents, and the use of cryptocurrencies. The latter are becoming increasingly important and make it even more difficult for investigating authorities to track the illegal financial flows.
Types of money laundering and investments
The distribution of money laundering methods shows that cash continues to be the preferred method for concealing illegal income. In 2023, 99.3 million euros were laundered in cash, followed by 23.9 million euros transferred by bank transfer. The involvement of third parties, financial agents, and so-called hawala banking (an informal financial system that operates largely outside the regular banking system) also plays a role.
Much of the laundered money is invested in legal economic sectors. The OC groups invest their illegal profits mainly in commercial goods (96.9 million euros) and real estate (58 million euros). The Financial Intelligence Unit (FIU) has identified the real estate sector as a focus for money laundering activities since 2019.
Challenges in the prosecution of money laundering
One of the most immense challenges in the fight against money laundering is tracing illegal financial flows. In particular, the exchange of cash and movable property often takes place without documentation, which makes it difficult for law enforcement authorities to gather evidence.
The use of modern technologies such as cryptocurrencies also makes investigative work considerably more difficult. Despite the increasing use of cryptocurrencies, the authorities continue to focus on traditional methods such as cash and bank transfers.
The volumes generated by money laundering activities are considerable. In 2023, money laundering activities amounting to around 166 million euros were detected in Germany. However, this sum only provides a rough overview, as it relates to cases detected by law enforcement authorities. It is assumed that the number of unreported cases is considerably higher, as many money laundering activities remain undetected.
International dimension and countermeasures
Many of the criminal organizations operating in Germany also operate across borders, which makes it even more difficult to track financial flows. International cooperation and the exchange of information between law enforcement authorities are therefore crucial to effectively combat money laundering.
The authorities in Germany are increasingly relying on financial investigations to track down and seize illegal funds. This is done as part of asset recovery measures, in which criminal profits are confiscated to deprive the perpetrators of their economic basis.
Despite these measures, money laundering remains one of the greatest challenges in the fight against organized crime, as the perpetrators are constantly developing new methods to conceal their illegal profits.