Anyone in Germany conducting business in the area of banking, financial services, investments, insurance, payment services and e-money must have written authorisation from BaFin to do so – no ifs and buts. Companies offering such services on the German market without authorisation must expect BaFin to conduct investigations into these unauthorised activities and hold the companies accountable for their actions. To clarify cases, BaFin may search business and residential premises and seize evidence. Specially trained staff from BaFin’s Directorate IF are sent all over Germany to carry out these searches.

In an interview with BaFinJournal, a BaFin staff member, who wishes to remain anonymous, explains what can take place during such a search and who is involved and describes how some searches can continue into the early hours of the morning.

BaFin’s investigations into unauthorised business activities may include searching business and residential premises. What’s the difference between a search and an inspection, given that both are possible?

As a financial supervisory authority, BaFin can issue orders to carry out inspections. We either conduct these inspections ourselves or entrust Deutsche Bundesbank with the task. We normally order inspections if we expect that the company will be cooperative.

If we assume that this will not be the case, the best course of action is to order a search. Before we may begin a search of offices and private premises, we need a judicial order.

We’re all familiar with this from TV crime series: if need be, we may use force to gain access to the premises and, for example, have locked cabinets or safes opened. And we may enforce access to IT systems. We may also search people. In a case of imminent danger, BaFin may conduct the search even without a judicial order.

So does that mean breaking down a door if necessary?

Admittedly, that doesn’t happen that often. We mostly begin by ringing the company’s doorbell or we enter the premises through the front door. If nobody is there or nobody is willing to open the door, we first look to see if there’s some other way in. Or we try to reach somebody by phone or ask neighbours or the caretaker if they might be able to open the door for us. Finally, there’s always the good old locksmith who’ll open the door. If the persons concerned prevent us from entering by refusing to unlock the doors or by bolting them, we also have the possibility to confiscate the door keys. And if the criminals are in the process of destroying evidence, we may also resort to using a crowbar to force entry. We’ve even been known to climb through windows. But one thing is for certain: we do not go home until our mission is accomplished.

What kinds of people or companies do you search?

The spectrum is really quite broad. There are those, for example, who get involved without actually intending to. In other words, they didn’t realise that they were engaging in activities that required authorisation. We write to them; if they don’t respond, we then assume that they’re refusing to give us any information. Despite their obligation to do so. That’s why we’ll look them up personally. These people are usually so taken aback when they see us in the doorway that they’re willing to cooperate from then on.

And then there are those who are not actually conducting unauthorised business activities themselves but are aiding others in efforts to do so – for example, by allowing them to use their address. They, too, ignore our enquiries and are then mostly taken by complete surprise when we turn up. Many of them have never even heard of BaFin.

But then there are those old acquaintances that we’ve known for decades. We have to look them up every now and then because they’re the kind of people that will never learn. When it comes to cyber fraud or unauthorised money remittance business, we sometimes even find ourselves in the realm of organised gang crime.

Does BaFin conduct the searches with its own staff members?

Yes, we always use our own staff for searches. But the state police (Landespolizei) or the federal police (Bundespolizei) are always there too, supporting us. This is in the interests of our own safety – and because the police are allowed to use physical force, if necessary. If need be, they can even use weapons. That’s something we’re not allowed to do.

When does the police intervene?

For example, if in the course of a search we don’t want someone to run away before we’ve had the chance to establish their identity. The police can prevent an escape, if necessary.
They can also intervene if there is trouble during a search. It’s not uncommon for the people concerned to object to our presence. If that’s the case, we give them a detailed explanation as to why we’re carrying out the search and that we’re allowed to do so. If they continue to object, we tell them that the police may arrest them for the duration of the search. In other words, the police always remain in the immediate vicinity of the people concerned and can use direct force to prevent them from disrupting the search. With very few exceptions, the mere threat that these measures will be applied is sufficient to ensure an undisrupted search.

How many staff members are involved in a search?

That depends first and foremost on the size of the property, but also on the number of people we expect to encounter there. Needless to say, we’ll need far fewer colleagues to search a two-roomed apartment than a large office suite. But roughly speaking: at least two BaFin staff members, two police officers and, if necessary, some colleagues from the Bundesbank. If a large family home is to be searched, it can be double that number, and we’ll bring in a far higher number if we need to search very large office buildings.

Do you sometimes search several buildings at the same time?

Yes, that can also happen – and then you’ve already got 30 to 40 people involved in the search: from BaFin, the Bundesbank and the police, and sometimes also from the German customs and tax investigation authorities. In cases where we want to carry out really big searches involving a large number of buildings, for example, or if we expect the parties involved to put up a show of resistance, we’ll even be accompanied by mobile squads of federal and state police. Once we had more than 150 police officers deployed under our direction. But searches of that size are rare – and involve a great deal of planning and coordination. After all, it’s important to ensure that the searches all start at the same time, often across state borders. And of course everything needs to be kept confidential.

How long does a search last?

That also depends on the property. If it’s a small property, we might be finished within an hour; a large building would naturally take longer. Ten to twelve hours are even possible.

If we have to interrupt a search, we’ll need to carry out a great deal of organisational work. For example, we have to make sure that no other people can enter the property. We can also arrange, if necessary, to have buildings sealed. Because if the person concerned manages to gain access to the premises after we’ve left, it’s highly unlikely that we’ll find anything of relevance the day after. That’s why it makes more sense to continue for as long as necessary until the search is finished.

And a search is only finished once everything that we want to take with us has been labelled, entered into lists and packaged. And that also can take one to two hours.

What exactly is it that you’re after?

It’s evidence that we’re looking for. In other words, things that confirm – or refute – our suspicion. So a search is not a one-way street, and we make sure we go at it with an open mind.

We search all rooms, even kitchens and bathrooms. If it’s a house, for example, we’ll search everything from the cellar to the loft, all outside buildings such as garages and garden sheds, as well as vehicles and persons.

Can you give us some examples of the evidence you’re looking for?

Some examples are contractual documents, customer lists or files, account documents, e-mails, etc. In the past, evidence consisted of mountains of paper. There was often enough to fill numerous removal boxes. That’s changed now, and nowadays we have to try to save the necessary information on servers and in the cloud.

Do you sometimes also find objects outside the realm of economic crime?

Yes, every now and then. We’ve found all sorts of things: weapons and drugs, for example. And symbols of unconstitutional organisations. Things like this we hand over directly to the police officers present, who then launch their own investigations.

Thank you for the interview!