Germany may have a reputation as Europe's economic stalwart, but a new report says the country is at risk of becoming the region's money laundering capital.
A study by the non-profit group European Network on Debt and Development (Eurodad), says that despite recent revelations over corporate tax dodging, the EU still provides a "wide-range" of options for firms seeking tax loopholes and is failing to enforce transparency measures that would cut money laundering risks.
Eurodad now says there are concrete threats to developing a transparent and equitable tax system in Europe, and Germany is one of the main culprits.
While Denmark and Slovenia have increased transparency around company ownership, Eurodad says that similar efforts have been curtailed in Luxembourg and Germany, which have sanctioned use of shell companies, trusts, holdings and foundations that can help obscure the source of assets and cash.
Tove Ryding, a tax coordinator for Eurodad, told CNBC she wasn't surprised by Germany's ranking and money laundering risk, given the number of recent scandals involving German banks including Deutsche Bank, which was fined by South African anti-money laundering regulators in February, and saw investigations launched over alleged money laundering for Russian clients in June.
"There is a lack of transparency and it is possible to hide money in Germany, so it's not surprising we see these scandals. Even when there have been efforts at the E.U. level to introduce transparency, Germany has come out as an opponent," Ryding said.
Germany objected to the development of a centralized data bank of owners as part of an EU anti-money laundering directive proposed at the end of 2014, and opposed public access to the information, the report explains. That directive was later approved, but only members of the public who can prove a legitimate interest in the company's dealings can have access to the central register.
Ryding said the most important action German and Luxembourg could take would be to follow through on their promises.
"Not one single government says they want to help people to hide money. They always say we want to change the system, but they're saying one thing and doing something else," she said.
The spokesperson for Germany's finance ministry was not immediately available to comment when contacted by CNBC.