Luis Esteban Kyburg is accused of leading an Argentinian naval unit between 1976 and 1983 that was allegedly involved in torturing and killing abducted political opponents of the dictatorship.
Some 30,000 people were “disappeared” in the “dirty war” waged by Argentina's last military dictatorship against suspected left-wing political critics.
Argentinian judicial authorities filed an extradition request for Kyburg in 2015, the daily said.
But German authorities have rejected the demand because Kyburg is a German citizen, and therefore cannot be extradited to face trial elsewhere, the daily added.
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Prosecutors in Berlin were not immediately available for comment when reached by AFP.
Kyburg himself told Bild that he was “waiting here. Court in Germany, not in Argentina. I'm waiting. Innocent. Calmly.”
The European Center for Constitutional and Human Rights urged German courts to take action.
Kyburg's “German citizenship must not shield him from prosecution,” warned Wolfgang Kaleck, human rights lawyer and ECCHR General Secretary.