Austria is a regionally important financial center. Important shares of banking markets in Southeast, Central, and Eastern Europe are controlled by Austria. Unfortunately, financial institutions can also conduct money laundering activities in Austria. These activities carried out by money laundering are generally due to fraud, corruption, arms smuggling, tax evasion, and human trafficking. Also in Austria, drug trafficking, theft, and fraud are the main crimes.
When we look at Austria's economy, it is closely comparable to other EU economies with its developed market economy, high living standards, and skilled labor. Austria's economy is generally dependent on a solid industrial sector, a large service sector, as well as a developed but small agricultural sector. When we look at the financial position of Austria, it can be said that although it has been positive compared to other euro area countries, it also faces various external risks, such as unexpectedly weak world economic growth that threatens the export market. In addition, there is currently no national sanctions against Austria.
Overview of Money Laundering in Austria
In Austria, money laundering is defined as the concealment of illegal sources of income derived from certain criminal activities (eg fraud, smuggling, human trafficking). For this reason, crimes such as money laundering and terrorist financing are strictly punishable in Austria. There are laws and regulations in Austria to anti-money laundering activities. Financial institutions or gaming and gambling ınstutions that are considered to pose a particularly high risk must comply with these regulations.
Casinos and gambling are legal in Austria except in some cases. Casinos and financial institutions are the anticipated potential targets for money laundering activities. Therefore, there are regulatory laws for casinos as well, and these laws include AML / CFT provisions. Apart from this, in Austria, there are regular bank transfers, money transfers, and informal or non-formal remittance systems. The institutions and systems that carry out these transactions are also regulated in Austria. In addition, Austria is not an offshore target for illegal funds and there is no free trade zone, so this can be considered a factor that makes money laundering difficult to take place in Austria.
Financial Action Task Force (FATF) Status of Austria
FATF has country evaluations and these country evaluations are prepared with the help of the World Bank and the International Monetary Fund. This evaluation is made not only to FATF member countries but also to non-member countries. In this evaluation, the compliance of countries with FATF standards is generally evaluated. FATF conducted its first review for Austria in 2015/2016 and this review was published in September 2016. FATF's latest Follow-up Report & Technical Compliance Re-Rating for Austria was published in 2018. According to this review, Austria is not on the FATF List of Countries with strategic AML deficiencies. In addition, 18 of the Austrian FATF 40 recommendations were largely compliant, while 18 were compliant.
Anti-Money Laundering Regulators and Regulations in Austria
In Austria, authorities such as the Federal Ministry of Justice, the Federal Ministry of Finance, the Financial Market Board, the Austrian National Bank have regulations on the institutions deemed necessary. Apart from that, FATF is also represented in Austria as money laundering regulators.
In addition to the laws of the local regulators, Austria must also comply with the AML directives of the European Union. Since Austria did not fully comply with the national laws of the 4th Anti-Money Laundering Directive, it was sent to the Court of Justice of the European Union by the European Union with a request. In addition to the AML directives of the European Union, there are some laws drafted by the Austrian regulators, including rules for the prevention of money laundering. For example:
- Lawyers' Act
- Insurance Supervision Act
- Banking Act
- Gambling Act
- Trade Act
- Code on Notaries Public
- Stock Exchange Act
- E-Money Act
- Payment Services Act
- Securities Supervision Act
- Investment Funds Act
AML Obligations in Austria
Many regulators and regulations that apply in Austria undoubtedly exist to prevent money laundering activities. Existing laws also have some important obligations, and institutions that fail to comply with these obligations are punished by the regulators. In Austria, like financial institutions, it is very important to take Customer Due Diligence and Know Your Customer measures to prevent anonymized transactions and to prevent possible money laundering. In this way, customers, employees, or partners can be known who they really are, and risks can be identified and evaluated. This is how procedures for identifying customers in Austria should take place.
- Before establishing a permanent business relationship with a financial institution
- When a transaction with a value of 15,000 Euros or more is executed
- If the amount paid or deposited is 15,000 EUR or more
- If there is any suspicion of money laundering and terrorist financing
- If there are doubts about previously obtained identity data
- If the customer is a minor or legal person
In such cases, it is necessary to determine the identity of the customer, determine the risks, and take the necessary measures. In addition, any identified money laundering activities must be reported by the officials and reported to the Austrian Federal Ministry of the Interior.