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Austria Places Emphasis on Risk Assessment in Finance Sector
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In an effort to combat money laundering and terrorist financing, Austria has reinforced its commitment to risk assessment in the finance sector. The country’s financial institutions are now required to identify potential risks and take proactive measures to prevent illegal activities.
Background
Money laundering is defined as the concealment of income from criminal activities, while terrorist financing refers to providing assets for the perpetration of a terrorist act. Both offenses carry severe penalties, according to Section 165 of the Austrian Criminal Code.
The Financial Markets AML Act
The Financial Markets AML Act, which came into effect in January 2017, consolidates provisions on preventing the use of financial systems for money laundering and terrorist financing. The new law aims to ensure uniform application of anti-money laundering (AML) and counter-terrorism financing (CFT) obligations, making it easier for the Financial Market Authority to supervise compliance.
Customer Identification
In Austria, customers must identify themselves in certain circumstances, including:
- Establishing a permanent business relationship with a financial institution
- Performing transactions exceeding EUR 15,000
Identification can be done using official photo ID, and additional documentation may be required for minors, legal entities, and trust relationships.
Reporting Suspicious Activity
Suspicious activity must be reported to the Austrian Federal Ministry of the Interior’s money laundering unit.
EU Influence
The EU has played a significant role in shaping Austria’s approach to risk assessment. The 4th Anti-Money Laundering Directive, published in 2015, set a deadline for member states to implement its provisions by June 2017. The directive requires financial institutions and non-financial entities to identify high-risk third countries with strategic deficiencies.
FATF Assessment
Austria was assessed by the Financial Action Task Force (FATF) in 2015-2016, which evaluated the country’s compliance with international standards. The assessment report highlighted areas for improvement, leading to Austria being placed in the Enhanced Follow-up Process.
National Risk Assessment
In response, Austria conducted a National Risk Assessment in 2021, identifying risks across various sectors and providing recommendations for prevention and mitigation. The assessment was carried out in accordance with FATF requirements and the 5th Anti-Money Laundering Directive.
Transparency and Cooperation
The publication of statistics on anti-money laundering and counter-terrorism financing efforts is also mandatory under EU regulations. Austria’s consolidated review of its statistics, as required by Article 44 para. 3 of the 4th Anti-Money Laundering Directive, highlights the country’s commitment to transparency and cooperation in combating financial crime.
Global Standards
As a member of the FATF, Austria has committed to establishing globally uniform standards for combating money laundering and terrorist financing. The organization’s 40 Recommendations have been revised regularly and have become an established international standard.
Conclusion
Austria’s efforts to strengthen its risk assessment framework demonstrate its dedication to preventing illegal activities and protecting the financial system. As a key player in the global fight against financial crime, Austria’s approach serves as a model for other countries to follow.