Financial Crime World

Austria’s Battle Against Money Laundering and Terrorist Financing: An Overview of Legal Frameworks and Regulatory Measures

Austria, like many other countries, has taken a strict approach against money laundering and terrorist financing. This article provides an overview of the legal frameworks and regulatory measures in place in Austria to combat these crimes.

Crime of Money Laundering and Terrorist Financing

Money laundering and terrorist financing pose significant threats to international peace and security. Austrian law criminalizes these activities under the Austrian Criminal Code (StGB) in sections 165 and 278d, respectively.

  • Money Laundering: Concealing the illicit origins of proceeds from criminal activities
  • Terrorist Financing: Providing assets, legal or otherwise, for terrorist acts

Legislation in Austria

The Financial Markets Anti-Money Laundering Act (FMA) consolidates regulations for preventing money laundering and terrorist financing in the financial sector.

  • Financial Markets Anti-Money Laundering Act (FMA): Passed in response to the 4th Anti-Money Laundering Directive (4AMLD)
  • Financial Market Authority (FMA): Responsible for application and supervision of AML/CTF obligations

Customer Due Diligence (CDD) Measures

All financial institutions must comply with CDD measures:

  1. Identify clients before establishing business relationships
  2. Identify clients before making transactions above €15,000
  3. Identify clients before depositing/withdrawing €15,000 or more
  4. Identify clients whenever there are suspicions of money laundering or terrorist financing

Identification typically includes:

  • Official ID documents
  • Proof of legal entity status
  • Appropriate representation documents

EU Regulations

The EU sets regulations for member states to combat money laundering and terrorist financing, which must be transposed into national law:

4th Anti-Money Laundering Directive (4AMLD)

  • Transposed into Austrian law through the Financial Markets AML Act and the Beneficial Owners Registry Act
  • Provisions also found in the Austrian Trade Act (GewO), Gambling Act (GSpG), and Codes of Professional Conduct

5th Anti-Money Laundering Directive (5AMLD)

Strengthens CDD measures and regulations on the beneficial ownership of companies.

Regulation (EU) 2015/847

Requires that all transfers of funds between EU countries be accompanied by the payer and payee’s specific information to allow for tracking and prevention.

International Standards

The Financial Action Task Force (FATF) plays a critical role in combating money laundering and terrorist financing through its globally recognized standards.

  • Financial Action Task Force (FATF): Founded in 1989
  • Mandate: Expanded in 2008 to include combating weapons of mass destruction (WMD) proliferation financing
  • Reports and Recommendations: Forty Recommendations serve as an international benchmark for AML/CTF efforts

FATF Country Assessments

Country compliance with FATF standards is evaluated through FATF country assessments.

  • Austria: Assessed in 2015/2016
  • Results: Relevant recommendations for improvement found on the FATF website
  • Current Status: Undergoing an Enhanced Follow-up Process (EFP) with the publication of Enhanced Follow-up Reports.