Financial Crime World

Austria’s Efforts to Combat Financing of Terrorism Praised, but Room for Improvement

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Vienna, Austria - The International Monetary Fund (IMF) has recently assessed Austria’s efforts in combating the financing of terrorism (CFT) and money laundering (ML), and found that the country has made significant strides in this area. However, there are still areas where improvement is needed.

Comprehensive System in Place

Austria has a comprehensive system in place to combat ML/FT, supported by well-developed federal administrative and supervisory bodies, as well as active professional organizations. The country’s criminalization of money laundering is generally in line with international standards set by the Financial Action Task Force (FATF), and its legal framework provides for a wide range of confiscation and provisional measures.

Strengths

  • Austria has implemented strict regulations for financial institutions and designated non-financial businesses and professions (DNFBPs)
  • The country’s geographical location and historical ties with Central Eastern and Southern Europe countries make it a potential transit point for drugs and other trafficking, as well as a destination for criminal money
  • Austrian authorities have been praised for their support and cooperation during the assessment mission

Weaknesses

  • Austria’s exposure to money laundering and terrorist financing risks is limited due to its low crime rate
  • The country may be used as a transit point for drugs and other trafficking, as well as a destination for criminal money

Recommendations

To further strengthen its AML/CFT regime, Austria was recommended to:

  • Improve customer due diligence procedures
  • Enhance reporting of suspicious transactions
  • Increase cooperation between law enforcement agencies
  • Consider implementing measures to prevent the misuse of companies and trusts

Key Findings

The assessment team found that:

  • Austria’s crime rate is among the lowest in EU Member States
  • The country’s exposure to money laundering and terrorist financing risks is limited, but it may be used as a transit point for drugs and other trafficking, as well as a destination for criminal money
  • Austria has a comprehensive AML/CFT system in place

Assessment Team

The assessment team consisted of:

  • Alain Védrenne-Lacombe (LEG, team leader)
  • Nadine Schwarz, Giuseppe Lombardo, Emmanuel Mathias (LEG)
  • Helen Hatton (LEG expert, Deputy Director General, Jersey Financial Services Commission)

Note: The report was published in September 2008.