Financial Crime World

Austria’s Financial System Exposed to Money Laundering and Terrorist Financing Risks

Vulnerabilities Identified by FATF Report

VIENNA, AUSTRIA - The Financial Action Task Force (FATF) has identified Austria’s financial system as vulnerable to money laundering and terrorist financing risks. According to the report, Austria’s highly developed and robust financial market poses challenges for authorities in combating these crimes.

Complexity of Austria’s Financial Market

  • Assets totaling approximately 355% of GDP
  • Dominated by banks, which hold 75% of total financial sector assets

Main Predicate Crimes and Risks

  • Theft
  • Drug trafficking
  • Fraud
  • Human trafficking/migrant smuggling (perceived to be high-risk but with limited ML-related knowledge)

Organized Crime Groups and Money Laundering Activities

  • Italian and Eastern European organized crime groups active in Austria
  • Country used as a hub for money laundering and terrorist financing activities

Limitations of Financial Intelligence Unit (FIU)

  • Lack of analytical capabilities
  • Legal constraints preventing strategic analysis to support operational needs
  • “Protocol” system does not enable cross-matching of suspicious transaction reports (STRs) or data-mining to find trends and patterns across STRs

National AML/CFT Policy and Cooperation Mechanisms

  • No national AML/CFT policy in place
  • Risks only taken into account individually by certain agencies
  • Domestic cooperation mechanisms do not result in the development and implementation of policies and activities coordinated in a systematic manner

FATF Recommendations for Improvement

  • Strengthen anti-money laundering and counter-terrorist financing measures to address identified risks
  • Improve financial intelligence capabilities, including analytical tools and human resources
  • Implement necessary reforms and improvements by June 2023

Consequences of Non-Compliance

  • Failure to implement recommended reforms may result in Austria being placed on the FATF’s list of countries that pose a high-risk for money laundering and terrorist financing.