Financial Crime World

Risk Assessment for Financial Crimes in Austria Reveals Mixed Results

A team of assessors from the International Monetary Fund (IMF) has conducted an assessment of Austria’s implementation of anti-money laundering and counter-terrorist financing standards, revealing a mixed bag of strengths and weaknesses.

Crime Level and Risks

According to the report, Austria’s crime level is among the lowest in European Union member states, with authorities considering its exposure to money laundering and terrorism financing risks as limited. However, due to its geographical location and historical ties with Central, Eastern, and Southeastern Europe countries, Austria may be used by foreign criminal organizations as a transit point for drugs and other trafficking, as well as a destination for criminal funds attracted by its reputation for political stability, banking secrecy, and attractive tax regime.

Anti-Money Laundering and Counter-Terrorist Financing System

The report praised Austria’s comprehensive anti-money laundering and counter-terrorist financing system, supported by well-developed federal administrative and supervisory bodies, and active professional organizations. However, it noted that:

  • The country’s criminalization of money laundering is generally in line with FATF standards, but lacks conviction rates for money laundering, low legal penalties, and low amounts confiscated.
  • Austria’s criminal provisions for terrorism financing do not cover the full range of activities covered by the FATF standard.

Supervisory System for Financial Institutions

The supervisory system for financial institutions was deemed sound and efficient, but:

  • Licensing requirements and sanctions need to be strengthened.
  • Additional resources should be allocated to supervisory bodies.

Austrian Financial Investigation Unit (A-FIU)

The A-FIU was praised as an effective police unit, but noted that it does not fulfill the suspicious transaction report analysis and dissemination functions of a full-featured financial intelligence unit.

Legal provisions and jurisprudence providing gateways for authorities to obtain data protected by banking secrecy were highlighted. However:

  • Restrictive conditions on public prosecutors’ requests may slow down reporting.
  • The registration system was found to be generally well-developed, but access to beneficial ownership data for some non-profit organizations, legal arrangements, and legal persons is hindered.

Key Recommendations

To address these deficiencies, key recommendations include:

  • Conducting a money laundering and terrorism financing risk assessment
  • Aligning criminalization with FATF standards
  • Widening customer due diligence obligations
  • Easing legal requirements for authorities’ access to information
  • Extending the A-FIU’s functions
  • Broadening suspicious transaction report provisions
  • Strengthening licensing requirements and sanctions for financial institutions
  • Ensuring transparency of beneficial ownership data

Contact Information

For further information, please contact the FATF Secretariat at:

+33 1 45 24 90 90 (phone) +33 1 44 30 61 37 (fax) contact@fatf-gafi.org (email)