Financial Crime World

Austria Cracks Down on Money Laundering: Financial Crime Definitions and Regulations in the Economically Robust EU Country

Austria’s Significant Role in European Banking Markets

As a prominent financial hub in Europe, Austria plays a significant role in controlling banking markets in southeastern, central, and eastern Europe. With a developed market economy, high living standards, and a skilled labor force, Austria boasts a solid industrial sector, a large service sector, and a diminutive agricultural sector. Economically speaking, Austria enjoys a robust economy, often compared favorably to other European Union (EU) members. However, despite its strengths, Austria is not immune to the threat of financial crimes, particularly money laundering.

Money Laundering in Austria: Criminal Activities and Threats

Money laundering is a serious issue in Austria and is defined as concealing illegal income derived from criminal activities such as fraud, smuggling, trafficking, corruption, arms smuggling, tax evasion, and human trafficking. Austria’s economy, often compared to other EU members, is not without external risks. For instance, world economic downturns could negatively impact Austria’s export-reliant economy.

Regulating Financial Crimes in Austria

To combat money laundering and terrorist financing activities, Austria has legislation and regulations in place. The gambling industry, a potential target for illicit activities, is generally legal in Austria, subject to specific regulatory laws. In its most recent review in 2018, the Financial Action Task Force (FATF) evaluated Austria and did not find any strategic AML deficiencies. Austria was also deemed compliant with 18 of the FATF’s 40 Recommendations.

Regulators and Laws

The Austrian government, through various ministries and industry bodies, implements regulations addressing institutions at risk of money laundering. Austria must adhere to both its local regulators’ rules and EU anti-money laundering directives. Some domestic laws include:

  1. Lawyers’ Act
  2. Insurance Supervision Act
  3. Banking Act
  4. Gambling Act
  5. Trade Act
  6. Code on Notaries Public
  7. Stock Exchange Act
  8. E-Money Act
  9. Payment Services Act
  10. Securities Supervision Act
  11. Investment Funds Act

These regulations and acts aim to prevent money laundering through various means, such as implementing Customer Due Diligence (CDD) and Know Your Customer (KYC) processes.

Reporting Suspicious Transactions

Austria places great emphasis on Suspicious Activity Reports (SARs) procedures. Financial institutions are required to submit SARs in specific situations, including:

  1. Before establishing a permanent business relationship with a financial institution
  2. When a transaction with a value of €15,000 or more is executed
  3. When an amount paid or deposited equals €15,000 or more
  4. If there is a suspicion of money laundering and terrorist financing
  5. If there are doubts about previously obtained identity data
  6. For transactions involving a minor or an illegal person

In each of these cases, the identity of the customer must be determined, the associated risks assessed, and appropriate measures taken. Any identified money laundering activities must be reported to the relevant authorities and the Austrian Federal Ministry of the Interior.

Combating Money Laundering: Solutions for Austria

Complying with Austria’s financial crime regulations can be daunting for businesses. Sanction Scanner, with its innovative tools, strives to provide a solution for Austria-based companies. Adopting Sanction Scanner’s services can provide invaluable assistance in navigating the complexities of Austria’s financial crime regulations.

Appendix

Austria

Austria is a landlocked alpine country in Central Europe with an area of 85,611 square kilometers (32,976 sq mi). It has an estimated population of 9 million, and its capital is Vienna.

The Financial Action Task Force (FATF)

The FATF is an international organization founded in 1989 to develop policies to combat money laundering and terrorist financing. It works in partnership with other organizations to implement these policies globally. FATF is not a regulatory agency, nor does it have the power to levy fines or penalties, but it does set the standards by which these activities are measured.

Lawyers’ Act

The Lawyers’ Act (Rechtsanwaltsgesetz) outlines the professional and ethical aspects of practicing law in Austria.

Insurance Supervision Act

The Insurance Supervision Act (Versicherungsaufsichtsgesetz) regulates the insurance industry in Austria from a supervisory perspective.

Banking Act

The Banking Act (Bankgesetz) governs the banking sector in Austria.

Gambling Act

The Gambling Act (Glücksspielgesetz) regulates gambling activities within Austria.

Trade Act

The Trade Act (Gewerbegesetz) regulates trade-related activities within Austria.

Code on Notaries Public

The Code on Notaries Public (Notariatsordnung) outlines the roles, responsibilities, and duties of notaries public in Austria.

Stock Exchange Act

The Stock Exchange Act (Börsengesetz) regulates the stock exchange and securities trading in Austria.

E-Money Act

The E-Money Act (Elektronengeldgesetz) deals with electronic money institutions and their electronic money transactions.

Payment Services Act

The Payment Services Act (Zahlungsdienstgesetz) regulates payment services within Austria.

Securities Supervision Act

The Securities Supervision Act (Wertpapieraufsichtsgesetz) oversees the issuance and trading of securities in Austria.

Investment Funds Act

The Investment Funds Act (Capitalanlagegesetz) regulates the organization, distribution, and sale of investment funds in Austria.

Austrian Federal Ministry of the Interior

The Austrian Federal Ministry of the Interior is a government ministry responsible for matters related to the interior, security, and the police sector.