## 1. The crime level in Austria is among the lowest in European Union (EU) Member States, and ## Source details **Canonical URL:** [1. The crime level in Austria is among the lowest in European Union (EU) Member States, and](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2009/_cr09299.pdf) ## Other formats - [Markdown version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2009/_cr09299.pdf.md) - [Structured JSON version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2009/_cr09299.pdf.json) --- ### Overview and risk environment - The crime level in Austria is among the lowest in European Union (EU) Member States, and the authorities consider that the country’s exposure to money laundering (ML) and financing of terrorism (FT) risks is limited. - Austria’s geographical location and historical ties with Central, Eastern and Southeastern Europe (CESE) countries mean it may be used by foreign criminal organizations as a transit point for drugs and other trafficking, and as a destination for criminal money, attracted by its reputation for political stability, tradition of banking secrecy, and attractive tax regime. - Authorities have designed and are implementing a comprehensive AML/CFT system, supported by well-developed federal administrative and supervisory bodies, and active professional organizations. - Transposition of the Third EU AML Directive resulted in a large overhaul, expansion and strengthening of the Austrian AML/CFT regime which now covers the broadest range of financial activities and designated non-financial businesses and professions (DNFBPs), except certain casinos. Some provisions must be brought more closely into line with the FATF standards, and more time is needed before all requirements are fully implemented. ### Key deficiencies and challenges - Low number of convictions for ML, low legal penalties and low amounts confiscated raise questions about overall effectiveness. - Criminal provisions for FT largely consistent with the 1999 United Nations (UN) Terrorist Financing Convention but do not cover the full range of activities covered by the FATF standard. - Austrian Financial Investigation Unit (A-FIU) is an effective police unit but does not fulfill STR analysis and dissemination functions of an FIU; A-FIU is not responsible for FT cases (BVT handles FT). - Possible disclosure of information to the defendant, pursuant to the criminal procedure, may contribute to low reporting levels. - Requests by public prosecutors for data protected by banking secrecy are subject to restrictive conditions that financial institutions and legal professions may exploit to decline to supply information. - Access to beneficial ownership data of some non-profit organizations (NPOs), legal arrangements (Treuhand) and some legal persons, notably foundations and companies issuing bearer shares, is hindered. - Deficiencies in the domestic legal framework slow down the provision of mutual legal assistance. ### Legal systems and related institutional measures - Criminalization of ML closely follows the Vienna and Palermo Conventions: offense extends to any type of property, regardless of its value, that directly or indirectly represents the proceeds of crime, and irrespective of the place where the predicate offense was committed. - Predicate offenses include all serious offenses under Austrian criminal law, covering all categories designated by the FATF, and a wide range of misdemeanors, with the exception of counterfeiting and piracy of products. - It was not established that the non-criminalization of self-laundering is supported by fundamental principles according to the FATF standard. - Liability of natural persons is broader than required by the Conventions; general criminal liability has been enlarged to include legal persons and entities for all penal offenses. - FT criminalization is consistent with the 1999 UN Terrorist Financing Convention and addresses all activities without considering place of commission, but needs extension to include financing of terrorist organizations and individual terrorists, regardless of the use of the funds. - Specialized prosecutorial units for financial crime exist; investigations generally conducted by A-FIU for ML and Bundesamt für Verfassungsschutz und Terrorismusbekämpfung (BVT) for FT. - Few convictions for ML compared to convictions for predicate offenses (notably drug-related offenses); there were no convictions for FT between 2004 and 2007. - Legislation provides for a wide range of confiscation and provisional measures applying to property laundered or constituting proceeds of ML/FT and other predicate offenses; mechanisms apply to all property items in Austria and property of corresponding value. - Legal regime for non-conviction based forfeiture of assets held by a criminal organization or a terrorist group is extensive but has not been applied yet. - Measures to freeze funds or other assets of terrorists are mainly implemented by European Council Regulations and Council Common Positions enacted through Official Announcements of the Austrian National Bank (OeNB); difficulties exist in freezing non-financial assets and private sector guidance on freezing obligations is needed. - Pursuant to relevant laws and regulations, financial institutions and DNFBPs report suspicious activities to the A-FIU. STRs are dealt with in the same way as criminal complaints; the A-FIU conducts criminal investigations with full investigative powers and access to information but does not perform analysis and dissemination functions of an FIU. - Banking secrecy provisions are strict, but legal provisions and jurisprudence provide gateways for authorities to access protected information. Requests by the A-FIU acting on STRs are usually complied with, but court orders requested by the office of public prosecution are sometimes rejected by financial institutions if requests do not provide substantive, material and adequate evidence that legal conditions for disclosure are met, delaying access to information. ### Preventive measures — financial institutions - Following transposition of the Third EU ML Directive, additional or new AML/CFT obligations incorporated into Austrian law relate to customer identification, the definition of beneficial ownership, identification and monitoring of politically exposed persons (PEPs) and cross-border correspondent banks. - New provisions came into force on January 1, 2008; effective implementation of some new provisions could not be fully established and some operational circulars are still pending. - CDD requirements have been expanded and cover all customers and beneficial owners, whether natural or legal persons. Framework should be expanded by removing three exemptions, requiring additional CDD for beneficiaries of some smaller savings deposit accounts, and broadening definition of a PEP. - Revised legislation introduces a risk-based approach to CDD modeled on the provisions of the EU Directive; it requires financial institutions to conduct a risk-analysis of their business, apply risk-based CDD, and take appropriate measures to address higher risk situations. - Authorities should consider conducting a ML/FT risk assessment to establish whether additional legal provisions are required to mitigate risks specific to Austria, such as bearer shares, personal asset holding vehicles, and private banking. - Enhanced due diligence is required for non-face-to-face business, cross-border correspondent banking, and business with PEPs; nature and scope of monitoring measures are not defined and are left to financial institutions’ discretion. - Financial institutions should be specifically required to examine the background and purpose of transactions they view as unusual and record findings in writing. - Most STRs originate from “credit institutions”, especially money transfer services. - In November 2008, the authorities initiated an action plan for better protecting the anonymity of reporting entities and persons filing STRs. - Compliance management and internal audit obligations exist for most categories of financial institutions but need better focus; legal provisions should set out compliance officer’s seniority, independence and right to access CDD data and transaction records. - Financial Market Authority (FMA) has overall responsibility for regulation, supervision and enforcement; since January 2008, the OeNB conducts offsite monitoring and onsite examinations of banks. - Concerns about adequacy of licensing process exist, especially assessment of significant or controlling interests when capital is in form of bearer shares; fit and proper tests should be applied to senior managers and all supervisory board members. - FMA and OeNB capacity needs strengthening; additional resources required to increase number of onsite examinations and cover all areas of ML/FT risk. - Sanctioning regime does not appear sufficiently proportionate and dissuasive; application of sanctions should be extended to all members of supervisory boards and senior management. - Local district authorities supervise domestic financial institutions that carry out limited specialized financial business; legal provisions for licensing, business, supervision and sanctioning of these institutions are not sufficiently adapted to their activity and ML/FT risks. - The increasing number of examinations and meetings with senior management demonstrate steps to ensure closer AML/CFT supervision; both authorities rely on external auditors to confirm AML/CFT controls are in place and operational. ### Preventive measures — designated non-financial businesses and professions (DNFBPs) - Further to the Third EU AML Directive, all DNFBPs are covered in laws and regulations; coverage goes beyond the FATF standard to include all types of dealers, auctioneers and accounting professions. - Preventive measures applicable to DNFBPs need to be expanded and better tailored to their specificities. CDD requirements should be defined for all casinos operating in Austria, including internet casinos. - Legal ambiguities in coverage of transactions performed by notaries, lawyers and accountants should be removed. - Requirements for enhanced monitoring of higher risk categories or transactions called for by the FATF should be extended to the sector. - Implementation generally needs strengthening, especially for trust and company service providers (TCSPs); new or revised guidelines need to be issued. - Heightened professional secrecy provisions for lawyers, notaries and accountants may contribute to the low level of reporting of suspicious transactions. - Supervisory system mostly lacks resources and expertise; sanctioning regime appears proportionate and dissuasive for lawyers and notaries but needs development for other professions. - Measures to reduce reliance on cash appear insufficient, considering the important quantity of large denomination banknotes issued by the OeNB. ### Legal persons and arrangements & non-profit organizations - Austria mainly relies on a central registration of all types of legal persons, including foundations; access to relevant ownership information is hampered by limited requirements to register changes in ownership, possibility for companies to issue bearer shares, and option for private foundations to record beneficiaries’ names in non-public appendixes to founding deeds. - The Treuhand is a very common feature of the Austrian economy. A partial registration system is in place limited to financial assets and is mandatory only for some trust service providers (lawyers and notaries). - There are no measures to ensure the transparency of foreign trusts operated in Austria. - Obligations for NPOs to ascertain and maintain information about their ownership structure and transactions should be expanded. ### National and international cooperation - Mechanisms for domestic cooperation and coordination are institutionalized and embedded in the Federal Constitution; various policy and operational fora established under the lead of the Ministry of Finance enable national competent authorities to exchange information on AML/CFT issues and coordinate activities. - Austria has enacted legislation encompassing key requirements of international conventions regarding mutual legal assistance, signed several bilateral treaties with neighboring states, and shortened domestic procedures to improve processing of information requests. - Austria may provide a range of measures of mutual legal assistance in AML/CFT investigations, prosecutions and related proceedings initiated by other countries; legal regime for foreign requests for confiscation is comprehensive. - Extradition framework is not entirely in line with the FATF standard and its effectiveness was not established. - Provision of mutual legal assistance suffers from shortcomings: strict requirements for lifting bank secrecy and extensive scope of legal privilege slow down provision of mutual legal assistance. ### Key recommendations (excerpt) - Conduct a ML/FT risk assessment. - Align the criminalization of ML/FT with the standards. - Widen the scope of customer due diligence (CDD) obligations. - Ease legal requirements for authorities to have access to information held by financial institutions and legal professions. - Extend the functions of the A-FIU to analysis and dissemination. - Broaden the STR provisions. - Strengthen licensing requirements and available sanctions for financial institutions. - Align preventive measures for DNFBPs with the FATF standards. - Ensure adequate transparency of beneficial ownership of legal persons and legal arrangements. --- ### Summary Table of Observance and Key Recommendations (selected headings 1–6) - Notation of compliance levels used: - Compliant (C) - Largely compliant (LC) - Partially compliant (PC) - Non-compliant (NC) - Not applicable (NA) 1. Legal System and Related Institutional Measures - Criminalization of Money Laundering - R.1: LC - R.2: LC - Key recommendations: - Criminalize self-laundering. - Make counterfeiting and piracy of products predicate offense to ML. - Undertake actions to alter evidentiary expectations so prosecutors need not prove a specific offence or perpetrator to show property is proceeds. - Increase penalties for natural persons under Article 165 of the Criminal Code and minimum sanctions for legal persons. - Criminalization of Terrorist Financing - SR.II: PC - Recommendations: - Extend criminalization to financing of terrorist organizations and individual terrorists, regardless of use of funds. - Extend criminalization to range of activities in Article 2, paragraph 5 (b) & (c) of the 1999 Convention. - Increase FT penalties. - Confiscation, freezing, and seizing of proceeds of crime - R.3: PC - Recommendations: - Ease authorities’ access to information held by financial institutions and lawyers/notaries. - Consider changes to make Article 20b of the Criminal Code more readily enforceable against property at disposal of criminal organizations. - Use forfeiture more frequently; maintain precise statistics on amounts restrained and confiscated. - Freezing of funds used for terrorist financing - SR.III: PC - Recommendations: - Set up procedures to ensure freezing without delay of assets other than funds (immovable goods, companies, vehicles). - Modify OeNB regulations under the Foreign Exchange Act to allow freezing of funds/assets held by EU-internals as set forth by SR.III. - Provide private sector guidance on freezing obligations. - The Financial Intelligence Unit and its functions - R.26: PC - Recommendations: - Establish an FIU as national center for receiving, analyzing and disseminating STRs and other relevant information. - Empower FIU to analyze STRs prior to police/criminal investigations and obtain additional information from reporting parties. - Law enforcement, prosecution and other competent authorities - R.27: C - R.28: LC - Recommendation: - Ease requirements for law enforcement authorities to obtain access to information held by financial institutions and by lawyers and notaries. - Cross Border Declaration or disclosure - SR IX: PC - Recommendations: - Subject transportation of cash or bearer negotiable instruments into/out of municipalities of Jungholz and Mittelberg to declaration/disclosure obligations. - Develop a computerized database for declaration/disclosure information to target cash couriers and fight ML/FT. - Assess risk and develop a strategy for cash/bearer instrument transport into/out of Jungholz and Mittelberg. - Enhance cooperation between customs and the A-FIU and develop reporting system for cross-border transportation cases. 2. Preventive Measures: Financial Institutions (selected) - Customer due diligence, including enhanced or reduced measures - R.5: PC; R.6: LC; R.7: LC; R.8: LC - Recommendations (selected): - Treat holders of savings documents for savings deposit accounts with balance lower than EUR 15,000 and not registered in the customer’s name as beneficial owners subject to identification/verification. - Extend CDD to credit and financial institutions established in EU member countries. - Remove blanket exemption for fiduciary accounts below EUR 15,000. - Conduct ML/FT risk assessment and require enhanced due diligence for higher risk relationships/transactions. - Issue guidelines on extent of CDD measures on a risk sensitive basis. - Require enhanced due diligence when a customer becomes a PEP after business relationship establishment. - Apply specified Banking Act measures to all correspondent banking, including EEA Member States. - Require policies to prevent misuse of technological developments in ML/FT schemes. - Consider requiring banks to remove fee charged for closing a savings deposit account. - Financial institution secrecy or confidentiality - R.4: PC - Recommendation: - Lighten conditions in Article 116 of the Code of Criminal Procedure to facilitate police access to banking records. - Monitoring of transactions and relationships - R.11: PC; R.21: PC - Recommendation: - Require examination of background and purpose of complex, unusual large transactions or patterns without apparent economic or lawful purpose, and attention to relationships with persons from countries insufficiently applying FATF Recommendations. - Suspicious transaction reports and other reporting - R.13: PC; R.14: LC; R.19: C; R.25: LC; SR.IV: LC - Recommendations (selected): - Extend reporting requirement to cover all suspicions that funds are proceeds of criminal activity, not only suspicions transaction serves ML purpose. - Apply STR obligation to proceeds of piracy and counterfeiting; require professions under the Trade Act (Gewerbeordnung; GewO) to report in self-laundering cases. - Clarify reporting obligations include suspicions of terrorist financing. - Increase effectiveness of reporting system and mitigate self-limitation due to criminal procedure rules. - Apply STR protection only in case of good faith for insurance intermediaries. - Prohibit financial institution from referring a customer to police when transaction suspended following an STR. - Require reporting of transactions suspected related to terrorism even without link to a terrorist act. - Update FMA guidance on reporting. - Internal controls, compliance, audit and foreign branches - R.15: PC; R.22: LC - Recommendations: - Establish compliance officer as a management position. - Give AML/CFT compliance officer right to access CDD data, transaction records and relevant information. - Integrate AML/CFT compliance into internal audit work, notably for securities and insurance businesses. - Supervisory and oversight system - R.17: PC; R.23: PC; R.25: LC; R.29: LC - Recommendations (selected): - Make sanctions proportionate and dissuasive; extend sanctions to supervisory board and senior management. - Ensure bearer-share capital does not undermine assessment of significant or controlling interest. - Increase onsite examinations and supervisory oversight of branches and subsidiaries abroad. - Carry out fit and proper tests of senior managers and supervisory board members. - Provide resources, training and support for AML/CFT oversight. 3. Preventive Measures: DNFBPs (selected) - Customer due diligence and record-keeping - R.12: PC - Casinos: - Extend legal framework to cover all casinos, refine CDD, require transaction records; include Internet casinos. - Real estate agents, dealers in precious stones and metals, and TCSPs: - Review and implement CDD requirements; focus on TCSPs. - Lawyers, notaries and accountants: - Refine/clarify CDD scope; review legal privilege to avoid hampering CDD; require attention to complex or unusual transactions; issue guidance. - Suspicious transaction reporting - R.16: PC - Recommendations: - Align reporting grounds with the standard. - Require Internet casinos to report STRs and specify AML/CFT internal controls. - Extend legal obligation to report STRs and internal controls to all businesses/professions conducting TCSP activities. - Consider reviewing broad legal professional secrecy for notaries and lawyers. - Regulation, supervision, monitoring, and sanctions - R.24: PC; R.25: LC - Recommendations: - Empower Ministry of Finance to supervise internet casinos and control beneficial owners of significant/controlling interest in casinos. - Monitor compliance for accountants and TCSP sector; give trade authorities technical and budgetary resources. - Review fines under the GewO and establish tailored guidelines and information feedback to DNFBPs. - Other DNFBPs - R.20: LC - Recommendation: - Take additional measures to reduce reliance on cash and large denomination banknotes. 4. Legal Persons and Arrangements & Nonprofit Organizations (selected) - Legal Persons – Access to beneficial ownership and control information - R.33: PC - Recommendations: - Make private foundations’ beneficial ownership more transparent, e.g., require appendix/supplementary declaration be available in the Commercial Register. - Establish legal mechanism to trade shares in the Stock exchange in nominative form or mandate “de-materialization”. - Conduct assessment of ML risk associated with bearer shares. - Legal Arrangements – Access to beneficial ownership and control information - R.34: PC - Recommendations: - Ensure transparency where Treuhand property includes assets other than funds; ensure transparency where Treuhänder is not a lawyer/notary/registered TSP; address funds held under Treuhand by lawyers between EUR 15,000 and EUR 40,000. - Ensure transparency over foreign trusts operated from Austria. - Implement AML/CFT oversight for TSPs to obtain, verify and record Treuhand beneficial ownership. - Develop means for oversight bodies to share information with national/foreign counterparts. - Nonprofit organizations - SR.VIII: PC - Recommendations: - Require NPOs operating as private foundations to make identity of persons who own, control or direct activities publicly available. - Strengthen record-keeping of domestic and international transactions to verify funds are spent consistent with purposes. - Strengthen outreach to the NPO sector. 5. National and International Cooperation (selected) - National cooperation and coordination - R.31: C (fully observed) - The Conventions and UN Special Resolutions - R.35: LC; SR.I: PC - Recommendations (selected): - Criminalize self-laundering. - Soften requirements for authorities to access information subject to secrecy. - Extend criminalization to activities in Article 2, Paragraph 5 (b) and (c) of the 1999 Convention. - Set up procedures to ensure freezing without delay of assets other than funds. - Modify OeNB regulations under the Foreign Exchange Act for EU-internal terrorists to enable freezing in all instances set forth by UNSCR 1373 and SR.III. - Mutual Legal Assistance - R.36: PC; R.37: LC; R.38: PC; SR.V: PC - Recommendations: - Ensure timely, constructive and effective MLA. - Conclude arrangements for coordinating seizing and confiscation with other countries. - Remove banking secrecy requirements that slow cooperation. - Ensure legal privilege scope does not slow cooperation. - Consider sharing confiscated assets with countries other than EU members and the United States. - Extradition - R.39: LC; R.37: LC; SR.V: PC - Recommendation: - Improve overall effectiveness of the extradition framework. - Other Forms of Cooperation - R.40: LC; SR.V: PC - Recommendations: - Grant A-FIU sufficient resources to respond to foreign FIU requests timely. - Enable A-FIU to exchange information on FT. - Establish provisions allowing competent authorities to conduct inquiries on behalf of securities supervisors from third countries. 6. Other Issues - Resources & Statistics - R.30: LC - R.32: PC - Recommendations: - Improve statistical apparatus. - Provide additional resources for the police and supervisory bodies. *Source: IMF assessment chapter contained in the provided PDF content.* ### 1. The crime level in Austria is among the lowest in European Union (EU) Member States, and ### _cr09299 - 1. The crime level in Austria is among the lowest in European Union (EU) Member States, and ### Overview and risk environment - The crime level in Austria is among the lowest in European Union (EU) Member States, and the authorities consider that the country’s exposure to money laundering (ML) and financing of terrorism (FT) risks is limited. - Austria’s geographical location and historical ties with Central, Eastern and Southeastern Europe (CESE) countries mean it may be used by foreign criminal organizations as a transit point for drugs and other trafficking, and as a destination for criminal money, attracted by its reputation for political stability, tradition of banking secrecy, and attractive tax regime. - The authorities have designed and are implementing a comprehensive AML/CFT system, supported by well-developed federal administrative and supervisory bodies, and active professional organizations. - Transposition of the Third EU AML Directive resulted in a large overhaul, expansion and strengthening of the Austrian AML/CFT regime which now covers the broadest range of financial activities and designated non-financial businesses and professions (DNFBPs), except certain casinos. Some provisions must be brought more closely into line with the FATF standards, and more time is needed before all requirements are fully implemented. ### Key deficiencies and challenges - Low number of convictions for ML, low legal penalties and low amounts confiscated raise questions about overall effectiveness of the system. - Criminal provisions for FT are largely consistent with the 1999 United Nations (UN) Terrorist Financing Convention but do not cover the full range of activities covered by the FATF standard. - The Austrian Financial Investigation Unit (A-FIU) is an effective police unit, but it does not fulfill the suspicious transaction report (STR) analysis and dissemination functions of an FIU; the A-FIU is not responsible for FT cases (BVT handles FT). - Possible disclosure of information to the defendant, pursuant to the criminal procedure, may contribute to the overall low level of reporting. - Requests by public prosecutors for data protected by banking secrecy are subject to restrictive conditions that financial institutions and legal professions may exploit to decline to supply information. - Access to beneficial ownership data of some non-profit organizations (NPOs), legal arrangements (Treuhand) and some legal persons, notably foundations and companies issuing bearer shares, is hindered. - Deficiencies in the domestic legal framework slow down the provision of mutual legal assistance. ### Legal systems and related institutional measures - Criminalization of ML closely follows the Vienna and Palermo Conventions: offense extends to any type of property, regardless of its value, that directly or indirectly represents the proceeds of crime, and irrespective of the place where the predicate offense was committed. - Predicate offenses include all serious offenses under Austrian criminal law, covering all categories designated by the FATF, and a wide range of misdemeanors, with the exception of counterfeiting and piracy of products. - It was not established that the non-criminalization of self-laundering is supported by fundamental principles according to the FATF standard. - Liability of natural persons is broader than required by the Conventions; general criminal liability has been enlarged to include legal persons and entities for all penal offenses. - FT criminalization is consistent with the 1999 UN Terrorist Financing Convention and addresses all activities without considering place of commission, but needs extension to include financing of terrorist organizations and individual terrorists, regardless of the use of the funds. - Specialized prosecutorial units for financial crime exist; investigations generally conducted by A-FIU for ML and Bundesamt für Verfassungsschutz und Terrorismusbekämpfung (BVT) for FT. - Few convictions for ML compared to convictions for predicate offenses (notably drug-related offenses); there were no convictions for FT between 2004 and 2007. - Legislation provides for a wide range of confiscation and provisional measures applying to property laundered or constituting proceeds of ML/FT and other predicate offenses; mechanisms apply to all property items in Austria and property of corresponding value. - Legal regime for non-conviction based forfeiture of assets held by a criminal organization or a terrorist group is extensive but has not been applied yet. - Measures to freeze funds or other assets of terrorists are mainly implemented by European Council Regulations and Council Common Positions enacted through Official Announcements of the Austrian National Bank (OeNB); difficulties exist in freezing non-financial assets and private sector guidance on freezing obligations is needed. - Pursuant to relevant laws and regulations, financial institutions and DNFBPs report suspicious activities to the A-FIU. STRs are dealt with in the same way as criminal complaints; the A-FIU conducts criminal investigations with full investigative powers and access to information but does not perform analysis and dissemination functions of an FIU. - Banking secrecy provisions are strict, but legal provisions and jurisprudence provide gateways for authorities to access protected information. Requests by the A-FIU acting on STRs are usually complied with, but court orders requested by the office of public prosecution are sometimes rejected by financial institutions if requests do not provide substantive, material and adequate evidence that legal conditions for disclosure are met, delaying access to information. ### Preventive measures — financial institutions - Following transposition of the Third EU ML Directive, additional or new AML/CFT obligations incorporated into Austrian law relate to customer identification, the definition of beneficial ownership, identification and monitoring of politically exposed persons (PEPs) and cross-border correspondent banks. - New provisions came into force on January 1, 2008; effective implementation of some new provisions could not be fully established and some operational circulars are still pending. - CDD requirements have been expanded and cover all customers and beneficial owners, whether natural or legal persons. The framework should be expanded by removing three exemptions, requiring additional CDD for beneficiaries of some smaller savings deposit accounts, and broadening the definition of a PEP. - Revised legislation introduces a risk-based approach to CDD modeled on the provisions of the EU Directive; it requires financial institutions to conduct a risk-analysis of their business, apply risk-based CDD, and take appropriate measures to address higher risk situations. - Authorities should consider conducting a ML/FT risk assessment to establish whether additional legal provisions are required to mitigate risks specific to Austria, such as bearer shares, personal asset holding vehicles, and private banking. - Enhanced due diligence is required for non-face-to-face business, cross-border correspondent banking, and business with PEPs; nature and scope of monitoring measures are not defined and are left to financial institutions’ discretion. - Financial institutions should be specifically required to examine the background and purpose of transactions they view as unusual and record findings in writing. - Most STRs originate from “credit institutions”, especially money transfer services. - In November 2008, the authorities initiated an action plan for better protecting the anonymity of reporting entities and persons filing STRs. - Compliance management and internal audit obligations exist for most categories of financial institutions but need better focus; legal provisions should set out compliance officer’s seniority, independence and right to access CDD data and transaction records. - Financial Market Authority (FMA) has overall responsibility for regulation, supervision and enforcement; since January 2008, the OeNB conducts offsite monitoring and onsite examinations of banks. - Concerns about adequacy of licensing process exist, especially assessment of significant or controlling interests when capital is in form of bearer shares; fit and proper tests should be applied to senior managers and all supervisory board members. - FMA and OeNB capacity needs strengthening; additional resources required to increase number of onsite examinations and cover all areas of ML/FT risk. - Sanctioning regime does not appear sufficiently proportionate and dissuasive; application of sanctions should be extended to all members of supervisory boards and senior management. - Local district authorities supervise domestic financial institutions that carry out limited specialized financial business; legal provisions for licensing, business, supervision and sanctioning of these institutions are not sufficiently adapted to their activity and ML/FT risks. - The increasing number of examinations and meetings with senior management demonstrate steps to ensure closer AML/CFT supervision; both authorities rely on external auditors to confirm AML/CFT controls are in place and operational. ### Preventive measures — designated non-financial businesses and professions (DNFBPs) - Further to the Third EU AML Directive, all DNFBPs are covered in laws and regulations; coverage goes beyond the FATF standard to include all types of dealers, auctioneers and accounting professions. - Preventive measures applicable to DNFBPs need to be expanded and better tailored to their specificities. CDD requirements should be defined for all casinos operating in Austria, including internet casinos. - Legal ambiguities in coverage of transactions performed by notaries, lawyers and accountants should be removed. - Requirements for enhanced monitoring of higher risk categories or transactions called for by the FATF should be extended to the sector. - Implementation generally needs strengthening, especially for trust and company service providers (TCSPs); new or revised guidelines need to be issued. - Heightened professional secrecy provisions for lawyers, notaries and accountants may contribute to the low level of reporting of suspicious transactions. - Supervisory system mostly lacks resources and expertise; sanctioning regime appears proportionate and dissuasive for lawyers and notaries but needs development for other professions. - Measures to reduce reliance on cash appear insufficient, considering the important quantity of large denomination banknotes issued by the OeNB. ### Legal persons and arrangements & non-profit organizations - Austria mainly relies on a central registration of all types of legal persons, including foundations; access to relevant ownership information is hampered by limited requirements to register changes in ownership, possibility for companies to issue bearer shares, and option for private foundations to record beneficiaries’ names in non-public appendixes to founding deeds. - The Treuhand is a very common feature of the Austrian economy. A partial registration system is in place limited to financial assets and is mandatory only for some trust service providers (lawyers and notaries). - There are no measures to ensure the transparency of foreign trusts operated in Austria. - Obligations for NPOs to ascertain and maintain information about their ownership structure and transactions should be expanded. ### National and international cooperation - Mechanisms for domestic cooperation and coordination are institutionalized and embedded in the Federal Constitution; various policy and operational fora established under the lead of the Ministry of Finance enable national competent authorities to exchange information on AML/CFT issues and coordinate activities. - Austria has enacted legislation encompassing key requirements of international conventions regarding mutual legal assistance, signed several bilateral treaties with neighboring states, and shortened domestic procedures to improve processing of information requests. - Austria may provide a range of measures of mutual legal assistance in AML/CFT investigations, prosecutions and related proceedings initiated by other countries; legal regime for foreign requests for confiscation is comprehensive. - Extradition framework is not entirely in line with the FATF standard and its effectiveness was not established. - Provision of mutual legal assistance suffers from shortcomings: strict requirements for lifting bank secrecy and extensive scope of legal privilege slow down provision of mutual legal assistance. ### Key recommendations (excerpt) - Conduct a ML/FT risk assessment. - Align the criminalization of ML/FT with the standards. - Widen the scope of customer due diligence (CDD) obligations. - Ease legal requirements for authorities to have access to information held by financial institutions and legal professions. - Extend the functions of the A-FIU to analysis and dissemination. - Broaden the STR provisions. - Strengthen licensing requirements and available sanctions for financial institutions. - Align preventive measures for DNFBPs with the FATF standards. - Ensure adequate transparency of beneficial ownership of legal persons and legal arrangements. *Source: IMF assessment chapter contained in the provided PDF content.* ### 39. Supervisory authorities have a fairly comprehensive regime for international cooperation on ### _cr09299 - 39. Supervisory authorities have a fairly comprehensive regime for international cooperation on ### Summary Table of Observance and Key Recommendations - FATF 40+9 Recommendations — Summary of key assessor recommendations across headings 1–6 below. - Notation of compliance levels used in the assessment: - Compliant (C) - Largely compliant (LC) - Partially compliant (PC) - Non-compliant (NC) - Not applicable (NA) ### 1. Legal System and Related Institutional Measures - Criminalization of Money Laundering - R.1: LC - R.2: LC - Key recommendations: - Criminalize self-laundering. - Make counterfeiting and piracy of products predicate offense to ML. - Undertake actions (awareness raising or training) to alter the kind of proof currently deemed necessary to show that property is proceeds or that conduct resulted in proceeds so that it will not be necessary for a successful prosecution that the prosecutor provides evidence that a specific offence occurred or a specific perpetrator engaged in the conduct. - Increase the penalties set forth for natural persons by Article 165 of the Criminal Code and the minimum sanctions applicable in the case of legal persons. - Criminalization of Terrorist Financing - SR.II: PC - Recommendations: - Extend the criminalization of FT in all instances envisaged in SR.II with reference to the financing of terrorist organizations and the individual terrorist, regardless of whether that financing is for criminal activities, legal activities or general support. - Extend the criminalization to the whole range of activities envisaged by Article 2, paragraph 5 (b) & (c) of the 1999 International Convention for the Suppression of the Financing of Terrorism. - Increase the penalties set forth for FT. - Confiscation, freezing, and seizing of proceeds of crime - R.3: PC - Recommendations: - Ease the requirements for law enforcement authorities to obtain access to information held by financial institutions and lawyers and notaries. - Consider changes to ease the burden in establishing that an organization is a “criminal organization” or otherwise change provisions so that Article 20b of the Criminal Code, when applied in the case of property at the disposal of such organizations, is more readily enforceable. - Improve effectiveness by using provisions more frequently to restrain and confiscate criminal assets for ML, FT and predicate crimes, especially by making more use of forfeiture. - Maintain more precise statistics on amounts restrained and confiscated in each instance. - Freezing of funds used for terrorist financing - SR.III: PC - Recommendations: - Set up procedures within Austria that will ensure freezing without delay of assets other than funds (such as immovable goods, companies and businesses and vehicles). - Modify the OeNB regulations adopted pursuant to the Foreign Exchange Act in order to make possible freezing of funds and assets held by EU-internals in all instances set forth by SR.III. - Provide more guidance to the private sector, especially the non banking financial industry and DNFBPs, on the freezing obligations stemming from the international standard. - The Financial Intelligence Unit and its functions - R.26: PC - Recommendations: - Review the legal framework in order to clearly establish a Financial Intelligence Unit that serves as a national center for receiving, analyzing and disseminating disclosures of STRs and other relevant information concerning suspected ML or FT activities. - Empower this FIU to analyze STRs, prior to any police or criminal investigation, with access to the financial, administrative and law enforcement information and authorization to obtain additional information from reporting parties. - Law enforcement, prosecution and other competent authorities - R.27: C - R.28: LC - Recommendation: - Ease the requirements for law enforcement authorities to obtain access to information held by financial institutions and by lawyers and notaries. - Cross Border Declaration or disclosure - SR IX: PC - Recommendations: - Subject to disclosure or declaration obligations the transportation of cash or other bearer negotiable instruments into/out of the municipalities of Jungholz and Mittelberg. - Develop a computerized database for the storage of the information gathered through the declaration/disclosure process for intelligence to target cash couriers and to fight against ML/FT. - Assess the risk and develop a strategy for containing the ML/FT risk associated to the transportation of cash or other bearer negotiable instruments into/out the municipalities of Jungholz and Mittelberg. - Enhance cooperation between the customs and the A-FIU and develop a system to enhance the reporting of cases of cross-border transportation to the A-FIU. ### 2. Preventive Measures: Financial Institutions - Risk of money laundering or terrorist financing — general gap identification. - Customer due diligence, including enhanced or reduced measures - R.5: PC - R.6: LC - R.7: LC - R.8: LC - Recommendations: - Require that holders of savings documents for savings deposit accounts which balance is lower than EUR 15,000 and are not registered in the customer’s name, be considered as beneficial owners and be subject to corresponding identification and verification obligations. - Extend CDD measures to customers that are credit and financial institutions established in EU member countries. - Remove the blanket exemption for fiduciary accounts below EUR 15,000. - Conduct ML/FT risk assessment and require enhanced due diligence measures with respect to business relationships and transactions that are of higher risk. - Issue guidelines on the extent of the CDD measures on a risk sensitive basis. - Request financial institutions to apply enhanced due diligence when a customer becomes a PEP after the establishment of the business relationship. - Apply the measures listed under 40b Paragraph. 1 no. 2 of the Banking Act to all correspondent banking, i.e. also with respect to European Economic Area (EEA) Member States. - Require financial institutions to have policies in place or to take measures to prevent the misuse of technological developments in ML/FT schemes. - Consider requiring banks to remove the fee charged for closing a savings deposit account. - Third parties and introduced business - R.9: LC - Recommendation: - Determine whether EU and EEA countries where third parties are based adequately apply the FATF Recommendations. - Financial institution secrecy or confidentiality - R.4: PC - Recommendation: - Lighten the conditions set out in Article 116 of the Code of Criminal Procedure for disclosure of banking information in order to facilitate access by the police to banking records. - Record keeping and wire transfer rules - R.10: C - SR.VII: C - Note: The recommendations are fully observed. - Monitoring of transactions and relationships - R.11: PC - R.21: PC - Recommendation: - Define a requirement for financial institutions to examine the background and purpose of all complex, unusual large transactions, or patterns of transactions, that have no apparent or visible economic or lawful purpose, and to give special attention to business relationships and transactions with persons from or in countries which do not or insufficiently apply the FATF Recommendations. - Suspicious transaction reports and other reporting - R.13: PC - R.14: LC - R.19: C - R.25: LC - SR.IV: LC - Recommendations: - Extend financial institutions’ requirement to report to the FIU in order to cover all situations when there is a suspicion that funds are the proceeds of a criminal activity, and not only when there is a suspicion that a transaction serves the purpose of money laundering. - Apply the obligation to make a STR to funds that are the proceeds of piracy and counterfeiting, and require professions under the Trade Act (Gewerbeordnung; GewO) to report STRs in case of self-laundering. - Supervisors should issue guidance to clarify that the reporting obligations extend to situations where persons are suspected of being a terrorist or belonging to a terrorist organization. - Increase effectiveness of the reporting system and mitigate the current self-limitation of reporting entities due to the criminal procedure rules. - Apply the protection for STR reporting only in case of good faith for insurance intermediaries. - Prohibit a financial institution to refer a customer to the police when a transaction has been suspended following an STR. - Require financial institutions to report transactions suspected of being related to terrorism, to terrorist organizations, or to those who finance terrorism, in situations where there is no link to a terrorist act. - Update FMA guidance on reporting. - Internal controls, compliance, audit and foreign branches - R.15: PC - R.22: LC - Recommendations: - Establish the compliance officer function as a management position. - Give the AML/CFT compliance officer the right to access CDD data and information, transaction records and other relevant information. - Integrate AML/CFT compliance into internal audit work, notably for securities and insurance businesses. - Shell banks - R.18: C (fully observed) - Supervisory and oversight system–competent authorities and SROs - R.17: PC - R.23: PC - R.25: LC - R.29: LC - Recommendations: - Make sanctions sufficiently proportionate and dissuasive. - Extend sanctions under administrative criminal procedure to supervisory board and senior management members. - Ensure that capital held in form of bearer shares does not undermine the assessment of significant or controlling interest in a financial institution. - Increase onsite examinations and supervisory oversight within branches and subsidiaries abroad. - Carry out fit and proper tests of senior managers and supervisory board members. - Develop additional guidance available to industry on the new legal requirements. - Establish a regime of supervisory sanctions for domestic financial institutions. - Provide resources, training and support sufficient to enable supervisory divisions to increase AML/CFT oversight. - Money value transfer services - SR.VI: LC - Recommendation: - Revise the framework for preventive measures to address all deficiencies. ### 3. Preventive Measures: Non-Financial Businesses and Professions (DNFBPs) - Customer due diligence and record-keeping - R.12: PC - All DNFBPs: Review the requirements concerning PEPs. - Casinos: - Extend the legal framework to cover all casinos operating in Austria; refine CDD requirements; require casinos to keep record of transactions. - Real estate agents, dealers in precious stones and metals, and TCSPs: - Review and effectively implement CDD requirements, with particular attention to TCSP activities. - Require keeping findings of examination of complex and unusual transactions. - Lawyers, notaries and accountants: - Refine and clarify the scope of CDD requirements. - Review disposition regarding legal privilege so as not to hamper CDD measures. - Require lawyers and notaries to pay special attention to all complex and unusual transactions. - Issue guidance for lawyers to facilitate effective implementation. - Effectively implement the CDD requirements, in particular for accountants. - Suspicious transaction reporting - R.16: PC - Recommendations: - Align grounds for reporting on the standard. - Give special attention to business relationships and transactions with persons from countries insufficiently applying the FATF recommendations. - Casinos: - Require Internet casinos to report STRs and specify AML/CFT internal controls. - Real estate agents, dealers and TCSPs: - Extend legal obligation to report STRs and have internal control in place to all businesses and professions conducting TCSP activities. - Lawyers, notaries and accountants: - Consider reviewing matters that fall under legal professional secrecy of notaries and lawyers, which currently appear very broad. - Regulation, supervision, monitoring, and sanctions - R.24: PC - R.25: LC - Recommendations: - Give the Ministry of Finance adequate powers to perform AML/CFT supervision of internet casinos. - Empower the Ministry of Finance to perform controls on beneficial owners of a significant or controlling interest in casinos, and to prevent actions by associates of criminals. - Put in place a system for monitoring and ensuring compliance with AML/CFT requirements to cover accountants and all the companies active in the TCSP sector. - Give trade authorities the necessary technical and budgetary resources to perform effectively their functions. - Review the amount of the fines permissible under the GewO. - Establish guidelines tailored to the specific needs of each DNFBP, as these currently exist only for notaries, and partially for casinos. - Provide information on current techniques, methods and trend tailored to each DNFBP, as well as systematic case by case feedback on STRs. - Other designated non-financial businesses and professions - R.20: LC - Recommendation: - Take additional measures to reduce the relative importance of use of cash and large denomination banknotes. ### 4. Legal Persons and Arrangements & Nonprofit Organizations - Legal Persons – Access to beneficial ownership and control information - R.33: PC - Recommendations: - Make the regime of private foundations more transparent on beneficial ownership, for example by requiring that the appendix/supplementary declaration be available in the Commercial Register, to reduce the risk that these foundations may be used for ML. - Establish a legal mechanism to trade shares in the Stock exchange in nominative form or adopt legal provisions to make “de-materialization” mandatory. - Conduct an assessment to determine the ML risk potentially associated to the use of bearer shares. - Legal Arrangements – Access to beneficial ownership and control information - R.34: PC - Recommendations: - Ensure transparency where the property held in Treuhand is composed of assets other than funds (regardless of the Treuhänder), where the Treuhänder is someone other than a lawyer, notary or registered TSP, where funds held under Treuhand by lawyers amount to less than the federal state threshold (i.e. between EUR 15,000 and EUR 40,000). - Ensure transparency over foreign trusts operated from Austria. - Implement AML/CFT oversight to ensure TSPs properly obtain, verify and record details of the Treuhand and its beneficial ownership. - Develop effective means by which bodies charged with the oversight of TSPs for AML/CFT purposes can share information with their national or foreign counterparts. - Nonprofit organizations - SR.VIII: PC - Recommendations: - Require NPOs operating under the legal form of private foundations to make information on the identity of persons who own, control or direct their activities, publicly available. - Strengthen requirements for NPOs to maintain and make available to appropriate authorities records of domestic and international transactions that are sufficiently detailed to verify that funds have been spent in a manner consistent with the purpose and objectives of the organization. - Strengthen outreach to the NPO sector. ### 5. National and International Cooperation - National cooperation and coordination - R.31: C (fully observed) - The Conventions and UN Special Resolutions - R.35: LC - SR.I: PC - Recommendations (selected): - Criminalize self-laundering. - Soften the requirements for law enforcement authorities to obtain access to information subject to secrecy. - Extend the criminalization to the whole range of activities envisaged by Article 2, Paragraph 5 (b) and (c) of the 1999 International Convention for the Suppression of the Financing of Terrorism. - Set up procedures within Austria that will ensure freezing without delay of assets other than funds (such as immovable goods, companies and businesses and vehicles). - Modify the OeNB regulations adopted pursuant to the Foreign Exchange Act (for EU-internal terrorists) in order to make possible freezing of funds and assets held by EU-internals in all instances set forth by UNSCR 1373 and SR.III. - Mutual Legal Assistance - R.36: PC - R.37: LC - R.38: PC - SR.V: PC - Recommendations: - Ensure that MLA is granted in a timely, constructive and effective manner. - Conclude arrangements for coordinating seizing and confiscation actions with other countries. - Remove from banking secrecy provisions all requirements which may slow down effective cooperation. - Ensure that extensive scope of legal privilege does not slow down effective cooperation. - Consider sharing of confiscated assets with countries other than EU members and the United States. - Extradition - R.39: LC - R.37: LC - SR.V: PC - Recommendation: - Take steps to improve the overall effectiveness of the extradition framework. - Other Forms of Cooperation - R.40: LC - SR.V: PC - Recommendations: - Grant the A-FIU sufficient resources to respond to foreign FIU requests in a timely way. - Enable the A-FIU to exchange information on FT. - Establish provisions which allow competent authorities to conduct inquiries on behalf of securities supervisors from third countries. ### 6. Other Issues - Resources & Statistics - R.30: LC - R.32: PC - Recommendations: - Improve the statistical apparatus. - Provide for additional resources for the police and supervisory bodies. *IMF assessment excerpt: _cr09299 - 39. Supervisory authorities have a fairly comprehensive regime for international cooperation on AML (extract).* --- _Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2009/_cr09299.pdf_