Austria's Anti-Money Laundering Framework Requires Urgent Reform to Counter Eastern European Financial Crime Gateway Risks
According to a dire report from the Paris-based Financial Action Task Force (FATF), Austria is not doing a good enough job at preventing financial crime; despite being an important gateway for doing business in eastern European countries. FATF released its Mutual Evaluation Report on 19 October 2014, after conducting an in-depth review of Austria's money-laundering laws by a team of government experts from - member jurisdictions. Although Austria has made progress over the last ten years with respect to implementation of its anti-money-laundering regime, significant gaps exist in its ability to successfully investigate and prosecute financial crimes.
Austria's Financial Intelligence Unit (FIU), which is part of the Arbeitsgruppe für Finanziellen Staatsanwaltschaft (Criminal Investigation Services), deals with money-laundering cases, found to be severely deficient with regard to resources, operational independence and ability to effectively combat the flow of illegal money. In addition, Austria's penalties for money laundering are inadequate to deter future offenders; for example, no court (i.e., corporation) has yet been prosecuted for money laundering under Austrian law. Furthermore, hesitations among judges and poor interpretation of falsifying evidence reduce the investigative/prosecutorial ability of personnel in law enforcement agencies; as a result, there are a lower number of convictions.
The second report states that Austria does not have sufficient investigators and prosecutors to efficiently recover and return assets seized as a result of financial crimes to their actual victims. This report points out that while there have been improvements made in terms of Austria's overall comprehension of the risks associated with money laundering and terrorist financing, a common risk assessment framework among the numerous competent authorities is still absent.
Business Honor is of the view that Austria's financial intelligence restructuring represents a critical operational reform necessity for combating illicit finance effectively.
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