Austria Lags in Money Laundering Fight, Warns Global Financial Watchdog FATF
By Francois Murphy
FATF Report Highlights Ongoing Shortcomings in Austria's Anti-Money Laundering Efforts
VIENNA, April 30 (Reuters) - Austria continues to fall short in its investigation and prosecution of money laundering despite facing a range of illicit finance threats as a gateway to Eastern Europe, the global financial crime watchdog said in a report on Thursday.
Findings from the Mutual Evaluation Report
The Paris-based Financial Action Task Force found in the so-called mutual evaluation report, a review carried out by experts from other FATF countries, that while Austria had made some progress since its last such review 10 years ago, much still needed to be done.
Assessment of Risk Understanding
"While Austria has improved its understanding and assessment of money laundering and terrorist financing risks since its last mutual evaluation, a nuanced and consistent risk understanding across all competent authorities is yet to be achieved," the FATF, an intergovernmental body, said in a statement.
Operational and Resource Weaknesses
Weaknesses identified included "insufficient resources as well as limitations in operational independence" at the Austrian Financial Intelligence Unit, a unit of the Criminal Intelligence Service that deals with money laundering, the FATF said.
Enforcement and Prosecution Challenges
Ineffective Punishments and Sanctions
The punishment imposed for money laundering offences in Austria is also not effective in dissuading would-be offenders, the watchdog said, adding that such sanctions had not yet been applied against any legal person, such as a company.
Restrictive Legal Interpretations
"Restrictive interpretations of the money laundering offence and high standards of proof continue to limit investigation and prosecution," the FATF said, adding that the number of money laundering convictions remains low.
Resource Constraints in Asset Recovery
There are also too few investigators and prosecutors to ensure the recovery of assets linked to financial crimes, and the level of seized assets returned to victims is low, it said.
Recommendations for Improvement
Key Steps for the Next Three Years
Resourcing and Prosecution Effectiveness
The report recommended improvements Austria should make in the next three years, including: "ensuring its financial intelligence unit is appropriately resourced and taking steps to ensure authorities can effectively secure prosecution of the full range of money laundering offences".
(Reporting by Francois Murphy, Editing by Franklin Paul)