Austria

Sanctions

No

FATF AML Deficient List

No

Higher Risk

US Dept of State Money Laundering Assessment 

Medium Risk

Weakness in Government Legislation to combat Money Laundering
Compliance of OECD Global Forum’s information exchange standard
Compliance with FATF 40 + 9 Recommendations

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ANTI-MONEY LAUNDERING

 

FATF Status

Austria is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

 

Compliance with FATF Recommendations

The latest Follow-up Report & Technical Compliance Re-Rating was completed in November 2018.  According to that Evaluation, Austria was deemed Compliant for 18 and Largely Compliant for 18 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 3 of the Effectiveness & Technical Compliance ratings.

 

US Department of State Money Laundering assessment (INCSR)

Austria was deemed a Jurisdiction of Primary Concern by the US Department of State 2016 International Narcotics Control Strategy Report (INCSR) but has not been included since. Key Findings from the last report are as follows: -

Austria is a major regional financial center. Austrian banking groups control significant shares of the banking markets in Central, Eastern, and Southeastern Europe. Money laundering occurs to some extent within the Austrian banking system as well as in non-bank financial institutions and businesses. Money laundered by organized crime groups derives primarily from fraud, smuggling, corruption, narcotics trafficking, and trafficking in persons. Theft, drug trafficking, and fraud are the main predicate crimes in Austria according to conviction and investigation statistics. Austria is not a frequent offshore destination for illicit funds and has no free trade zones.

Casinos and gambling are legal in Austria, but in some provinces slot machines are prohibited, and there are efforts underway to limit certain aspects of sport betting. The laws regulating casinos include AML/CFT provisions. There are migrant workers in Austria who send money home via all available channels, including regular bank transfers and money transmitters, but also informal and illegal remittance systems. No information is available to what extent informal systems are used.

 

SANCTIONS

There are no international sanctions currently in force against this country.

 

BRIBERY & CORRUPTION

 

Rating                                                                           (100-Good / 0-Bad)
Transparency International Corruption Index                           76
World Governance Indicator – Control of Corruption             91

Corruption does not impede business in Austria, but there is a small risk of corruption in public procurement. The Austrian Penal Code (in German) criminalises attempted corruption, active and passive bribery, bribery of foreign officials and politicians, extortion, fraud,embezzlement and money laundering. The government has generally implement anti-corruption laws effectively, but some high-level corruption cases have dragged on for many years. Facilitation payments are criminalised, and it is very uncommon for companies to make irregular payments or bribes in the country. For further information - GAN Integrity Business Anti-Corruption Portal

 

 

ECONOMY

Austria, with its well-developed market economy, skilled labor force, and high standard of living, is closely tied to other EU economies, especially Germany's. Its economy features a large service sector, a relatively sound industrial sector, and a small, but highly developed agricultural sector.

Economic growth has been relatively weak in recent years, approaching 0.9% in 2015. Austria's 5.8% unemployment rate, while low by European standards, is at its highest rate since the end of World War II, driven by an increased number of refugees and EU migrants entering the labor market. Without extensive vocational training programs and generous early retirement, the unemployment rate would be even higher.

Although Austria's fiscal position compares favorably with other euro-zone countries, it faces several external risks, such as unexpectedly weak world economic growth threatening the export market, Austrian banks' continued exposure to Central and Eastern Europe, repercussions from the Hypo Alpe Adria bank collapse, political and economic uncertainties caused by the European sovereign debt crisis, the current refugee crisis, and continued unrest in Russia/Ukraine. Early signs point towards a slight improvement in 2016, driven by low interest rates on government debt. Currently, the budget deficit stands at 2.7% of GDP and public debt has reached a post-war high of 84.2% of the GDP.

Agriculture - products:

grains, potatoes, wine, fruit; dairy products, cattle, pigs, poultry; lumber and other forestry products

 

Industries:

construction, machinery, vehicles and parts, food, metals, chemicals, lumber, paper and paperboard, communications equipment, tourism

Exports - commodities:

machinery and equipment, motor vehicles and parts, paper and paperboard, metal goods, chemicals, iron and steel, textiles, foodstuffs

Exports - partners:

Germany 29.4%, US 6.4%, Italy 6.1%, Switzerland 5.7%, France 4.4%, Slovakia 4.2% (2015)

Imports - commodities:

machinery and equipment, motor vehicles, chemicals, metal goods, oil and oil products, natural gas; foodstuffs

Imports - partners:

Germany 41.5%, Italy 6.3%, Switzerland 6%, Czech Republic 4.2% (2015)

The Austrian government welcomes foreign direct investment, particularly those investments with the potential to create jobs in high technology fields, support capital-intensive industries, and enhance R&D activities.

Austria, with its well-developed market economy, skilled labor force, and high standard of living, is closely tied to other EU economies, especially Germany's. Its economy features a large service sector, a relatively sound industrial sector, and a small, but highly developed agricultural sector.

Economic growth has been relatively weak in recent years, approaching 0.9% in 2015. Austria's 5.8% unemployment rate, while low by European standards, is at its highest rate since the end of World War II, driven by an increased number of refugees and EU migrants entering the labor market.

The country’s geopolitical location between Western European industrialized nations and the growth markets in Central, Eastern, and Southeastern Europe (CESEE) has led to a high degree of economic, social, and political integration with fellow European Union (EU) member states and the CESEE. Border controls between Austria and all of its eight neighboring countries have been lifted under the EU's Schengen Agreement, though partial and sporadic border checks reintroduced since the start of the refugee crisis in August 2015 may slow surface traffic. EU enlargements in 2004, 2007, and 2013 strengthened Austria's attractiveness as an investment location by increasing access to markets in Eastern Europe, but expansion also bolstered Austria's competitors in that region in such a manner that nearby Budapest, Prague, and Bratislava now compete directly with Vienna for foreign investment.

Some 320 U.S. companies have investments in Austria; many have expanded their original investment over time. Altogether, Austria offers a stable, advantageous, and attractive climate for foreign investors, albeit one with increasing challenges.

The most positive aspects of Austria’s investment climate include:

Relatively high political stability and harmonious labor-management relations, low incidence of labor unrest;

Skilled labor in many sectors;

High productivity and international competitiveness;

Rule of law;

Excellent quality of life, personal security, high-quality health, telecommunications, and energy infrastructure.

 

Negative aspects of Austria’s investment climate include:

A high overall tax burden (despite an attractive corporate tax model and lower income taxes as of 2016);

Low innovation dynamics;

A substantial public sector and a complex regulatory system with excessive bureaucracy (also for established businesses).​

 

Key sectors that have historically attracted significant investment in Austria:

Automotive sector;

Pharmaceuticals;

Financial sector;

 

Key issue to watch:

The influx of 88,000 asylum seekers in 2015 and a continued flow of asylum seekers and economic migrants might enlarge the diversity of the available work force, and affect unemployment, social friction, and personal safety concerns.

 

 

Country Links

National Bank of the Republic of Austria

Austrian Financial Market Authority

Austrian Financial Intelligence Unit (A-FIU)

Search Company Database | FMA - Finanzmarktaufsicht Österreich

Other Useful Links
FATF
US State Department
Transparency International
World Bank
CIA World Factbook

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