Fight against money laundering in Austria: millions of dollars wasted!

Fight against money laundering in Austria: millions of dollars wasted!

The global fight against money laundering is showing alarming results: the anti-money laundering fight covers less than 0.1 percent of all criminal money flows. This raises questions about the effectiveness and economic costs of the existing regulations. According to a report by Die Presse, the cost of compliance exceeds the actual confiscated finances by more than 100 times. Austria is particularly in focus because a preliminary report from the FATF (Financial Action Task Force) shows serious weaknesses in the Austrian fight against money laundering.

The FATF finds that the existing system of seizures and criminal proceedings does not correspond to the risk exposure in Austria. A bad rating could have serious long-term consequences, including more difficult access to international financial systems and, in some cases, billions in economic damage. Experts therefore recommend carefully checking the implementation of existing rules before new regulations are introduced.

Criticism of the implementation

The gap between political intentions and real results is another key problem. Banks, companies and taxpayers could suffer from increased persecution, while the criminals themselves often remain untouched. As a result, the costs of compliance and auditing are ultimately passed on to the customers. Furthermore, the FATF and other critics have criticized the lack of clear “guidelines” in law enforcement.

The FATF has noted that there is a need for a good anti-money laundering organizational structure that can adapt quickly. The financial sector itself does well, but does not receive top marks in the anti-money laundering rating. Only a few countries can actually boast a “highly effective” rating. A key point is that not all breaches of the law can be prevented through regulation, which underlines the urgency of more effective policy measures.

Germany's supervision in focus

In contrast to the critical results in Austria, BaFin reports on progress in money laundering prevention in Germany. A BaFin report highlights the strengths of the German system, including a strong understanding of risk and an effective supervisory system. The FATF conducted comprehensive audits in Germany, covering ministries and agencies. In particular, the Federal Ministry of Finance, the Federal Ministry of Justice and the Federal Criminal Police Office were subjected to a detailed analysis.

Germany receives a positive rating in the “Technical Compliance” category, while the “Effectiveness” is moderate on average. In the areas of IO 3 (effectiveness of supervision) and IO 4 (effectiveness of preventive measures in the private sector), the assessments of the countries examined are often similar or worse.

The FATF auditors praised BaFin's risk-based approach model and its commitment to further improve money laundering prevention supervision. In order to create additional capacity here, BaFin is planning to increase its supervisory staff and set up new departments. Federal Finance Minister Christian Lindner also announced the creation of a new higher federal authority to combat financial crime, which will also coordinate supervision in the non-financial sector.

The developments in both Austria and Germany illustrate the challenges and efforts in the international fight against money laundering. It remains to be seen what specific measures will be implemented in the coming years to increase the effectiveness of the fight against financial crime.