- Funding Programme
- Year
- 2023
Regional and local authorities – Enhancing quality of public administration and cooperation, preventing of money laundering and terrorism financing
The commission helped strengthen risk-based AML/CFT (anti-money laundering/combating financing of terrorism) supervision in Austrian Länder (states) for sectors with higher money laundering and terrorism financing risks. This technical support project began in September 2023 and will conclude in August 2025.
Context
The Financial Action Task Force (FATF) evaluated Austria's AML/CFT system in 2016 and identified several vulnerabilities, particularly in the supervision of designated non-financial businesses and professions (DNFBPs). Since then, Austria has made progress in addressing these issues, but some challenges remain. The country's updated 2021 National Risk Assessment (NRA) highlights sectors under the Trade Act 1994, such as traders, real estate agents, insurance brokers, and company service providers, as particularly exposed to financial crime risks. These entities have a limited understanding about the risks identified in the NRA resulting in a low number of suspicious transaction reports. The Austrian authorities recognise the need for improvements in the legislative and administrative framework for AML/CTF risk-based supervision of these sectors, which are under the supervision of around 120 local trade authorities. Challenges include inconsistent enforcement, limited coordination and information exchange, and a lack of awareness among authorities and obliged entities. The project therefore aims to build capacity for regional authorities to enforce rules and mitigate emerging ML and TF risks.
Support (to be) delivered
The project provides the Austrian authorities with support in the following areas addressing the findings of the FATF assessment and the NRA :
- Review of the existing legislative and administrative framework for the risk-based AML/CFT supervision of selected higher risk sectors within the remit of regional and local competent authorities;
- Advice for developing an action plan to strengthen the risk-based AML/CFT supervision and related inter-institutional cooperation and exchange of information and experience at domestic and EU level;
- Support for the development of a uniform manual for risk-based AML/CFT supervision for the competent supervisory authorities and data gathering guidelines for the purposes of conducting supervisory activities;
- Contribution to the development of a framework for coordination and structured exchange of information between the AML/CFT supervisors in Austrian Länder and a mechanism for monitoring progress and impact of the AML/CFT supervision;
- Organisation of several trainings and awareness-raising workshops on AML/CFT requirements for higher-risk sectors and on risk-based AML/CFT supervision for the competent supervisory authorities from Austrian Länder.
This support is delivered in form of workshops, peer-to-peer exchanges, expert advice, reports and manuals.
Expected results
The general objective of this project is to support Austria in its efforts to implement reforms and strengthen its institutional and administrative capacity, including at regional and local levels.
The expected long-term effect of this project (impact) is the achievement of an enhanced AML/CFT regime in Austria through the strengthening of the risk-based AML/CFT supervision in Austrian Länder regarding the sectors exposed to higher money laundering and terrorism financing risks in line with EU and international standards.