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Wednesday, April 12, 2017

Austrian Report: Money Laundering Is On The Rise

A recent report conducted by Austrian officials showed that the suspicious cases indicating money laundering had seen an increase last year.

According to the latest report by the Federal Criminal Police Office (BK), 2,150 suspicious cases (banks reported 2,002 cases) occurred in Austria in 2016. Compared to the year of 2015, where the number of such instances was 1,793, is an increase of almost 20 percent. Despite the increase of suspicious cases, the number of money laundering related convictions decreased from 58 to 36 from 2015 to 2016.

The BK presented its annual report on money laundering on the 3rd Austrian Money Laundering Conference, which took place between March 21 and 22. The event was carried out as part of the project “Together with the economy”. Representatives from the Federal Criminal Police Office (BK), experts from the financial, judicial and economic ministries, as well as the Financial Market Supervisory Authority (FMA) and the Chamber of Economic Defenders took part on the event. Additionally, about 320 people from financial services, legal professionals, representatives of law enforcement, and district administration authorities visited the second-day conference in the Vienna Chamber of Commerce. The implementation of the 4th EU Money Laundering Directive and the legal consequences for Austria was the central theme of the event. However, other actual topics, such as the latest developments in the fight against terrorist financing, were also discussed.

The Federal Criminal Police Office reported an increase in terrorist financing, the agency reported 174 of such cases. Law enforcement authorities turn a major focus on terrorist-related money laundering cases.
The BK also mentioned bitcoin money laundering cases. However, the agency did not disclose the number of such instances, they only mentioned that cybercriminals clean their dirty virtual currencies on the dark web, and the identities of the suspected criminals are difficult to determine since the anonymity the dark side of the internet provides.

According to the report, third-party accounts were also used for money laundering purposes by criminals. In a specific case, 115,000 euros were transferred to an uninvolved person, whose bank account was acquired by the criminals with the use of phishing attacks.

In another case, an employee of the ministry transferred 4.5 million euros to an abroad offshore account for the “rehabilitation of cultural goods”. The money landed on bank accounts that the suspect kept for offshore companies. The employee was arrested on the suspicion of embezzlement.

The BK research detailed that in 297 cases, the investigators of the International Bureau sent requests to obtain more detailed information on the facts and the reported companies or persons. In 77 cases, the Interpol directly reached out to Austrian law enforcement authorities to obtain more information. The BK reported that 1,696 files were forwarded to other departments. According to the analysis for the further execution or the determination of the predicate offenses, the Financial Intelligence Unit processed 1,166 of such cases.

The Money Laundering Office made a total of 301 inquiries to notifiable professional groups. They evaluated bank accounts in 93 cases. In 318 cases, domestic authorities made inquiries. In 18 cases, information was exchanged with financial authorities and, in 174 cases, the Federal Office for Constitutional Protection and the Fight against Terrorism (BVT) was informed of the findings. 46 cases were reported to the public prosecutor’s office and 33 to the Financial Market Authority (FMA).

“This is the result of some implications for the national anti-money laundering systems in general and the money laundering service in particular. In the course of the implementation of the 4th EU Money Laundering Directive, a legal framework for the implementation of future analysis activities could be created by announcing the financial market money laundering legislation. Since the legal amendment has not entered into force until January 1, 2017, the detailed practical implementation remains to be awaited in the area of effectiveness of the money laundering office,” the press release stated about the implementation of the 4th EU Money Laundering Directive.

The Money Laundering Office in Austria employs 21 persons in the reporting office. In addition to the secretaries and the head of the department, 14 executive staff members are responsible for the operation of the messaging center. Three employees are permanently employed abroad by the office. Additionally, to the police and economic training, the investigators have practical experience in the field of national and international police operations. In order to constantly expand this knowledge, the employees of the Money Laundering Office regularly participate in national and international training, according to the press release.
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