VZCZCXRO9203
PP RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSL RUEHSR
DE RUEHVI #1266/01 2741455
ZNR UUUUU ZZH
P 011455Z OCT 09
FM AMEMBASSY VIENNA
TO RUEHC/SECSTATE WASHDC PRIORITY 3391
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
INFO RUCNMEM/EU MEMBER STATES

UNCLAS SECTION 01 OF 02 VIENNA 001266 
 
SIPDIS 
 
TREASURY FOR FTAT, OCC/SIEGEL, AND OASIA/ICB/MAIER 
TREASURY PASS TO FEDERAL RESERVE AND SEC/E. JACOBS 
 
E.O. 12958: N/A 
TAGS: EFIN AU
SUBJECT: Stung by FATF Criticism, Austria Signals High-Level 
Commitment to Improving AML/CTF Regime 
 
REF:  (A) VIENNA 1212; (B) VIENNA 1076; 
      (C) VIENNA 0847 
 
¶1. In a September 29 press conference, Austrian 
Vice-Chancellor/Finance Minister Josef Proell announced a 
legislative roadmap to improve Austria's AML/CFT (Anti-Money 
Laundering / Counter-Terrorist Financing) standards in reaction to 
criticism of Austria at the FATF Plenary in Lyon June 24-26 (refs B 
and C).  With this high-level announcement, the GoA is showing -- 
prior to final publication of the FATF final Mutual Evaluation 
Report (MER) on Austria -- that it will respond to shortcomings 
identified in the MER. 
 
¶2. In announcing the roadmap ("transparency package"), Proell cited 
the Austrian Parliament's recent lifting of bank secrecy (for tax 
information exchange cases involving non-citizens) -- in response to 
pressure from the OECD and G-20 -- and described the AML/CFT issue 
as a similar challenge to Austrian authorities.  In a de facto break 
with Austria's long-time status as a banking secrecy jurisdiction, 
Proell argued that improving transparency is key to Austria's 
competitiveness as a financial center and pledged to make every 
effort to avoid Austria showing up again on international 
blacklists. 
 
¶3. The roadmap outlines ten legislative/regulatory changes, some of 
which require action by ministries other than Finance (Interior, 
Justice, and Economics).  Proell plans to present the transparency 
package to the cabinet in October for approval; afterwards, 
ministries  will start drafting relevant legislation. 
 
¶4. COMMENT:  Unlike bank secrecy (which has "constitutional" status 
in Austria), the legal amendments outlined below require only simple 
majority votes in Parliament -- which should be straightforward for 
the current coalition.  However, it will take at least a year 
(perhaps significantly longer) to implement the full roadmap given 
the bureaucratic and legislative challenge of amending numerous 
laws.  END COMMENT. 
 
¶5. (U) The ten points on Proell's roadmap: 
 
-- Criminalization of "own money" laundering (currently, money 
laundering is a criminal offence in Austria only if the money stems 
from third party crimes, not if the money was obtained by one's own 
criminal activity). 
 
-- Separation of the reporting of suspicious transaction reports 
(STRs) from criminal procedures.  Currently, an STR immediately 
leads to the introduction of criminal procedures, which could give 
criminal or terrorist groups an early warning.  The new approach 
will be to thoroughly analyze and investigate the STR before 
formally introducing criminal proceedings. 
 
-- Broadening of STRs. Currently, banks and financial institutions 
must render an STR in case of "suspicion or probable reason to 
assume" that a transaction serves the purpose of money laundering or 
terrorist financing.  The planned new STR requirement would expand 
reporting to include suspicion that financial assets represent the 
profit from criminal activity (even if a transaction does not 
necessarily represent money laundering) and where there is a 
connection to a terrorist organization or terrorist financier (i.e., 
even if there is no direct financing of terrorist activity). 
 
-- More power, personnel for FIU: Austria's Financial Intelligence 
Unit would get a greater role in receiving, analyzing, and sharing 
STRs, e.g., greater scope for information exchange in case of STRs 
regarding terrorist financing.  Although the FIU does not belong to 
Proell's Ministry, Proell opined that the FIU would likely need more 
personnel given the strong increase in STRs in recent years. 
 
-- More responsibility for the FMA: Austria's Financial Market 
Authority (regulator for banks and other financial enterprises) will 
be able to issue risk-oriented standards for supervision and 
auditing to fight AML/CFT. 
 
-- More power, responsibility for bank compliance officers: 
compliance officers in financial institutions will have clearer 
responsibilities; regulations will define data they must be able to 
access and where in the bank hierarchy they must be located. 
 
-- Transparency for stock corporations: In the future, bearer shares 
will be allocated only for listed corporations.  An electronic 
shareholder register will be introduced. 
 
-- Transparency for private trusts: All current beneficiaries will 
have to be registered publicly.  In most cases, beneficiaries 
already show up in public documents, but present loopholes will be 
closed (e.g., when the foundation document only includes an interim 
agency which later names its beneficiaries). 
 
VIENNA 00001266  002 OF 002 
 
 
 
-- Tightening asset seizure: Currently, asset seizure in Austria in 
connection with money laundering and terrorist financing is possible 
only in cross-border cases.  In the future, seizure will also be 
possible in domestic cases. 
 
-- More controls on gambling: Casinos will have to verify the 
identity of customers transacting more than EUR 3,000 (currently 
only done for citizens from the EU and EEA, not from third 
countries).  The GoA will also clarify AML/CTF applicability to 
Internet casinos. 
 
YAP