Austria: Money‐Laundering Prevention and Control

DOIhttps://doi.org/10.1108/eb027192
Publication Date01 Jan 1999
Pages265-278
AuthorAndreas Rahmatian
SubjectAccounting & finance
Journal of Money Laundering Control
Vol.
2 No. 3
COUNTRY PROFILES
Austria: Money-Laundering Prevention and Control
Andreas Rahmatian
INTRODUCTION
In 1993, Austria embarked on comprehensive
legislation to combat money laundering. The
principal areas of legislation on the prohibition and
the prevention of money laundering are:
(1) the criminal law, namely §§165, 278a(2)1 as
well as §§20-20b2 of the Austrian Criminal
Code ('Strafgesetzbuch'', hereafter 'StGB') and
the Austrian Code of Criminal Procedure
('Strafprozeßordnung',
hereafter 'StPO'), especi-
ally §144a;3
(2) the administrative law in relation to the con-
trol of credit and financial institutions, particu-
larly §§39-41 of the Austrian Banking Act
('Bankwesengesetz',
hereafter 'BWG').4
The law on money laundering is, in conceptual
terms,
a rather new one. Not only was it necessary
to define the phenomenon of money laundering in
the terms of criminal law; the legislation also had
to provide, within the framework of criminal law
and criminal procedure, means to seize suspicious
assets temporarily or permanently or to siphon off
illegal profits by way of unjust enrichment. In
addition, these measures had to be safeguarded
with a power of the criminal court to grant an
interlocutory injunction. Most of these legal con-
cepts and remedies are traditionally to be found in
the realm of the civil law and the civil courts. The
substantive and procedural regulations regarding
money laundering clearly deviate from the notion
of classical criminal law.5 It is therefore not sur-
prising that the legislation showed several short-
comings in the first place and had to be amended
a few times since 1993. Another amendment is
awaited in respect of §165 StGB, but it can be said
already that the law will then still not be com-
pletely satisfactory.
Several international and European instruments
oblige Austria to take steps against money launder-
ing. The first and foremost one is the EC directive
of 1991 on prevention of the use of the financial
system for the purpose of money laundering (here-
after 'EC directive').6 Furthermore, Austria has
signed and ratified the UN Convention against
Illicit Traffic in Narcotic Drugs and Psychotropic
Substances ('Vienna Convention') and the Council
of Europe Convention on Laundering, Search,
Seizure and Confiscation of the Proceeds of Crime
('Strasbourg Convention'). Austria is also a
member of the Financial Action Task Force on
Money Laundering (FATF),7 the leading world
anti money-laundering body, and is expected to
comply with the 40 Recommendations of the
FATF.8
The problem of money-laundering control is a
playground for academics and a minefield for prac-
titioners. As far as the practitioners are concerned,
lawyers, notaries or certified public accountants
become more and more important targets of
money-laundering activities.9 They have to take
care not to become entangled in money laundering
themselves (and they are increasingly expected to
prevent money laundering actively),10 while at the
same time they have to observe their confidential-
ity duties towards their clients. It can be compli-
cated indeed to reconcile these different tasks.
On the other hand, those who are engaged in
the prosecution of money laundering always have
to overcome the problem of establishing that not
only the perpetrator but also the criminal act itself
is kept secret by all means. Therefore, few cases
ever reach the courts and even a smaller number
results in convictions.11 There seems to have been
only one decision of the Austrian Supreme Court
on the main money-laundering offence (§165
StGB) until now.12
The law may rarely be applied in practice, but
the literature on money laundering is remarkably
extensive. The problems of money-laundering
control are predominantly the object of theoretical
discussion in learned journals and commentaries.
Inevitably, the following account of the legal situa-
Page 265

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