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Money Laundering in the Financial Sector in Austria

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Money Laundering in the Financial Sector in Austria Ableitung von Referenzmodellen zur Bekämpfung der Geldwäsche im österreichischen Finanzsektor DIPLOMARBEIT zur Erlangung des akademischen Grades Diplom-Ingenieur im Rahmen des Studiums Wirtschaftsinformatik eingereicht von Ilian Berov, Bakk.rer.soc.oec. Matrikelnummer 00451124 an der Fakultät für Informatik der Technischen Universität Wien Betreuung: Ao. Univ.-Prof. Mag. Dr. iur. Markus Haslinger Wien, 24 Oktober 2019 Ilian Berov Markus Haslinger Technische Universität Wien A-1040 Wien ▪ Karlsplatz 13 ▪ Tel. +43-1-58801-0 ▪ www.tuwien.ac.at ii iii Deriving reference models for Anti-Money Laundering in the financial sector in Austria DIPLOMA THESIS submitted in partial fulfillment of the requirements for the degree of Diplom-Ingenieur in Business Informatics by Ilian Berov, Bakk.rer.soc.oec. Registration number 00451124 to the Faculty of Informatics at the TU Wien Advisor: Ao. Univ.-Prof. Mag. Dr. iur. Markus Haslinger Vienna, 24 October 2019 Ilian Berov Markus Haslinger Technische Universität Wien A-1040 Wien ▪ Karlsplatz 13 ▪ Tel. +43-1-58801-0 ▪ www.tuwien.ac.at v vi Erklärung zur Verfassung der Arbeit Ilian Berov, Bakk.rer.soc.oec. 1040 Wien, Kettenbrückegasse 20/27 Hiermit erkläre ich, dass ich diese Arbeit selbständig verfasst habe, dass ich die verwendeten Quellen und Hilfsmittel vollständig angegeben habe und dass ich die Stellen der Arbeit – einschließlich Tabellen, Karten und Abbildungen –, die anderen Werken oder dem Internet im Wortlaut oder dem Sinn nach entnommen sind, auf jeden Fall unter Angabe der Quelle als Entlehnung kenntlich gemacht habe. Wien, 24 Oktober 2019 Ilian Berov vii viii Kurzfassung Das Finanzsystem in Österreich wird von Banken dominiert, die 75% des gesamten Vermögens des Finanzsektors halten. Ein Finanzsystem solcher Struktur und Größe kann für kriminelle Aktivitäten, wie Geldwäsche, verwendet werden. Seit Anfang 2017 gibt es ein neues Gesetz in Österreich - das Finanzmarkt-Geldwäschegesetz (FM- GwG). Das Ziel des Gesetzes ist, die entsprechende Rechtsgrundlage in Österreich zu konsolidieren und die EU-Richtlinie 849/2015 umzusetzen. Banken in Österreich haben ein gutes Verständnis von den Risiken der Geldwäsche und Terrorismusfinanzierung (engl.: ML/TF) und von ihren Verpflichtungen zur Bekämpfung dieser Delikte (engl.: AML/CFT). Zwischen 2014 und 2017 beobachtete man einen Anstieg der Anzahl der Verdachtsmeldungen um ca. 53%, die von den Verpflichteten erstellt wurden. Trotzdem kann man die Fähigkeit der Finanzinstitute hinterfragen, neue gesetzliche oder regulatorische Anforderungen zu begegnen. Die Implementierung von rechtskonformen internen Prozessen erfordert die Zusammenarbeit von Compliance-Managern, IT- und Rechtsexperten. Durch die Modellierung dieser Prozesse wird es für die Akteure in ihren Unternehmen leichter sein, entsprechend gegen eventuelle Rechtsverletzungen zu handeln. In dieser Masterarbeit wird die Aufmerksamkeit auf die AML-Vorschriften in Österreich gelenkt. Zusätzlich werden Referenzmodelle abgeleitet, die spezifische Compliance-Anforderungen erfüllen und interne Prozesse im Kontext von AML unterstützen könnten. Schlüsselwörter: Geldwäsche, Bekämpfung der Geldwäsche, KYC, CDD, Referenzmodellierung, Compliance Management, Finanzmarkt ix x Abstract The financial system in Austria is dominated by banks, which hold 75% of the total assets of the financial sector. A financial system of this structure and size can be used for criminal activities such as money laundering. Since the beginning of 2017 there is one consolidated money laundering act in Austria - The Financial Market - Money Laundering Act (FM-GwG). The aim of the Act is to consolidate the relevant Anti-Money Laundering legal basis in Austria and to implement EU Directive 849/2015. Banks in Austria have a good understanding of the risks of money laundering and terrorist financing (ML/TF) and of their obligations to combat these offences (AML/CFT). Between 2014 and 2017 the number of Suspicious Transaction Reports (STRs), generated by the obliged entities, increased by approximately 53%. Nevertheless, the ability of financial institutions to meet new legal or regulatory requirements can be questioned. The implementation of compliant business processes requires the collaboration of compliance managers, IT and legal experts. By modeling these processes, it will be easier for the stakeholders in their organizations to take appropriate actions and act accordingly against potential legal violations. In this master thesis, the attention is drawn to the AML regulations in Austria. In addition, reference models are derived that meet specific compliance requirements and could support the internal processes in the context of AML. Keywords: Anti-Money Laundering, KYC, CDD, Reference Modeling, Compliance Management, Financial Sector xi xii Contents Kurzfassung ................................................................................................................................................. ix Abstract ........................................................................................................................................................ xi Contents ...................................................................................................................................................... xiii List of figures ............................................................................................................................................... xv List of tables ................................................................................................................................................ xv List of laws................................................................................................................................................... xvi List of abbreviations and acronyms .......................................................................................................... xviii Introduction.................................................................................................................................................. 23 Money laundering ........................................................................................................................................ 31 2.1. Definition ..................................................................................................................................... 31 2.2. Money laundering models ........................................................................................................... 33 2.2.1. Two-phase model by Bernasconi ............................................................................................ 33 2.2.2. The three-layer model ............................................................................................................. 34 2.2.3. Model by Zünd ......................................................................................................................... 35 2.2.4. Four sectors model by Müller .................................................................................................. 36 2.2.5. The cycle model by FED ......................................................................................................... 37 2.2.6. Summary ................................................................................................................................. 37 2.3. Examples of money laundering ................................................................................................... 38 2.4. Current trends in money laundering ............................................................................................ 41 2.5. Summary ..................................................................................................................................... 44 Jurisdiction over money laundering ............................................................................................................ 46 3.1. Territorial jurisdiction ................................................................................................................... 48 3.1.1. The criminal offence “money laundering” ................................................................................ 48 3.1.2. Predicate offences................................................................................................................... 50 3.1.3. Risk assessment at company level ......................................................................................... 52 3.1.4. Due diligence and risk assessment at customer level ............................................................ 55 3.1.5. Point of time of application of due diligence obligations ......................................................... 59 3.1.6. Reporting obligations .............................................................................................................. 60 3.1.7. The role of the authorities ....................................................................................................... 64 3.2. International collaboration ........................................................................................................... 71 3.2.1. The United Nations.................................................................................................................. 72 3.2.2. The European Union ............................................................................................................... 73 3.2.3. Financial Action Task Force (FATF) ......................................................................................
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