The Financial Action Task Force (FATF) placed Austria in enhanced follow-up after finding the country’s framework for investigating and prosecuting money laundering remains weak more than a decade after similar concerns were first raised.

The finding comes despite Austria’s measurable progress on transparency of beneficial ownership and financial-sector supervision, the intergovernmental group said in its latest mutual evaluation report of the European nation published Wednesday. 

The report, adopted by the FATF plenary in February and based on an on-site visit conducted in the summer of 2025, said Austria’s restrictive interpretation of its money-laundering offense “continues to limit the investigation and prosecution of standalone and third-party ML cases,” and that practitioners face significant legal and operational challenges that were first flagged in Austria’s 2016 evaluation but “remain unaddressed.”

The Paris-based watchdog said Austria has “no cases where sanctions for ML have been applied against a legal person,” and that money-laundering convictions, while up over the past several years, remain low relative to convictions for predicate offenses.

The watchdog rated Austria moderate on six of 11 effectiveness areas, including risk assessment, money-laundering investigations and prosecutions, asset recovery, financial intelligence, and terrorism- and proliferation-financing sanctions. Austria has substantial effectiveness when it comes to financial-sector and virtual-asset supervision and terrorist-financing investigations, FATF said. 

Beneficial-ownership transparency was rated high, the only such rating in the report, with the intergovernmental organization describing Austria’s multi-pronged register-based system as “exemplary.”

On technical compliance, all but one of the FATF’s 40 recommendations were rated largely or fully compliant, the report said.

Outside of casino supervision and, to some extent, supervision of lawyers and notaries, FATF concluded that oversight of designated non-financial businesses and professions “suffers from major shortcomings, including fragmentation, shortage of resources to effectively undertake supervision, and few remedial actions.”

Austria, which the FATF described as a “regional and international financial centre” and a “gateway” to Central, Eastern and South Eastern Europe and the Commonwealth of Independent States, is exposed to laundering risks tied to organized crime, fraud, tax offenses, drug crimes, foreign and domestic proceeds of corruption, and smuggling, the report said. The watchdog added that the country’s cash-intensive eurozone economy makes it “attractive for the laundering of foreign and domestic proceeds of crime and their investment in high-end real estate and luxury goods.”

The FATF said the growing use of virtual assets and Austria’s virtual-asset service provider sector present high money-laundering and terrorism-financing risks, while international cooperation outside the European Union, particularly involving the FIU and asset recovery, “is not commensurate” with Austria’s role as a financial center and CESEE gateway, the report said. 

The number of information requests sent abroad by the Austrian Financial Intelligence Unit fell sharply during the review period to 40 in 2024, “which is out of line with the country profile,” the report noted. 

The FATF report includes a roadmap of key recommended actions Austria must implement under the enhanced follow-up process. Among the highest-priority items: deepening the country’s understanding of money-laundering and terrorist-financing risks, increasing the volume and sophistication of money-laundering investigations and prosecutions, scaling up asset confiscation, strengthening DNFBP supervision and ensuring the FIU has sufficient resources and operational independence.