Terrorist Abuse of Charitable Sector -

UNCLAS VIENNA 000186

SIPDIS, SENSITIVE

STATE FOR EUR/CE, EEB/ESC/TFS
TREASURY FOR TFFC/KATHERINE LEAHY

E.O. 12958: N/A
TAGS: EFIN KTFN PTER ETTC PHUM EAID AU
SUBJECT: Terrorist Abuse of Charitable Sector -
Austria

REF: STATE 5834

Sensitive but unclassified - protect accordingly.


1. (SBU) Post discussed reftel points with Austria's
Finance Ministry (Elisabeth Ottawa, terrorism
financing coordinator and FATF representative,
Financial Markets Directorate) and Interior Ministry
(Sabine Klinglmair, head of the International
Affairs Department),soliciting views on charities
in Austria.


3. (SBU) Our discussions were productive and raised
awareness. Ottawa and Klinglmair were sympathetic
to the "alternative relief" concept, but gave no
indication that the GOA will take similar
initiatives in the near future. In Austria, the
2002 Law on Associations (as amended in 2007) covers
all nonprofit organizations (NPOs) including
charities and religious associations and implemented
FATF Special Recommendation VIII.


4. (U) Austrian law mandates that organizations
register and regulates their establishment, bylaws,
organization/management, registration, auditing, and
accounting requirements. Special provisions apply
to associations whose finances (donations, revenues,
expenditures) exceed a certain threshold. Those
with a balance sheet over EUR 3 million ($4.41
million at the 2008 exchange rate) or annual
donations of more than EUR 1 million ($1.47 million)
must appoint independent auditors to review and
certify the financial statements. Publicly
soliciting donations requires advance permission
from the authorities. Austria follows FATF best
practices in its accounting rules as well as a
"quality certificate" issued by the Austrian Federal
Economic Chamber.


4. (U) The Central Register of Associations offers
basic information on all registered associations in
Austria free of charge via the Internet. Financial
institution customer identification procedures and
due diligence obligations are an additional layer to
monitor charities and detect money laundering or
terrorist financing. Since charities can apply for
tax exemption, tax authorities provide another layer
of control.


5. (SBU) Ottawa said GOA authorities feel that the
law on associations is sufficient and that the
charitable sector is transparent. An upcoming
amendment to the law will implement sanctions for
non-compliance, according to Ottawa. Ottawa and
Klinglmair confirmed that there are no regular or
routine checks made on NPOs established in Austria.
Comprehensive monitoring is impossible due to the
large numbers and privacy/data protection
considerations.


6. (SBU) The MoI investigates associations upon
receiving complaints or other information that an
organization is not registered, is violating its by-
laws, etc. Where terrorism or terrorism finance is
suspected, the MoI turns investigations over to the
Federal Agency for State Protection and
Counterterrorism (BVT),which can obtain information
from other authorities -- information sharing among
authorities works well. Klinglmair opined that most
charities are cooperative and there have been few
cases involving serious crimes such as terrorist
financing.

YAP