Financial Police take stock of a successful year in 2020

For the Financial Police, due to the coronavirus, 2020 presented a particular challenge. Nevertheless, the force succeeded in performing all its diverse roles aimed at protecting the labour market and honest business operators, and indeed in some areas even outperformed its achievements in 2019, as the current annual review has demonstrated. "Thanks to the targeted controls undertaken by the Financial Police, this past year too, yet again huge successes have been achieved in the fight against social security fraud, the organised shadow economy, tax evasion and illegal gambling. We are thereby ensuring fair competitive conditions, protecting honest business operators and strengthening the domestic economy. Specifically in challenging times such as these, fraud cannot be tolerated, and I congratulate the Financial Police on a very impressive result," declared Finance Minister Gernot Blümel.

Protection of the labour market

During the period January to December 2020, the Financial Police conducted 28,631 controls in the labour market, with a total of 70,285 individuals undergoing checks. In terms of the number of persons monitored, this represents an increase of over 29% on the same period in 2019.

This outcome is due to a number of factors, including the high-density checks undertaken in the new area of monitoring short-time work. The checks undertaken on firms, totalling 7,072, generated the following significant outcomes:

  •  3,816 notifications of discrepancies compared with subsidy applications to the Austrian Public Employment Service (AMS) (3,182) and to the Construction Workers' Fund (BUAK) (634)
  •  Notifications relating to 250 employees to the Social Security Fraud Task Force (Taskforce SOLBE) in connection with suspected benefit fraud
  •   In addition, in the context of checks on short-time work, the Financial Police identified 900 additional offences, such as the illegal employment of foreign nationals, undeclared labour, or wage and social dumping.

Combating wage and social dumping

A further focus aimed at securing the economic interests of the nation consists of monitoring operations in connection with the terms of the Anti-Wage and Social Dumping Act, with the aim of preventing distortions of competition through the unlawful conduct of businesses accessing Austria from abroad.

A posting quota of over 874,000 workers to Austria in 2020 signifies an increase of just under 28% compared with 2019. For this reason, particular attention was paid to this area of the labour market, which led to a total of 3,250 criminal complaints and a penalty volume of just under EUR 7 million. The entire labour market generated a total penalty volume of over EUR 20.2 million in 2020, with 8,060 criminal complaints filed.

Tax supervision measures showing effect

In the realm of tax supervision measures - in addition to a large number of records generated from checks on short-time working – 2020 saw the collection of just under EUR 16 million as a result of tax measures. Such measures ranged from the collection of tax arrears, confiscation and attachment, as well as asset seizures and assessments in relation to the standardised fuel consumption tax and vehicle tax. In terms of the standardised fuel consumption tax and vehicle tax alone, a figure of over EUR 2.1 million was posted.

Numerous fake companies uncovered

Combating social security fraud also constitutes a particular challenge. In 2020, the Financial Police processed 180 social security fraud cases as well as 130 cases of suspected fictitious companies, successfully prosecuting 73 of them for operating as sham undertakings. Here, it is clear that the strategy of fraudulent business operations has substantially changed; dummy companies are now 'equipped' with a working team of around 10 staff, but actually, such companies are often used to invoice 100 times the services actually provided. The aim through this subterfuge is to make it more difficult to identify such dummy operations, and furthermore, the findings made by the Financial Police are then contested by lawyers in order to deliberately prolong the existence of such businesses.

In addition, the Financial Police succeeded in identifying 24 dummy companies abroad which had succeeded in getting access to Austria. Their identification was achieved through the assistance and cooperation of international authorities.

Another increase in confiscated gambling machines

2020 confirmed the trend already observed, that the number of confiscated gaming machines is rising year on year. The Financial Police conducted checks on 637 businesses under the Gambling Act, and in the process removed 1,463 gaming machines from the market. This represents an increase of around 100 machines compared with 2019, which was already a busy year in terms of gambling controls. The volume of fines imposed totalled over EUR 32.2 million.

In addition to the legal and economic aspects, it is also the private tragedies surrounding gambling addicts and their families which make controls on illegal gambling an absolute necessity.

In 2020, the Financial Police have continued to show that effective controls are needed in order to protect businesses and service providers operating lawfully. Finance Minister Gernot Blümel summarised the situation thus: "The majority of businesses stick to the rules, and so it is all the more important for us to take targeted action against rogue operators. Through our assistance measures, we are helping businesses through this crisis and saving jobs. We will not tolerate this assistance being abused by a very few who seek to profit from the crisis."