Legal basis

The legal basis is made up of provisions at European level in the form of directives and regulations and at national level in the form of laws and regulations.

Legal basis in Austria

Financial Market Money Laundering Act

With the implementation of the 4th Money Laundering Directive in Austria, the regulations for the prevention of the use of the financial system for the purpose of money laundering and terrorist financing for credit and financial institutions were summarized for the first time in one law, the Financial Market Money Laundering Act (FM-GwG), which has given the Financial Market Authority a uniform and clear legal basis for its supervisory activities. There are also provisions in the Trade Act, the Gambling Act and the Lawyers' and Notaries' Act, the Public Accountant Profession Act and the Accounting Act among others. These provisions place great emphasis on the "know your customer" principle, which is intended to deprive money launderers of the advantage of anonymity.

In Austria, every customer who:

• enters into a permanent business relationship with a financial institution (in the classic case of opening a savings account);
• carries out a transaction worth at least EUR 15,000 that does not fall within the scope of a permanent business relationship;
• makes a deposit to or a withdrawal from savings deposits if the amount to be deposited or withdrawn is at least EUR 15,000;
• raises suspicion of money laundering or terrorist financing and if there are doubts about the identification data already received.

Identification is carried out by means of an official photo ID. If the customer is a minor or legal entity, in addition to the customer's own identity, the power of representation and the identity of the person represented must also be proven. The identity of the settlor must also be disclosed in the fiduciary relationship.

If there is a suspicion of money laundering or terrorist financing, a report must be submitted to the Austrian Financial Intelligence Unit at the Federal Ministry of the Interior.

Legal basis in the EU

An EU directive cannot be applied directly, but must be transposed into national law.

Directive (EU) 2015/849 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing (4th Anti-Money Laundering Directive) was published in the Official Journal of the EU on June 5, 2015 and had to be transposed into national law by June 26, 2017. In the financial sector, this was done through the Financial Market Money Laundering Act, which came into force on January 1, 2017, and the Beneficial Ownership Register Act. Implementation for obligated parties in the non-financial sector took place through the amendment of the Lawyers' Act, the Disciplinary Statute for Lawyers and Trainee Lawyers, the Notaries' Act, the Gambling Act, the Trade Act, the Public Accountant Profession Act and the Accounting Act. To supplement the 4th Anti-Money Laundering Directive, the Commission Delegated Regulation (EU) 2016/1675 identifies high-risk third countries with strategic deficiencies. The currently valid consolidated version can be accessed via the link.

Directive (EU) 2018/843 (5th Anti-Money Laundering Directive) amending Directive (EU) 2015/849 (4th Anti-Money Laundering Directive) was published in the Official Journal of the EU on June 19, 2018 and must be transposed within the general transposition deadline of January 10, 2020. Implementation has been completed with the EU Financial Services Amendment Act 2019 (Articles 16 to 18), Federal Law Gazette I No. 62/2019.

Regulation (EU) 2015/847 on information accompanying transfers of funds was published in the Official Journal of the EU on June 5, 2015 and will apply from June 26, 2017. The Funds Transfer Regulation replaces Regulation (EU) No. 1781/2006 on information on the payer and the payee and determines the transmission and verification of certain information on the payer and the payee in payment transactions. This is intended to ensure that transfers of funds can be traced seamlessly. Due to numerous amendments, a new version was published, namely Regulation (EU) 2023/1113.

Regulation (EU) 2018/1672 on controls of cash entering or leaving the Community implements FATF Recommendation 32. It requires travelers entering or leaving the Community with cash of EUR 10,000 or more to declare this amount to the customs authorities. This obligation to declare is intended to prevent illegal cash movements in order to prevent illegal activities such as money laundering and terrorist financing.