One of the wealthiest countries in Europe and the world, Austria is a business destination for hundreds of multinational organisations including banks and fintechs. While Austria’s economic status attracts international investment, it also creates a range of criminal challenges, including money laundering and the financing of terrorism.
To address those threats and protect its financial system, the Austrian government has implemented a range of strict anti-money laundering (AML) and counter-financing of terrorism (CFT) regulations. As a member of the European Union, Austria’s AML/CFT landscape is aligned with the rest of the bloc – which means that it also implements the EU’s Anti-Money Laundering Directives.
In order to comply with Austrian AML/CFT regulations, companies in Austria must understand their regulatory obligations, and their relationship with regulatory authorities.
What is the FMA?
The Financial Market Authority (FMA) is Austria’s financial supervisory authority. Established in 2002, the FMA provides supervision for all financial service providers in Austria, including banks, insurance companies, pension companies and investment firms. The FMA works to ensure that Austrian companies comply with the country’s financial regulations and implement suitable internal measures and controls to detect and prevent money laundring and terrorism financing.
As an ‘integrated’ authority, the FMA handles all regulatory procedures ‘under one roof’ – from issuing licences to obligated entities and conducting ongoing supervision, to working with law enforcement authorities in AML/CFT investigations.
The FMA also works with its international counterparts, particularly those across the EU, to serve the interest of Austria, and to contribute to the global fight against money laundering.
What are Austria’s Key AML Regulations?
Austria’s EU membership requires it to implement the money laundering regulations set out in the Anti-Money Laundering Directives (AMLD) in its domestic AML/CFT legislation. Austria is also a member of the Financial Action Task Force (FATF) which imposes a number of fundamental AML/CFT requirements, including the need to treat money laundering as a crime, to establish a national AML/CFT supervisory authority, and for firms to take a risk-based approach to AML/CFT.
WIth those requirements in mind, Austria has criminalised money laundering under its criminal code and has implemented the following key AML/CFT regulations:
- The Financial Markets AML Act: The AML Act is intended to prevent the misuse of Austria’s financial system for money laundering and terrorism financing – and was introduced in 2017 following the EU’s Fourth AMLD. The Act requires companies in Austria to put suitable risk-based AML/CFT measures and controls in place and to report suspicious activity to the FMA.
- The Beneficial Owners Register Act: In response to the Fifth AMLD requirement that member states create publicly available beneficial ownership registers, Austria passed the Beneficial Owners Register Act.
The FMA has issued a range of supplementary AML/CFT regulations in order to address money laundering and terrorism financing threats, including:
- Regulation on Savings Associations (SpVV)
- School Savings Schemes Due Diligence Regulation (Schulspar-SoV)
- Online Identification Regulation (Online-IDV)
- Regulation on Due Diligence for Fiduciary Accounts (AndKo-SoV)
- Corporate Provision Funds Risk Analysis and Due Diligence Regulation (BVK-RiSoV)
- Life Insurance Due Diligence Regulation (LV-SoV)
How to Ensure Your AML Compliance in Austria
Following FATF Guidance, the FMA requires firms in Austria to put a risk-based AML/CFT solution in place to detect and address criminal threats. The risk-based approach requires firms to conduct risk assessments on individual customers in order to build an accurate risk profile and identify higher risk customers that warrant more intensive AML/CFT scrutiny. With those considerations in mind, AML compliance in Austria should entail the following processes:
- Identity verification: Firms should establish and verify the identities of their customers by collecting suitable customer due diligence information such as names, addresses, dates of birth, and relevant company information. Beneficial ownership should also be established.
- Transaction screening: Firms should screen customer transactions for signs of suspicious activity that may be indicative of money laundering.
- Sanctions screening: Firms must ensure that they are not doing business with the targets of international sanctions. Accordingly, they should screen customers against relevant international sanctions lists, including the EU consolidated list.
- PEP screening: Politically exposed persons (PEP) such as elected officials, government employees, or members of the military pose a higher risk of money laundering. Firms should screen their customers against PEP lists at onboarding and throughout the business relationship.
- Adverse media: Many news outlets report on AML/CFT risks factors, such as sanctions risk or involvement in organised crime, before that information is confirmed by official sources. With that in mind, firms should implement an adverse media screening solution in order to capture news stories from around the world that involve their customers. Adverse media screening software should be able to search across foreign language news sources and take into account the relevance and quality of those sources.
Recent AML/CFT Developments in Austria
While 6AMLD is now in effect, the EU recently announced an overhaul of its AML/CFT framework. The update will introduce ‘an ambitious package of legislative proposals’ and serve as an update to 6AMLD. As an EU member, Austria must implement the regulatory requirements of the updated 6AMLD, which include:
- The introduction of cross-border asset registers.
- A proposal for an Financial Intelligence Unit (FIU) joint analysis framework to aid cross-border AML investigations across the EU.
- New guidance on the type of information that should be held in beneficial ownership registers.
- The establishment of a public body with a duty of oversight over self-regulatory bodies.
- The introduction of National Risk Assessments (NRA) to be conducted every four years.
- New whistleblower protections including strengthened data privacy rules.
Next Generation AML Technology
Ripjar’s Labyrinth Screening solution has been designed to enhance the risk management process and make AML/CFT compliance in Austria faster and simpler. Harness next generation name-matching software to screen customers in real time, drawing data from global sanctions, watch lists and adverse media sources across 21 languages. Use AI-enabled AML technology to inform risk decisions and ensure your business stays ahead of its obligations in a changing regulatory landscape.
Contact us to discuss how Ripjar can support your AML compliance in Austria.
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