Customer obligations when using an account on behalf of others

If you open an account at a bank (current account, savings book account, securities account etc.), you are required to let the bank know whether you will use the account for your own money, or for other parties’ money (“on the account of others”, “held in trust”). If you intend to use the account on behalf of others, then you are required to prove the identity of the trustor, i.e. The person for whom you are holding money in your account, to the bank

Examples of using an account for holding money in trust

  • If you pay another person’s money into your account in cash, and use this money to make payments for that person via your account.
  • If another person transfers money to your account so that you can transfer this money onwards for that person to their account.
  • If you invest the money of another person (such as on the basis of a trust arrangement) on your account, irrespective of whether it is a current account, savings account or securities account.
  • If you invest the money of a legal person, for example for a company with the legal form of a GmbH of which you are the Chief Executive Officer, in your private current account or savings account.
  • Practical example: An acquaintance asked you to receive and store money on your account on their behalf, as they are currently party of ongoing insolvency proceedings, and they do not wish someone to find out about the existence of this money.

When you open an account, you are usually requested in the form for opening the account to state, by ticking a check box, to state whether you wish to operate the account “on your own account” or “on the account of others”, or “on behalf of others”. You should also state that the account is to be used for money held in trust, even where you only partially intend to use the account for this purpose, such as for individual payments. If you only decided at a later point in time to use your account on the account of others, you are required to inform this to the bank prior to your account being used for storing others’ money for the first time.

It is mandatory to inform the bank about the existence of a trustee arrangement. If you fail to do so, an administrative penalty may be imposed against you. In the event that it suspects that the account is being used for a trust arrangement, the bank is obliged to the report this to the Financial Intelligence Unit (Geldwäschemeldestelle), housed at Criminal Intelligence Service Austria (Bundeskriminalamt).