Obliged entities are required to appoint an Anti-Money-Laundering Officer (AML Officer) pursuant to Article 23 para. 3 of the Financial Markets Anti-Money Laundering Act (FM-GwG; Finanzmarkt-Geldwäschegesetz) and a Sanctions Officer pursuant to Article 23a para. 2 FM-GwG for ensuring compliance with the provisions of the FM-GwG.
The Anti-Money-Laundering Officer (AML Officer) or the Sanctions Officer is directly subordinate to the management body, reports directly to it, and has sufficient powers for the effective performance of their duties. Both functions are to be designed in such a way that ensures the independent and effective control of compliance with regulations in regulation to the prevention of money laundering, terrorist financing as well as for implementing financial sanctions.
Conditions for the performance of the key function
Persons[1] performing such functions are required to possess the necessary fitness and propriety.
Professional qualification (“fitness”) includes having an appropriate education, relevant professsisonal experienced as well as in-depth knowledge of the relevant legal frameworks and their practical implementation. This includes in particular:
- several years’ relevant working experience, especially at obliged entities of a comparable nature, size and complexity,
- education and training in the area of the prevention of Money Laundering and Terrorist Financing (ML/TF) and/or in the areas of financial sanctions,
- in-depth knowledge of the legal framework (especially the Financial Markets Anti-Money Laundering Act (FM-GwG) and the Sanctions Act 2024 (SanktG 2024)) as well as internal strategies, checks and procedures,
- an adequate understanding of the risks associated with the business model, especially the risk of its misuse for ML/TF purposes or for circumventing sanctions.
- experience in the identification, evaluation and management of risks in relation to ML/TF and/or financial sanctions.
Personal reputation (“propriety”) in particular requires integrity, legal compliance and good personal reputation. This may for example be proven by:
- a clean criminal record certificate,
- no severe or repeated breaches of regulations under supervisory law,
- reliable cooperation with supervisory authorities,
- clear and exemplary professional development.
Furthermore, key function holders are also central points of contact inter alia for law enforcement authorities and the Financial Intelligence Unit (Geldwäschemeldestelle). Obliged entities under the FM-GwG are required to ensure by means of taking the necessary precautions that key function holders are able to conduct their duties and activities on-site at all times, and that there are no unnecessary delays in doing so. This also includes the ongoing (written and oral) communication and cooperation with national authorities, such as the national Financial Intelligence Unit (Geldwäschemeldestelle / A-FIU), the Beneficial Owners Register Act (WiEReG; Wirtschaftliche Eigentümer-Registergesetz), the Directorate National Security and Intelligence Service (DSN; Direktion Staatsschutz und Nachrichtendienst) or law enforcement authorities.
An adequate knowledge of German is necessary for this purpose, since the communication with the supervisory authority as well as the conducting of the Fit & Proper Test generally are conducted in German. This is particularly necessary to ensure that legal requirements are observed, for correctly understanding and assessing matters that are relevant for supervision as well for guaranteeing the orderly performance of the key function – especially in the context of audits and reporting.
A lack of understanding or a limited ability to independently comprehend and assess official requests, legal requirements or factual matters in German may lead to misinterpretations, delays or inadequate responses, thereby increasing the risk of issues under supervisory law as well as breaches of obligations under AML or sanctions law.
The obliged entity is therefore required to ensure that either the AML Officer / Sanctions Officer or their deputy have such a written and spoken mastery of the German language to be able to guarantee that duties and activities are able to be performed at all times.
The obliged entity is required to conduct an internal Fit & Proper assessment prior to their appointment, and to document this accordingly. The obliged entity is required to monitor fitness and propriety on an ongoing basis, and where required to reassess it.
Notification of the Anti-Money Laundering Officer (AML Officer) and the Sanctions Officer to the FMA
Pursuant to Article 73 para. 1b no. 3 of the Banking Act (BWG; Bankwesengesetz) credit institutions of significant relevance are required to notify the the Austrian Financial Market Authority (FMA) in writing without delay about the appointment of the AML Officer as well as any change in personnel or the relevant conditions. All documents that are required for assessing their professional fitness and personal propriety (e.g. curriculum vitae, documents about training received, organisation chart, internal Fit & Proper assessment) must be attached to the notification. This also applies accordingly for the sanctions officer.
Forms are available for this purpose on the Incoming Platform (IP) (Article 23 para. 3 and Article 23a para. 2 FM-GwG and Article 73 para. 1b no. 3 BWG).
Fit & Proper Test Procedure:
The obliged entity first of all assesses the AML Officer and Sanction Officer’s suitability, which is reviewed on a case-by-case basis in the form of a Fit & Proper Test conducted by the FMA. An FMA Fit & Proper Test is in particularly held in the case of new appointments, whether reasons exist to doubt their suitability or on a risk-based basis. The procedure is as follows:
- Once a Fit & Proper Test is deemed to be necessary, an appointment is arranged; adequate time to prepare for it (usually around six weeks) is ensured.
- The test generally takes place at the FMA’s premisses, lasts for around 90 minutes, and is generally conducted orally in German. Several thematic blocks address reporting and due diligence obligations under the FM-GwG and SanktG 2024 (e.g. customer identification, risk assessment, ongoing monitoring, financial sanctions). Theoretical and practical question are used to assess the candidate’s ability to actually apply them.
- The relevant legal texts, regulations and FMA Circulars are recommended as preparatory reading.
After the test has been completed the result is assessed internally, and communication to the person being tested following the Fit & Proper Test. In the event that the candidate fails the test, a further test may be arranged (“extended Fit & Proper Test”); if the person holding the key function does not take the test or fails it, then the obliged entity is required to appoint a new AML Officer/Sanctions Officer without delay, otherwise supervisory measures are required to be imposed for establishing legal compliance.
These requirements and tests ensure that key function holders in the fields of anti-money laundering and financial sanctions are required to display the necessary fitness and propriety that are necessary for the effective implementation of statutory requirements.
Applicable Legal Bases
National legal basis
Obligation to appoint an Anti-Money-Laundering Officer (AML Officer) Article 23 para. 3 FM-GwG
Determining the responsible management body: Article 23 para. 4 FM-GwG.
Selection of employees: Article 23 para. 6 FM-GwG.
Obligation to appoint a Sanctions Officer: Article 23a para. 2 FM-GwG
Notification obligation for credit institutions of significant relevance pursuant to Article 5 para. 4 BWG: Article 73 para. 1b no. 3 BWG
ESMA and EBA Guidelines
Guidelines on internal governance under Directive 2013/36/EU (Format: pdf, Size: 828,3 KB, Language: English) (EBA/GL/2021/05)
ESMA Final Report: Draft technical Standards specifying certain requirements of the Markets in Crypto Assets Regulation (MiCA) – first package (Format: pdf, Size: 814,1 KB, Language: English) (ESMA18-72330276-1634)
FMA Circulars
[1] The fitness and propriety requirements listed also apply accordingly for their deputies.