The Financial Market Authority will assume new competences for the monitoring and implementation of the EU’s international financial sanctions, such as those against Russia and Iran. The first law to be passed today, Wednesday 20 November 2024, by the newly reconvened National Council (Nationalrat)[1] transfers duties from the Oesterreichische Nationalbank (OeNB) to the FMA from 1 January 2026. The legislator expects more efficient monitoring by pooling competences under one roof, as the FMA is already competent for the prevention of money laundering terrorist financing.
The FMA’s Executive Directors, Helmut Ettl and Eduard Müller welcomed the decision passed by the National Council, remarking, “the bundling of monitoring of the prevention of money laundering and checking the enforcement of financial sanctions under the aegis of the FMA is a further milestone in our zero-tolerance policy for making Austria a clean financial centre.” “This reform brings supervision in this field together in a single authority, and strengthens transparency and increases it power in enforcement. Where financial sanctions are not observed, or are circumvented, there are serious consequences such as supervisory measures and severe administrative penalties including their being publicly disclosed”, remarked Ettl and Müller.
The package of laws that was passed by the National Council with a constitutional (two-thirds) majority implements the recommendations of the international money laundering at the Financial Action Task Force (FATF), which in some cases have been outstanding for a number of years, and the EU’s regulatory rules. Market participants that abide by the rules and observe the international code of conduct will benefit. For those participants wishing to pump assets arising from criminal activities through the Austrian financial system, and for oligarchs and criminals it will become even more difficult to gain a foothold in the Austrian financial market.
Further Provisions
Once the Sanctions Act 2024 has been published, the FMA will also be competent for the monitoring of proliferation financing. Proliferation is the broader distribution of atomic, biological or chemical weapons of mass destruction and the accompanying delivery systems (e.g. Rockets) as well as the products used to manufacture them (e.g. certain raw materials and raw products) including the necessary related know-how (e.g. for production purposes).
The FMA will cooperate closely in with the OeNB in the year ahead in monitoring observance of financial sanctions at credit institutions and financial institutions as well as payment service providers, before taking over these duties fully from 1 January 2026. The scope of supervised entities will be extended to cover insurance companies, investment firms and crypto-asset service providers, to guarantee that financial sanctions are comprehensively observed. Moreover, the provisions relating to the transparency of beneficial owners will be more precisely regulated, to prevent constructions used for circumventing the rules with regard to money laundering and sanctions.
Additional information:
- Budgetausschuss bringt neues Sanktionengesetz auf den Weg (Source: Parlamentskorrespondenz – 14 November 2024) (in German only)
- Report by the Budget Committee containing the justification of the draft legal act (in German only)
- Legal Text (from Parliament website – in German only)
Journalists may address further enquiries to:
Boris Gröndahl (FMA Media Spokesperson)
Telephone: +43 (1) 249 59-6010
Mobile: +43 676 8824 9995
E-Mail: [email protected]
[1] Sanctions Act 2024 (SanktG 2024; Sanktionengesetz 2024), Act regarding Amendments in relation to the FATF Country Inspection of 2024 (FATF-Prüfungsanpassungsgesetz 2024)