Preventing money laundering is an important tool in combating organised crime and terrorist financing. Being able to follow the money trail helps investigating authorities to find clues and and evidence of criminal activity. Transactions in cash do not leave much of a trail. This is why it is important to determine and verify the customer’s identity when large cash payments are made. In the latest edition of its consumer information series “Let’s talk about money” on “Cash is king”, the Austrian Financial Market Authority (FMA) explains when and why consumers are required to prove their identity when conducting transactions and making payments.
Some providers of goods or services are legally obliged to conduct careful checks about the identity of their customers from certain amounts. They are required to request proof of identity, and are required to make a photocopy of the identification document. Documenting transactions also helps to prove the origin of the money.
Customers are not only required to identify themselves only when conducting banking transactions. Their identity must also be determined and documented when conducting other types of business. This is required in any case:
- If they commence a new business relationship with financial services providers like banks, insurance companies or investment firms, are depositing more than € 15,000 in total, or where indications exist that justify a suspicion of money laundering.
- If they make a payment of at least € 10,000, regardless of whether it is in cash of not, when dealing in art.
- When they make purchase of over € 10,000, regardless of whether for antiques, a car, cosmetics, jewellery, electronic devices, furniture, groceries or in a specialist pet store.
- If they visit a licensed gaming house, irrespective of whether or not they actively gamble.
- If they make use of certain services from advisory professions, such as lawyers, notaries, tax advisors or auditors, especially in the case of financial or real estate transactions of a value exceeding € 15,000.
Additionally, banks, financial institutions, and certain commercial traders are obliged to report suspicious transactions – such as unusually large transactions compared to transactions they usually conduct or the customer’s suspicious behaviour – to the competent authority.
Compliance with due diligence obligations for preventing money laundering not only serves to prevent illegal activities and to protect the integrity of the financial system, but also protects customers by strongly reducing the risk of fraud and identity theft.
This edition of “Let’s talk about money” can be found on the FMA website at: https://redenwiruebergeld.fma.gv.at/en/cash-is-king
Journalists may address further enquiries to:
Boris Gröndahl