FinTech & AML
In order to ensure the stability and the image of the financial sector, provisions have also been introduced in Austria with regard to preventing the usage of the financial system for the purposes of money laundering and terrorist financing (further information can be found on the FMA Website). In accordance with these provisions, certain financial market participants (e.g. credit institutions, insurance undertakings, payment institutions, electronic money institutions etc.), as well as other players in addition to the aforementioned (e.g. certain businessmen or lawyers and notaries), are expected to comply with due diligence obligations for the combatting of money laundering and terrorist financing.
FinTechs are also expected to comply with these due diligence obligations for the combatting of money laundering and terrorist financing, if they provide activities that require a licence and are therefore subject to supervision by the Austrian Financial Market Authority (FMA). In this regard, the specific type of activities requiring a licence that a FinTech provides is not significant. The respective applicable laws (i.a. the Securities Supervsion Act 2018 (WAG 2018; Wertpapieraufsichtsgesetz 2018) the Payment Services Act 2018 (ZaDiG 2018; Zahlungsdienstegesetz 2018), the Alternative Investment Fund Manager Act (AIFMG; Alternative Investmentfonds Manager-Gesetz), the E-Money Act (E-Geldgesetz 2010) refer to the relevant provisions for the prevention of money laundering and terrorist financing contained in the Financial Markets Anti-Money Laundering Act (FM-GwG; Finanzmarkt-Geldwäschegesetz). In the event that a FinTech does not conduct any activities that require a licence, the obligation to comply with the provisions on the prevention of money laundering and terrorist financing may in certain circumstances exist on the basis of the Commercial Code (GewO; Gewerbeordnung) (e.g. in the case of specific activities as a retail tradesperson, a real estate agent, a consultant or an insurance broker). In these cases supervision is not conducted by the Austrian Financial Market Authority (FMA), but by the relevant competent administrative authorities.
In the event that FinTechs neither conduct activities that require a licence that are subject of supervision by the Austrian Financial Market Authority (FMA), nor activities where they are obliged under commercial law to comply with due diligence obligations for the combatting of money laundering and terrorist financing, under the current legislation they are not the intended addressee of these rules. It should however be highlighted that the (contractual) partners of FinTechs are often required to comply with the due diligence obligations for the combatting of money laundering and terrorist financing.
Following the entry into force of the Financial Markets Anti-Money Laundering Act (FM-GwG; Finanzmarkt-Geldwäschegesetz) on 01.01.2017, “video-based identification” is also possible in Austria. The necessary safeguards to be observed for a procedure for video-based online identification of customers was determined by the FMA in a dedicated Regulation. This Regulation entered into force on 03.01.2017.
In addition to the Act and the Regulation, English translations of which can be downloaded from the FMA Website, the following FMA Press Release also contains a brief overview: FMA enables online customer identification – 2 January 2017.
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