The Austrian Financial Market Authority FMA today published a “Circular on the risk-based approach to the prevention of money laundering and terrorist financing”. The circular, which is directed at credit institutions, financial institutions, insurance undertakings, investment service providers and payment institutions, is intended to serve as a guide to implementing the legal provisions aimed at optimising efficiency and effectiveness in the preventive battle against money laundering and terrorist financing. The risk-oriented approach makes use of the resources and the activities employed by supervised companies dependent on the risk of abuse for criminal purposes which is actually present.
Every company must first perform a two-level self-analysis of its risk factors. This entails classifying the company in terms of the products offered, its customers, the customers’ business transactions, the complexity of the transactions, as well as the company’s geographical location. Each customer must then be subjected to a risk analysis and classified according to a scheme comprising at least three levels.
On the basis of the risk analyses the company is finally required to decide on the appropriate measures for preventing money laundering and terrorist financing. These specifically include the methods for verifying the identity of the beneficial owner, for obtaining information on the purpose and intended nature of the business relationship and for conducting ongoing monitoring of the business relationship. The circular also describes how the statutory due diligence requirements are to be applied in practice. Examples are provided of cases where requirements may be applied less stringently or, conversely, where due diligence requirements must be applied more rigorously.
“This circular by the FMA already takes into account a number of recommendations made by the Financial Action Task Force against Money Laundering and the Financing of Terrorism, FATF, in the country report for Austria published only several weeks ago,” FMA Executive Directors Helmut Ettl and Kurt Pribil announced. “We are convinced that we are providing supervised companies with a highly valuable aid,” they went on to add.
For further information please contact
Klaus Grubelnik (FMA Media Spokesperson)
+43/(0)1/24959-5106
+43/(0676)/882 49 516