On 18 December 2018 the Austrian Financial Market Authority (FMA) published its new FMA Circular “Due Diligence Requirements for the Prevention of Money Laundering and Terrorist Financing”. The effectiveness and efficiency of the prevention of money laundering in the Austrian financial market should be further increased by means of transparent and strict requirements for supervised entities.
The publication comes at the end of a year that has been marked in several European countries by severe money laundering scandals. The FMA wishes to use this FMA Circular to further distance the Austrian financial market from these negative developments. In recent years it has invested considerably in improving regulation and supervision in the field of the prevention of money laundering and terrorist financing. These efforts have recently started to bear fruits. The integrity of the market has increased overall, and with it so has the acceptance of regulation and supervision by the supervised entities. This is a positive and self-amplifying trend, as FMA Executive Director Klaus Kumpfmüller confirms: “Regulation and supervision for the prevention of money laundering and terrorist financing were previously only perceived in the financial market as a burden. The European scandals of recent years have however led to a change of mindset. Entities are now happy about transparent and strict standards, since such standards offer them legal clarity and therefore also permit them to conduct efficient and effective preventive work.” Fellow Executive Director Helmut Ettl adds: “The fact that our high standards have become considered as a calling card in the international financial market has also contributed towards acceptance: in an area that has become uncertain, Austrian entities are now perceived as having integrity.”
The addressees of the new FMA Circular are all entities in the financial market that are subject to the Financial Markets Anti-Money Laundering Act (FM-GwG; Finanzmarkt-Geldwäschegesetz). It provides entities with detailed explanations how the due diligence requirements set out in the FM-GwG are to be applied in practice and also takes into consideration the material case law rulings of the administrative and supreme courts. The FMA Circular specifically contains:
- Information about the point in time from when due diligence requirements are to be applied within a customer relationship
- Information about the application of simplified and enhanced customer due diligence; with regard to the latter the treatment of politically exposed persons (“PEPs”) and high-risk third countries is explained in great detail.
- Clarifications about the information that is to be collected during a business relationship about the customer and their beneficial owners, about the ongoing monitoring of the business relationship and the updating of information. This section addresses, among other matters, the use of the Register of Beneficial Owners.
- Explanations about checking the source of funds.
Particular attention is paid to the issue of video-based identification. Two years ago the FMA cleared the way for online customer identification by means of a Regulation. By doing so, it made the further development of digital and mobile business models easier for entities operating in the Austrian financial market.
FMA Circular 09/2018 on “Due Diligence Requirements for the Prevention of Money Laundering and Terrorist Financing” can be found on the FMA website in German at:
https://www.fma.gv.at/fma/fma-rundschreiben/
Journalists may address further enquiries to:
Mr. Stefan Maier
+43/(0)1/24959-6001
+43/(0)676/882 49 426