Inclusion of virtual currencies in the prevention of money laundering: certain providers subject to FMA supervision from 10 January 2020
From 10 January 2020 digital currencies will be included in the European regime for the prevention of money laundering and terrorist financing. Providers of certain financial services of such crypto-assets are required to register with the competent supervisory authority – for Austria this is the Austrian Financial Market Authority (FMA). The following services are subject to the requirement to register: the issuance and selling of virtual currencies as well as transferring them, trading and exchange platforms for them (irrespective of where virtual currencies are to be exchanged between one another or for legal tender payment instruments or vice versa) as well as providers of custodian wallets. Such providers are required with effect from 10 January 2020 – as is already the case for credit institutions and financial institutions – to comply with the due diligence and reporting obligations for the prevention of money laundering and terrorist financing. Unregistered providers may no longer offer their service in Austria from this date onwards. Applications for registration have been able to be submitted to the FMA since 1 October 2019.
Strict due diligence obligations for the prevention of money laundering
Registered providers thereafter have to notify the FMA of every change in the registered office of the company, the name of the company, its directors, services and any other additional significant information. Where the FMA determines that the provider is not complying with the requirements set out in the Financial Markets Anti-Money Laundering Act (FM-GwG; Finanzmarkt-Geldwäschegesetz) or that the personal suitability of the provider (its CEO) or its beneficial owner is not satisfied, then the FMA may prohibit an intended registration or make revoke an existing registration. A fine of up to € 200,000 is prescribed in the event that a provider fails to make the registration,
In the case of business relationships and transactions of the provider that is subject to the FM-GwG to high-risk third countries, enhanced customer due diligence must also be applied for the prevention of money laundering. In such cases, in the future approval shall be required to be obtained from the management level prior to the establishment of or continuation of such business relationships. The FMA may prescribe risk mitigating measures for such business relationships and transactions by means of a Regulation.
The new rules are enshrined in the 5th Anti Money Laundering Directive (Directive (EU) 2018/843), which has been transposed in Austria by the Financial Markets Anti Money Laundering Act (FM-GwG; Finanzmarkt-Geldwäschegesetz).
Information about who is required to register, how such an application should be submitted and what documents are to be submitted with the application can be found on the FMA Website.
Journalists may address further enquiries to:
Klaus Grubelnik (FMA Media Spokesperson)
+43 / (0) 1 / 24959-6006
+43 / (0) 676 / 88 249 516