As one of the responses to the Panama Papers revelations, the European Commission has prioritized the fight against money laundering and terrorism financing. The 5th Anti-Money Laundering Directive (“5th AMLD”) was published in the Official Journal of the European Union on 19 June 2018 and Austria as well as the other EU Member States must have transposed this Directive by 10 January 2020.

The main parts of the 5th AMLD, such as regulation of service providers in relation to virtual currencies, limitation of business relationships or transactions including high-risk third countries and public access to the beneficial owners register, have been implemented into Austrian law with EU Financial Adaptation Act 2019 of 22 July 2019 (federal bill no 62/2019).

Two key areas of the 5th AMLD and its transitions into the laws of the Member States are,

• the thresholds for use of prepaid cards are set with EUR 150 (4th AMLD EUR 250) in over the counter and EUR 50 (4th AMLD EUR 100) in online transactions;
• AML rules are expanded to additional “gatekeepers”; entities which provide services that are in charge of holding, storing and transferring virtual currencies, persons who provide similar kinds of services as to those provided by auditors and persons trading in works of art, will have to identify their customers and report any suspicious activity to the Financial Intelligence Units; Bitcoin, Ethereum, Ripple and thousands of other crypto currencies are no longer excluded from the rules on money laundering and terrorist financing.Pursuant to Sec 32a of the Financial Market Money Laundering Act any service providers that are in charge of holding, storing and transferring virtual currencies (defined as “service providers in relation to virtual currencies”), which include also wallet services and mining companies, intending to provide the services in, from or for the territory of Austria, shall apply for registration with the Austrian Financial Market Authority (FMA) which has in the meantime issued for this purpose a guideline for registration. If, on the basis of the information submitted, together with the application of the registration the FMA concludes that it has concrete indications that the requirements of the Act cannot be met, or if the FMA has doubts as to the personal reliability of the managing directors, the natural person holding a qualified participation, or those intending to act as such a service provider, the FMA shall not execute the registration. Sec 32a of the Act is entered into force on 1 October 2019 with the provision that the obligation to register will enter into force on 10 January 2020.

In respect to other gatekeepers, such as persons trading, storing or acting as intermediaries in the trade of works of art, where the value of the transaction or a series of linked transactions amounts to EUR 10,000 or more (in the 5th AMLD newly included in the definition of “obliged entities”) and the reduced thresholds in respect of over the counter transactions with non-reloadable payment cards to EUR 150 (from EUR 250 pursuant to the 4th AMLD) as well as the reduced threshold for cash withdrawals and online payments to EUR 50, Austria is still obliged to fully implement the 5th AMLD (beside other deficiencies as argued by the European Commission in the pending infringement proceedings against the Republic of Austria).