Implications of the Fourth Anti-Money Laundering Directive

1. Access to payment accounts with basic features

18 September 2016 saw the entry into force of the Austrian Consumer Payment Accounts Act (Verbraucherzahlungskontogesetz, ‘VZKG’) (transposing Payment Accounts Directive 2014/92/EU) which, inter alia, grants all consumers who are legally resident in the European Union, including consumers with no fixed address, asylum seekers or consumers who are not granted a residence permit but whose expulsion is impossible for legal or factual reasons, the right to have a ‘payment account with basic features’ (for placing funds, withdrawing cash, executing payment transactions, making transfers). The aim of the regulation is to reduce the number of unbanked consumers and to enable the most vulnerable persons (from a social or economic perspective), such as recipients of a minimum pension, homeless people, unemployed persons, apprentices, asylum seekers and aliens, to fully participate in the social and economic life of society.

In accordance with the said right, it was made mandatory for retail banks, in principle, to enter into contracts for such payment accounts unless certain grounds for refusal apply (section 23(4) VZKG; with exceptions as provided for in section 24(1) VZKG), and as the requirements under the VZKG do not release credit institutions from their obligation to apply adequate measures for preventing money laundering and terrorist financing, this also imposed increased obligations on retail banks from the perspective of money laundering and terrorist financing. The aforesaid obligation, however, must not result in credit institutions imposing barriers to consumers; in particular, the argument of money laundering and terrorist financing must not be used as an excuse for denying consumers without assets, who would thus be unprofitable customers, access to a payment account.

2. Identity verification in practice

Banks must comply with numerous legal provisions that serve to combat money laundering and terrorist financing. The obligation to establish and verify the identity of customers (‘Know Your Customer’ principle) is a core obligation, which ensures that banks have sufficient information relating to the identity of their customers.

The VZKG provides that, upon the opening of an account, an official photo ID meeting the requirements of section 40(1) of the Banking Act (BWG) has to be presented, which is used by the credit institution to identify the customer in accordance with its statutory duties of care and diligence. If asylum seekers and tolerated persons do not have an official photo ID, the identity cards issued to them under sections 50 and 51 of the Asylum Act (Asylgesetz) and section 46a(4) of the Aliens Police Act (Fremdenpolizeigesetz) (Verfahrenskarte, Aufenthaltberechtigungskarte and Karte für Geduldete, respectively) are to be used for identification. According to the legislative records, such (merely temporary) documents, data or information must be ‘kept up to date’. But it remains unclear how this should be done: Although the banking industry tried to have that obligation to ensure up-to-dateness imposed on the consumers, this proposal has not been implemented in the VZKG. In our view, however, the bank – although in principle under an obligation to contract – is entitled to terminate the relevant business relationship by relying on section 40(2d) BWG if it is unable to comply with the statutory ‘Know Your Customer’ requirement (e.g. because the customer fails to co-operate). The intervals between the required updates will surely have to be determined on the basis of risk, within the meaning of the Fourth Anti-Money Laundering Directive; no clear regulation has been stipulated.