The statutory due diligence obligations of credit and financial institutions concerning the combating of money laundering and terrorism financing are stipulated in Sec 40 seq of the Austrian Federal Banking Act (Bankwesengesetz). They are based in particular on the “3rd Money Laundering Directive” of the European Union. On 5 June 2015 the “4th Money Laundering Directive”, which provides for a number of innovations, has been published in the Official Journal of the European Union. The 4th Money Laundering Directive shall be implemented into national law until 26 June 2017 at the latest.

In Austria, the 4th Money Laundering Directive will be implemented by means of the new Financial Market Money Laundering Act (Finanzmarkt-Gelswäschegesetz – FM-GwG), where a draft government bill is already drawn up (thus, the due diligence obligations currently stipulated in the Austrian Federal Banking Act will be “shifted” into the new FM-GwG and according to the 4th Money Laundering Directive new formulated). According to the draft government bill the FM-GwG shall enter into force on 1 January 2017.

Compared to Sec 40 seq Austrian Federal Banking Act the draft government bill does not provide for “completely new” due diligence obligations for credit and financial institutions concerning the combating of money laundering and terrorism financing. However, many of the already existing obligations are to be adapted. The following amendments shall be highlighted:

(i) Enabling of online identification of customers by means of a video-based electronic procedure (the increased risk arising from the fact that the customer is not physically present has to be compensated by the assessment of additional data);

(ii) abolition of standardized cases of simplified due diligence obligations and a considerable limitation of standardized cases of extended due diligence obligations (extension respectively individualization of the “risk-based approach”);

(iii) application of extended due diligence obligations in respect of politically exposed persons also in relation to domestic politically exposed persons;

(iv) significant increase of administrative penalties (up to EUR 5 million or 10% of total annual turnover);

(v)  implementation of an analysis database by the Anti-Money Laundering Registration Office.

Credit and financial institutions shall therefor analyze which changes are to be implemented in relation to their existing measures to combat money laundering and terrorism financing.