The amendment of the Austrian Law on the Ultimate Beneficial Owners Register (Wirtschaftliche Eigentümer Registergesetz) as part of the EU Financial Adaptation Act 2019 (EU-Finanz-Anpassungsgesetz 2019) was announced on 22 July 2019. This amendment provides for far-reaching changes of the Ultimate Beneficial Owners Register, implementing the 5th Anti-Money Laundering Directive on the one hand and resulting in improvements in user-friendliness on the other. The main changes that will come into force on 10 January 2020 are summarised below.
Up to now, access to the register has been reserved for authorities, certain groups of persons (e.g. lawyers, notaries, credit institutes) and other persons with a legitimate interest. In the future, anyone will be able to obtain an extract from the register of any legal entity. This extract contains the first name, last name, date of birth, nationality and country of residence of the beneficial owner(s).
Annual notification obligation
Currently, legal entities must review at least annually whether the data entered in the register is correct and complete. They need to identify their beneficial owner(s) and take appropriate measures to verify each beneficial owner's identity. The annual review must be documented. If there are no changes to the current entries in the register, no confirmatory notification is required.
In the future, a notification will be required at least once a year, even if there were no changes in the data registered. The reporting entity must register the changes identified during the review or confirm that no changes have occurred within four weeks of the due date of the annual review.
To ensure the accuracy and completeness of the registrations, the Austrian Ministry of Finance, as the competent register authority, will compare the data entered in the register with other publicly available data sources (e.g. Commercial Register, Register of Associations, Central Register of Residents) and review registrations received on a random basis. The register authority may at any time ask legal entities and their legal and beneficial owner(s) to provide information on the facts required for the assessment of beneficial ownership and to submit corresponding documents.
Extension of penalties
The penal provisions will be clarified and extended. A financial offence (fine of up to EUR 200,000 in the case of intent and of up to EUR 100,000 in the case of gross negligence) is committed by anyone who (i) makes an incorrect or incomplete notification and thereby fails to disclose beneficial owners, (ii) fails to comply with the notification obligation despite two requests, or (iii) fails to register a change in the data of beneficial owners within four weeks of becoming aware of the change.
A new penal provision is aimed at ensuring the retention of the documents necessary for the identification of the beneficial owner(s). Failure to keep copies of the documents and information necessary for compliance with the requirements to identify the beneficial owner(s) for at least five years after the end of the respective beneficial owner's ownership shall result in a financial offence (fine of up to EUR 75,000 in the case of intent and of up to EUR 25,000 in the case of gross negligence).
By Christopher Junger, Associate, Schoenherr