LVMH limits to cash payments in Austria

The relevant legislation in Austria is the Austrian Trade Act (Gewerbeordnung). Anti-money laundering provisions on commercial traders ("Trader") have been implemented in the Austrian Trade Act, including the fifth European Anti-money Laundering Directive (Directive (EU) 2018/843).

Regarding the report to the Austrian Financial Intelligence Unit (Geldwäschemeldestelle), the goAML reporting web-portal via the Company Service Portal (Unternehmensserviceportal) is from 1 April 2021 the only channel for transmitting suspicious activity reports (see question 6 and 8). goAML replaces the previous PDF reporting form and the types of submission for reporting via goAML include:

• submission via the web form;
• (automated) Uploading XML messages and including an Excel transaction list defined by the Austrian Financial Intelligence Unit from which transactions are automatically imported into the database.

The Austrian Financial Intelligence Unit announced that from 1 April 2021 suspicious activity reports may only be made via goAML. General information regarding goAML can be found on the website of the Austrian Federal Office of Criminal Investigation (Bundeskriminalamt), https://bundeskriminalamt.at/308/start.aspx.

Furthermore, amendments to the Austrian Criminal Code will be made based on the 6th Anti-money Laundering Directive (Directive (EU) 2018/1673).

There are no limits on the maximum amount of cash under the Austrian Trade Act that a customer may use to purchase items in a store. However, if applicable, AML due diligence obligations must be met under the Austrian Trade Act. The provisions of the Austrian Trade Act on AML/CTF apply to Traders, including auctioneers, in the case of occasional transactions in cash of EUR 10,000 or more, irrespective of whether the transaction is carried out in a single operation or in several operations, which appear to be related.

Traders, including auctioneers, making or receiving payments of EUR 10,000 or more in cash, whether the transaction is carried out in a single operation or in several operations that are or appear to be related, must meet, in particular, the following due-diligence obligations:

• The Trader must take reasonable steps to identify and assess the risks of money laundering and terrorist financing, taking into account risk factors related to his customers, countries or geographical areas, products, services, transactions or distribution channels (i.e. a risk assessment).
• Risk assessments must be recorded in a comprehensible manner, kept up to date in an evident manner and made available to the authority upon request.
• Every client must identify himself and verification of a customer's identity is required before establishing a business relationship in case of cash transactions of EUR 10,000 or more, but also in the event of suspicion or doubts about the authenticity or appropriateness of a customer's identification data.

On 4 May 2016, the Governing Council of the European Central Bank decided that the EUR 500 note would not be issued after 2018. The Austrian Central Bank (Oesterreichische Nationalbank) issued the EUR 500 banknote until 26 April 2019.

There are currently no provisions on partial and/or related cash payments regarding AML under the Austrian Trade Act. In case of transactions of EUR 10,000 or more in cash, there are certain due diligence obligations for Traders, such as identification and verification of the customer before establishing a business relationship. Risk assessment is also required, as outlined in question 3.

The Austrian Trade Act outlines general reporting obligations towards the Austrian Financial Investigation Unit. A Trader must cooperate fully with the Austrian Financial Investigation Unit by immediately informing the Austrian Financial Investigation Unit on his own initiative of any suspicious transaction report if there is a suspicion or reasonable grounds to suspect money laundering or terrorism financing. A report should also be made in cases where there is a suspicion or reasonable grounds to suspect an attempted, imminent or ongoing transaction connected with money laundering or terrorism financing.

All suspicious transactions including attempted transactions must be reported. Austrian Trade Act provides for that the suspicious transaction report must be submitted in a common electronic format using the secure communication channels defined by the Austrian Financial Investigation Unit. The Austrian Financial Investigation Unit announced that suspicious transaction reports are to be submitted via goAML from 1 April 2021 (see in question 2). Where appropriate, the Trader must impose appropriate obligations on his managerial staff and employees. The Trader must provide the Austrian Financial Investigation Unit with all necessary information immediately upon request.

Furthermore, the Trader must implement adequate procedures, by which his employees can report infringements internally through a special, independent and anonymous channel that is proportionate to the nature and size of the Trader concerned.

The Austrian Trade Act does not in principle include a reporting obligation for cash transactions. However, if there is suspicious activity or reasonable grounds for suspicion, a report must be made to the Austrian Financial Investigation Unit.

The Austrian Financial Investigation Unit (Geldwäschemeldestelle) is a division of the Federal Office of Criminal Investigation (Bundeskriminalamt) pursuant to the Austrian Criminal Intelligence Service Act (Bundeskriminalamt-Gesetz), to which a report on suspicious transaction must be made.

Sanctions under the Austrian Trade Act may be imposed by the competent authority (Administrative Authority – Bezirksverwaltungsbehörde).

All suspicious transactions, including attempted transactions, must be reported to the Austrian Financial Investigation Unit via the goAML system. The Trader must provide the Austrian Financial Investigation Unit with all necessary information immediately upon request.

It should be noted that the Trader may not inform the customer concerned and third parties that information is being or has been transmitted or that an analysis of money laundering or terrorist financing is being made or may be carried out. The Trader should also impose a corresponding obligation on his managerial staff and employees.

Pursuant to the Austrian Trade Act, an administrative fine of up to EUR 30,000 may be imposed to anyone who fails to inform the Austrian Financial Investigation Unit immediately or to provide the necessary information.

A fine of up to EUR 20,000 may be imposed on anyone who fails to comply with other AML/CTF measures. In the case of particularly serious, repeated or systematic violations, or a combination thereof, of AML/CTF measures, the authority will impose the sanction of public disclosure of the natural or legal person and the nature of the infringement. In addition, the authority can impose a fine of up to twice the amount of the profits made as a result of the offence, if such profits can be quantified, or up to EUR 1 million.

In principle, the authority should publish on its website all legally binding decisions that impose an administrative penalty or sanction for breach of AML/CTF measures. At the same time, the authority must disclose the type and nature of the infringement and the identity of the persons responsible. (The publication should remain accessible on the website of the authority for five years.) This does not apply for decisions imposing measures of an investigative nature.

Recently, the possibility of electronic identification was introduced in the Austrian Trade Act whereby identification can be made, where available, by electronic means.

Furthermore, the Austrian Beneficial Owners Register Act provides for a compliance package, which means that a notary or lawyer as professional party representative, which determined and verified the beneficial owners of a legal entity in accordance with the requirements of Austrian Beneficial Owners Register Act, may transmit information and documents regarding the identity of the beneficial owners to the Registry Authority by electronic means via the Company Service Portal. In principle, the Trader may inspect the register of beneficial owners, but pursuant to the Austrian Beneficial Owners Register Act, the Trader may not rely exclusively on the information contained in the extract from the register. However, the Trader must proceed according to his own risk assessment and, if necessary, take further verification steps.