WiEReG amendment brings significant changes

At the end of July 2023, the WiEReG amendment was published, which brings significant innovations and changes to the Wirtschaftliche Eigentümer Registergesetz (Law on the Register of Economic Owners). The amendment aims to strengthen the effectiveness of the register and also implement recommendations from the National Risk Analysis 2021. Selected aspects are presented in a summary below.

Illegality of public access to information and the associated consequences

The public access to the register of economic owners, which had previously been regulated, was restricted by a judgment of the European Court of Justice in November 2022 and found to be fundamentally unlawful, as the completely public access (under the 5th Anti-Money Laundering Directive) is incompatible with the right to respect for private and family life and the right to protection of the personal data concerned. Instead, the previous wording of the 4th Anti-Money Laundering Directive came into effect again, which provides for access in the event of a legitimate interest. A legitimate interest includes media outlets, civil society organizations involved in combating money laundering and terrorism financing, credit and financial institutions, as well as those individuals who wish to learn about the economic owners of their potential business partners.

The granting of the right of access is generally subject to a multistep procedure: first, an electronic application (via the BMF website) is required to request information from a specific legal entity, in which case the legitimate interest must also be demonstrated (this often means that, based on economic or personal factors, there is a sufficient interest in the economic owner of the legal entity). To facilitate faster access to the information where necessary, professional party representatives can also request WiEReG extracts on behalf of and on behalf of their clients. This can be significant, for example, in the event of an obvious legitimate interest, such as in the context of a property transaction.

Expansion of interdepartmental cooperation and information exchange

The previously lacking sufficient legal basis for the rapid and effective cooperation between the registry authority and other national and international authorities was created by the WiEReG amendment. Now (or since 1.8.2023), authorities such as the Anti-Money Laundering Office, KSW, FMA, WKO, the tax authorities or public prosecutors’ offices can cooperate and exchange and process data and documents relevant for the assessment of the economic ownership of legal entities, which relate to financial crimes or financial misconduct or penalties.

Automatic matching of the registry with sanction lists

The manual matching of sanction lists (such as i.e. in connection with the Ukraine war) with the Austrian registers typically represents a high administrative burden. The WiEReG amendment now (specifically with effect from 12.12.2023) ensures an automatic match with the main registers, making it possible to detect and analyze potential matches between the registers and sanction lists much more quickly.

Better risk-oriented oversight by the registry authority through expanded analysis capabilities and greater competence in document requirements

The amendment creates the possibility for tax authorities to access certain register data in order to create model-based analyses. In particular, this is intended to contribute to the detection of shell companies with potential shell managers and shell companies, as well as unreported trusts (as of 16 April 2024). Since 1 August 2023, the register authority can also request documents and information from legal entities to verify the statutory retention obligation under the WiEReG. Therefore, all documents and information relating to the economic owners must be kept, as they are necessary for understanding the ownership and control structure.

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