Austria shifts sanctions oversight to financial regulator in enforcement overhaul
Austria’s parliament has approved sweeping legislation transferring sanctions monitoring from the Austrian National Bank (‘OeNB’) to the Financial Market Authority (‘FMA’) and expanding oversight powers, with parliamentary correspondence indicating the move could help avoid ‘costs in the double-digit billion range’ if Austria fails its upcoming FATF review.
The 20 November parliamentary document notes the package is ‘immensely important for Austria,’ particularly given its ‘overall economic importance and reputation.’ The reforms, supported by political parties ÖVP, SPÖ, NEOS and Greens but opposed by FPÖ, implement FATF recommendations and EU guidelines while extending supervision to ‘insurance companies, investment firms and crypto asset service providers.’
According to the correspondence, ‘from 2026, the new provisions will be extended to all EU financial sanctions,’ including ‘political sanctions such as those against Russia.’ The package creates a legal basis for Austrian authorities to propose UN and EU sanctions designations and impose temporary national sanctions under certain conditions.
The document highlights that the current system where the OeNB ‘has brought in external auditors to monitor sanctions, which has led to conflicts of interest’ will be remedied. The new framework mandates risk management systems to prevent sanctions evasion and requires ‘transparency in private foundations.’
Opposition parties described the legislation as ‘urgent measures at the last minute,’ warning of unresolved data protection issues and ‘blank provisions in the penal provisions’ that could have ‘a detrimental effect on Austria as a place to work and do business.’
The package also implements FATF recommendations on proliferation financing through amendments to accounting, tax advisory and trade regulations, introducing extended due diligence obligations and ‘an obligation for payment service providers to provide information on the payer and the payee, including for crypto asset transfers.’
Austria’s next FATF country review is scheduled for July 2025, with the plenary discussion set for February 2026.
