The Register of Beneficial Owners The Register was established for the purpose of preventing money laundering and terrorist financing and contains data regarding the beneficial owners of companies, foundations and trusts.
The Beneficial Owners Register Act (BORA) forms the legal basis for the Register of Beneficial Owners. The Act took effect on 15 January 2018, and reports can be sent to the Register via the Federal Unternehmensserviceportal. First-time reports to the Register have already been made. The Register can be inspected as of 2 May 2018.
Innovations introduced by the Register of Beneficial Owners
Up to now, only data on the legal owners of companies and foundation councils could be queried via the register of companies. Information on beneficial owners, which is essential for the prevention of money laundering and terrorist financing, has so far not been recorded separately. A beneficial owner is defined as those individuals to whom a company, foundation or trust can ultimately be economically attributed. The identification of beneficial owners is intended to make it more difficult for criminal persons and organisations to participate in real economic life with the criminally obtained assets.
In addition, until now there has been no database containing data on the relevant legal entities from the register of companies, the register of associations and the federal and state registers of charitable foundations and funds. With the Register of Beneficial Owners, a central register has been established in implementation of Articles 30 and 31 in the version of the 5th Money Laundering Directive, in which the beneficial owners of companies, foundations and trusts are entered.
Current status of implementation and future innovations
The register was set up on 10 January 2018. Since then, reports can be submitted to the register electronically. Automatic data reconciliation with the respective master registers and the central register of residents significantly reduces the manual input effort and significantly increases data quality.
Since 2 May 2018, certain companies subject to obligations under their professional codes of practice to prevent money laundering and terrorist financing have been able to inspect the Register of Beneficial Owners. This inspection is provided by an application accessible via the Business Service Portal, the WiEReG Management System. The extracts from the register have been specifically adapted to the requirements of the obligated parties and comprise many innovative elements, such as a graphic representation of the relevant domestic shareholding structure.
With the amendment to implement the 5th Money Laundering Directive, extensive options for integrating the Register of Beneficial Owners (BORA) into commonly used law firm software products and customer management programs will now be offered from 10 January 2020. Via a change management service, obligated parties can get information about changes in the beneficial owners of their customers in order to keep the beneficial owners up-to-date.
Also since 10 January 2020, public extracts from the register containing the information on beneficial owners required by the 5th Money Laundering Directive can be retrieved.
From 11 March 2020 on, extracts in the PDF and XML formats will be available via the web service for obligated parties, enabling many innovative functionalities and digital processes to be implemented on the part of the obligated parties.
By 10 November 2020, the Register of Beneficial Owners is to be expanded into a central platform for storing the documents required to identify and verify beneficial owners (compliance package).
Due to this very extensive and user-friendly functionality and the comprehensive measures taken to ensure data quality, the Register of Beneficial Owners is considered an international best practice and is presented to international delegations on a regular basis.
Benefits of the register
The Register of Beneficial Owners is a hub for extensive information on the beneficial owners of legal entities domiciled in Austria. Previously, this information on beneficial owners, which is essential for the prevention of money laundering and terrorist financing, was not centrally available, as individuals as well as legal entities are entered as shareholders in the register of companies. In addition, company shares held in trust may also result in beneficial ownership of the trustor, who in this case must also be entered in the register. With regard to private foundations, in future all beneficiaries will be entered in the register, i.e. also those who are not listed in the foundation deed. Thus, the Register of Beneficial Owners contains much more information than was previously available.
Already up to now, certain companies, such as credit and financial institutions, lawyers, notaries, CPAs and tax advisors, and some companies subject to the Trade Regulation Act have been obligated to determine the beneficial owners of their customers or clients. This obligation arises from the specific due diligence obligations to prevent money laundering and terrorist financing, which is why these companies are also referred to as “obligated parties” in the BORA. The extracts from the register provide these companies with a simple and efficient means of identifying the beneficial owners of their clients. On the basis of complete extended extracts from the register it is also possible to determine and verify the beneficial owners of a client under the conditions of Article 11 BORA. This provides a significant relief for these companies in sectors having low and medium money laundering risk, covering many of the typical standard business transactions. In sectors having high money laundering risk, the extended extracts, with their graphic mapping of the relevant shareholding structure, represent an ideal starting point for further verification activities to determine the beneficial owners.
In addition, as of 10 November 2020, the documents required for the identification and verification of beneficial owners can be submitted to the Register as a “compliance package” and queried by obligated parties, which means that processes critical for the companies’ subject to reporting (for example financing) can be handled much more quickly and efficiently.
Avoidance of unnecessary administrative burdens
The register comprises 358,894 companies designated as legal entities pursuant to Article 1 BORA. In order to keep the administrative expenses for companies subject to reporting as low as possible, Article 6 BORA provides for extensive exemptions from the reporting obligation. These apply if the beneficial owners are already entered in the register of companies or the register of associations. In total, 284,164 of the 358,894 legal entities are thus be exempt from the reporting obligation (as of 06 January 2020). These exemptions from reporting concern:
- General partnerships under Austrian law and limited partnerships under Austrian law, if all personally liable shareholders are individuals
- Limited liability companies under Austrian law, if all shareholders are individuals
- Commercial and industrial cooperatives
- Mutual insurance companies, small mutual insurance companies and savings banks
- Associations according to the Associations Act
Only if another person is the beneficial owner of a legal entity exempt from reporting, for example on the basis of a trusteeship agreement, the exemption from reporting does not apply and the legal entity is obligated to submit a report to the register.
All legal entities not exempted from the reporting obligation may submit their reports themselves electronically via the Business Service Portal of the Federal Government or appoint a professional party representative to identify, verify and report the beneficial owners.
Area of application
- The master data of the legal entities covered by the scope of application of the BORA are semi-automatically transferred from the register of companies, the register of associations and the supplementary register for other affected parties:
- General partnerships under Austrian law, limited partnerships under Austrian law
- Stock corporations under Austrian law, limited companies under Austrian law
- Commercial and industrial cooperatives
- Mutual insurance companies, small mutual insurance companies
- Savings banks
- European Economic Interest Groupings, European Companies (SE), European Cooperative Societies (SCE)
- Associations according to Article 1 VerG
- Private foundations under Article 1 of the PSG
- Foundations and funds according to Article 1 BStFG 2015
- Foundations and funds established on the basis of a state law, provided that the application of this federal law is provided for by federal state law
- Trusts and trust-like arrangements, if managed from within Austria
- Other legal entities whose entry in the register of companies is required pursuant to Article 2 XIII FBG
These legal entities are as a rule obligated to report their beneficial owners to the register. If there is an exemption from the reporting obligation, this is automatically indicated in the electronic reporting form.
Obligations of the legal entities
According to Article 3 BORA, the legal entities are obligated to determine and verify their beneficial owners once a year. In order to facilitate fulfilment of this obligation, Article 4 BORA provides for the obligation of the legal and beneficial owners to transmit the necessary documents and information to the legal entity.
Legal entities that are not exempt from the reporting obligation must report their beneficial owners within four weeks of their initial entry into the respective master register. In addition, legal entities that are not exempt from the reporting obligation must, within four weeks of the due date of the annual review, report any changes identified during the review or confirm the reported data.
Pursuant to Article 5 BORA, the legal entities themselves report the data on the beneficial owners to the register electronically via the Business Service Portal of the Federal Government. By registering with the Business Service Portal, each legal entity is clearly identified. It is also possible to have the report carried out by a professional party representative.
In order to make completion of the reporting form as easy as possible, an automatic reconciliation with the Central Register of Residents is carried out for beneficial owners with their principal residence in Austria and an automatic reconciliation with the register of companies, register of associations and supplementary register for other affected parties is carried out for top-level legal entities with their principal residence in Austria. All individuals with their principal residence in Austria are thus clearly identified by means of area-specific personal identifiers.
Inspection of the register
Inspection of the register is largely automatically activated for all companies that have to apply due diligence obligations to prevent money laundering and terrorist financing via the Business Service Portal of the Federal Government. These are:
- Credit and financial institutions
- Federal licensees under Article 14 and Article 21 of the Austrian Gambling Act (Glücksspielgesetz, GSpG) and licensees for gambling machines and betting operators who are established on the basis of a license granted by the state
- Lawyers and notaries
- CPAs and tax advisors
- Accountants, bookkeepers and payroll accountants
- Traders, including auctioneers, provided they accept payments in cash of at least € 10,000
- Real estate agents
- Management consultants
- Insurance intermediaries
- the Austrian Federal Financing Agency
- Service providers in relation to virtual currencies
Access is granted via officially signed extracts, whereby two different extracts are available: The simple statement according to Article 9 IV and the extended statement according to Article 9 V of the BORA. The special feature of the extended extracts is that they comprise a semi-automatic representation of all known participation levels and a comparison of the reporting data with the automatically calculated data of the register of companies.
Since 10 January 2020, public inspection of the Register of Beneficial Owners has also been provided for, which can be accessed directly via the homepage of the Federal Ministry of Finance. The public extracts contain the minimum information mandated by the 5th Money Laundering Directive.
User charges set by an ordinance of the Federal Minister of Finance are billed for the inspection of the register.
Maintenance of the Register of Beneficial Owners
The register is maintained by the register authority set up within the Federal Ministry of Finance. This not only protects the data protection rights of the data subjects, but also has extensive analytical capabilities for the purposes of ensuring the accuracy and completeness of the data and preventing money laundering and terrorist financing. The register is technically set up by the Federal Statistical Office of Austria on the basis of the business register for administrative purposes, which results in a maximum of synergy effects.
Measures to ensure data quality and sanctions
In order to contribute to the prevention of money laundering and terrorist financing, it is necessary to ensure adequate quality of the data stored in the register. Since 10 January 2020, the implementation of the 5th Money Laundering Directive has provided for the following measures to be taken by the register authority for the purposes of ensuring that the data stored in the register is adequate, accurate and up-to-date:
- semi-automatic analysis of the reports with the purpose of classifying them into risk categories and identifying potentially incorrect reports
- random-sample checking of incoming reports on the basis of risk analysis and, in addition, after a random selection,
- continuous monitoring of the incoming reports and random-sample checks of those legal entities that do not replace a notice with a new report within six weeks,
- occasional and prospective performance of analyses
In addition, the locally responsible tax authority semi-automatically threatens to impose a fine under Article 111 of the Federal Fiscal Code (Bundesabgabenordnung, BAO) with the setting of a grace period if a report is not made. If the report is made within the set grace period, the fine will not be imposed.
Deliberate violations of the reporting obligations are punishable as financial offences with a penalty of up to EUR 200,000 in the case of an intentional offence. A grossly negligent violation of the reporting obligations is sanctioned with up to EUR 100,000.
In addition, the following measures are also taken to ensure accuracy of the data stored in the register:
- Use of innovative, self-completing reporting forms, which largely prevent incomplete reports by means of stored rules.
- When reporting beneficial owners with their principal residence in Austria, a reconciliation is made with the central register of residents so that only individuals who actually exist can be reported to the register. For these persons, it is sufficient to report their first name, surname and date of birth. A so-called area-specific personal identifier (bereichsspezifisches Personenkennzeichen, bPK) is determined for these persons.
- For all persons who are stored in the register with a bPK, continuous reconciliation with the central register of residents is carried out in order to semi-automatically transfer changes of name or residence and possible deaths to the register.
- For persons without a registered principal residence, the upload of a copy of an official photo ID is provided for in order to make it more difficult to report non-existent persons as beneficial owners.
- In the case of legal entities exempt from reporting, the data on their beneficial owners are continuously reconciled with the register of companies, the register of associations and the supplementary register, and any changes are semi-a
- tomatically carried over.
- In the case of top-level legal entities having their registered office in Austria, the data are carried over from the register of companies, register of associations and supplementary register upon report, and kept up to date on an ongoing basis.
- Obligated parties may submit a notice to the register if they are aware of an incorrect entry in the register. The notice appears on extracts from the register – without naming the obligated party – and results in the fact that a verification of the beneficial owners on the basis of an extended extract from the register is no longer possible. In addition, the legal entity is informed of the notice – without naming the obligated party – and is requested to check its data and make a new report.
In order to protect the data protection rights of the persons concerned, all data on queries and extracts are recorded. Obligated parties are not entitled to unrestricted inspection, but may access their customers’ data in the context of the application of due diligence obligations to prevent money laundering and terrorist financing. Professional party representatives may also have access for the purposes of advising their clients with a view to identifying, verifying and reporting the beneficial owners of their clients. In addition, anyone can obtain information on the data stored about them in the register from the register authority upon application.
Please follow the link below to apply for deletion under the General Data Protection Regulation (GDPR): here.
In the event of a particular risk situation, a restriction of access under Article 10a WiEReG can be requested directly from the register authority by post or by email to firstname.lastname@example.org. Please enclose with the application a detailed statement of reasons and documents demonstrating the interest of the beneficial owner worthy of protection. You can find more detailed information in the FAQs under “Restriction of access according to Article 10a BORA”