The introduction of the 4th AMLD has further tightened the existing provisions on the prevention of money laundering and terrorist financing.
Both money laundering and terrorist financing are punishable in Austria (Sections 165 and 278d StGB). According to Section 165 StGB, money laundering is committed by anyone who conceals the illegal origin of proceeds from certain criminal activities. The criminal offense of terrorist financing under Section 278d StGB is committed by anyone who provides (albeit legal) assets to carry out a terrorist act. The 4th AMLD is intended to prevent and hinder the use of the financial system for the purposes of money laundering and terrorist financing.
As this is an EU directive, it first had to be implemented nationally and is not directly applicable in the member states. The directive was implemented in Austria in various laws. Regionally, all EU member states are of course affected by the directive. In terms of personnel, the directive in Austria particularly affects all professional groups that carry out real estate transactions for their clients. Lawyers and notaries are affected in the same way as estate agents, tax consultants, banks, etc. In the following, particular reference is made to the obligations of lawyers in the implementation of the 4th RED.
The requirements for the prevention of money laundering have once again been massively tightened by the new directive for lawyers. Law firms are now subject to very specific requirements for checking whether a so-called risk exists. Each business relationship must be examined individually to determine whether there is a risk of money laundering. This assessment must be carried out ex ante (in advance). For example, the identity of the client must be established, their details must be checked, if necessary own investigations must be carried out, all details and steps must be documented and continuously monitored. The lawyer must report to the Money Laundering Reporting Office even if there is a suspicion that the transaction serves the purpose of money laundering or terrorist financing.
All in all, the directive on real estate transactions has created a great deal of additional work for law firms, the added value of which is not initially apparent. The obligation for lawyers to report their own clients in the event of suspicion could also conflict with the lawyer’s duty of confidentiality and loyalty towards his clients. However, the European Court of Justice does not share this view; according to the Court, the duty to report is in any case not contrary to fundamental rights.
Nevertheless, it cannot be ignored that lawyers have to comply with ever stricter regulations throughout Europe, which are not always easily compatible with their basic principles regarding the exercise of their profession.