EN
OPINION OF THE EUROPEAN CENTRAL BANK
of 18 July 2002
at the request of the Austrian Ministry of Finance
on a draft Federal act amending the Austrian  Banking Act, Austrian Gambling Act and the
Austrian Capital Markets Acts
(CON/2002/19)
1. On 14 June 2002 the European Central Bank received a request from the Austrian Ministry of
Finance for an opinion on a draft Federal act amending the Austrian Banking Act, AustrianGambling Act and the Austrian Capital Markets Acts (hereinafter referred to as the 'draft act'). 
2. The ECBs competence to deliver an opinion is based on Article 105(4) of the Treaty
establishing the European Community and the second, fifth and sixth  indents of Article 2(1) of
Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bankby national authorities regarding draft legislative provisions 1, as the draft act concerns, inter
alia, means of payments and may affect the stability of financial institutions and markets and
the efficiency of payment systems. In accordance with the first sentence of Article 17.5 of the
Rules of Procedure of the European Central Bank, the Governing Council of the ECB hasadopted this opinion.
3. The draft act implements the Special Recommendati ons on Terrorist Financing of the Financial
Action Task Force on Money Laundering of 31 October 2001 (hereinafter referred to as the'FATF Special Recommendations'), which are part of the international efforts to combatterrorism. The draft act concentrates on Special Recommendations IV, VI and VII, theimplementation of which falls within the powers of the Austrian Ministry of Finance. The draftact, inter alia, includes provisions regarding the reporting of transactions suspected of being
related to terrorism and determines that in case of wire transfers and other cash transfers, theoriginator information must be verified at ever y step along the wire transfer chain and during
money transfers. Furthermore, the draft act implements Council Directive 91/308/EEC of10 June 1991 on the prevention of the use of the financial system for the purpose of moneylaundering 2, as amended by Directive 2001/97/EC of the European Parliament and of the
                                                     
1 OJ L 189, 3.7.1998, p. 42.
2 OJ L 166, 28.6.1991, p. 77.
2Council 3. The Austrian consulting authority is not under an obligation to formally consult the
ECB on its implementation of Directive 91/308/ EEC, as Member States are not required to
consult the ECB concerning the transposition of Community Directives into national laws(Article 1(2) of Decision 98/415/EC). This opinion, therefore, focuses on the implementation ofthe FATF Special Recommendations referred to above. 
4. First, the ECB would like to recall the commi tment of the Eurosystem to contribute to the
adoption, implementation and execution of measures preventing the use of the financial systemfor terrorist activities, as expressed in  the Governing Council's public statement of
1 October 2001. In order to maintain public confidence in the integrity of the financial system, itis of the utmost importance that financial systems do not benefit persons and organisationsassociated with terrorist activities. As a cons equence, the ECB welcomes the intention of the
draft act of combating the financing of terrorism more efficiently. In this context, the ECBwould like to put forward some specific co mments on the provisions of the draft act.
5. The draft act adds a new paragraph 10 to Article 40 of the Austrian Banking Act. According to
the explanatory notes, this provision implements FATF Special Recommendation VII, whichstates that originator information must be retained at every step along the wire transfer chainand during money transfers. Paragraph 10 provides that in the case of wire transfers and othercash transfers, credit and financial institutions must verify the name, address and, if appropriate,the account number of the originator on acceptance of the instruction, and must forward thisinformation to the next receiving institution durin g the completion of the instruction, so that the
information on the originator can be verified at ev ery step in the wire transfer or transfer chain.
The ECB notes that this provision could affect payments systems, as the amended Article 40 ofthe Austrian Banking Act, in case funds are transferred via a payment system, requires thepayment system to transmit all relevant information. 
With a view to fostering the adoption of meas ures to combat terrorist activities, the ECB
supports and promotes any initiatives for harmonisation in the area of payment messaging, inparticular with a view to making the inclusion of certain fields in a payment messagemandatory. However, the task of payment systems operators is to ensure the secure transmissionof information contained in a payment message. The information provided by the participants ischecked before processing, but is limited to checking that the relevant mandatory fields in thepayment message are properly filled in. The contents are not verified. Payment systemsoperators need to rely in this respect on the in formation provided to them by the originator of
the payment. The ECB understands that the provisions of the draft act do not imply anyrequirement for payment system operators to ensure that the originator information is
meaningful. The ECB welcomes this approach since such an obligation on payment systemsoperators would not improve current procedures imposed by the banking supervisory and anti-
                                                     
3 OJ L 344, 28.12.2001, p. 76.
3money laundering authorities on banks and non-bank financial institutions and other entities
under the FATF Special Recommendations. In addition the impact that such a requirementcould have on the smooth functioning and efficien cy of the payment systems would need to be
carefully considered. 
6. In addition, it should be borne in mind that at present originator and recipient information can
be transmitted directly from the sending bank to the receiving bank. As mentioned above, thepresence of mandatory originator and recipient information can be checked automatically by apayment system before a payment message is accepted for processing. During the transmissionand processing of a payment, the originator and recipient information does not necessarily haveto be forwarded to the settlement part of the payment system. Whether all or only part of thedata included in a payment message are forwarde d to this part depends on the nature of the
payment system. Therefore, the provision requiring the originator to be identified at every stepin the wire transfer or transfer chain should be understood as not necessarily involving thesettlement of the payment itself. 
7. The amendments to Article 41(1) included in the draft act impose reporting obligations when
the originator information for wire transfer orders or other money orders amounting to at leastEUR 2 000 forwarded by another credit or financial institution has not been included or isincomplete. If the originator information is merely incomplete and there is no suspicion ofmoney laundering or terrorist financing, the order may nevertheless be forwarded and at thesame time, the competent authority is informed. The ECB understands that the reportingobligations contained in the draft act apply to cr edit institutions and financial institutions only,
to the exclusion of payment systems operators. The ECB is in agreement with this approachsince it believes that payment systems operators should not be subjected to any requirement toreport missing information to the competent authorities. The payment system operator is not thebeneficiary of the payment but only in charge of processing the transfer order betweenparticipants. Moreover, a requirement at the level of the payment system operator wouldduplicate the notifications already received by the competent authorities from credit andfinancial institutions.
8. The ECB understands that the FATF plans to re-examine Recommendation VII in the months to
come, in order to make it more specific and facilitate its implementation. There is currently nothreshold in Recommendation VII and this will probably be one of the issues to be discussed.Since harmonised implementation is important, th e Austrian consulting authority might consider
waiting for the results of the FATFs re-examination before incorporating any threshold inimplementing the Recommendation.
9. The ECB welcomes the addition of sentences 21 and 22 to Article 1(1) of the Austrian Banking
Act. By these provisions (i) over-the-counter purchases of foreign instruments ( inter alia  notes
and coins) and over-the-counter sales of foreign notes and coins as well as traveller cheques;and (ii) the transfer of cash amounts by transporting them from the originator to the receiver, or
4by receiving the cash amount from the originator and paying the receiver in cash, except for
interbank transactions are regulated as banking business requiring a licence.
10. The ECB confirms that it has no objection to the competent national authorities making this
opinion publicly available at their discretion.
Done at Frankfurt am Main on 18 July 2002.
The President of the ECB
[signed]
Willem F. DUISENBERG