The treatment of Austrian private foundations under the Ultimate Beneficial Ownership Act

Abstract

Abstract As part of the implementation of the fourth Anti-Money Laundering Directive in Austria, the Wirtschaftliche Eigentümer Register Gesetz, (The Ultimate Beneficial Owner Register Act) was introduced. The main aim of this Act is to provide accurate and up-to-date information on the ultimate beneficial owner (UBO) of entities, trusts, and foundations. This information is seen as a key factor in combating money laundering and terrorist financing. Paragraph 2 of the Ultimate Beneficial Ownership Act defines the UBO, which corresponds to the definition in paragraph 3 subparagraph 6 of the Anti-Money Laundering Directive. In the case of corporate entities, ultimate ownership and control are relevant for determining the UBO. In the case of trusts and private foundations, it is not ownership and control that are relevant for determining the UBO, but the function the person has with respect to the trust/foundation. All definitions have in common that the UBO has to be a natural person. Obliged entities are required to identify and report their UBOs to the register, in the case of a breach of duty/law severe penalties apply.