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A Due Diligence Policy outlines how organizations assess and manage risks when entering business relationships or transactions. In Austria, these policies help companies comply with key requirements under the EU Anti-Money Laundering Directive and local financial market regulations, particularly the Finanzmarkt-Geldwäschegesetz (FM-GwG).

The policy sets clear steps for verifying business partners, checking ownership structures, and monitoring ongoing relationships. It guides staff through required checks, from basic identity verification to deeper investigations of high-risk clients. Austrian businesses must adapt their due diligence measures based on risk levels, with stricter requirements for politically exposed persons and cross-border transactions.

Austrian businesses need a Due Diligence Policy before starting any new business relationships, especially when dealing with financial transactions or high-value contracts. It's particularly crucial when onboarding new clients, entering partnerships, or conducting mergers and acquisitions under Austrian financial market regulations.

The policy becomes essential when expanding into new markets, working with international partners, or handling transactions that fall under FM-GwG oversight. Austrian banks, real estate firms, and professional service providers must activate their due diligence processes for transactions over €15,000, when dealing with politically exposed persons, or when business activities involve high-risk countries identified by the Financial Action Task Force.

• Standard Due Diligence Policy: Covers basic risk assessment and verification procedures required by Austrian financial regulations
• Enhanced Due Diligence Policy: Features stronger controls for high-risk relationships, politically exposed persons, and cross-border transactions
• Sector-Specific Policy: Tailored for banking, real estate, or professional services under FM-GwG requirements
• Transaction-Based Policy: Focuses on specific deal types like mergers, acquisitions, or major investments
• Compliance-Focused Policy: Emphasizes anti-money laundering and counter-terrorism financing measures required by Austrian law

• Legal Counsel: Draft and review Due Diligence Policies to ensure compliance with Austrian financial regulations and FM-GwG requirements
• Compliance Officers: Implement and monitor policy execution, train staff, and maintain documentation of due diligence procedures
• Board Members: Approve policies and oversee their integration into corporate governance frameworks
• Financial Institutions: Apply enhanced due diligence measures for high-risk transactions and relationships
• Client-Facing Staff: Execute day-to-day due diligence checks and collect required documentation from business partners
• External Auditors: Review policy effectiveness and verify compliance with Austrian regulatory standards

• Risk Assessment: Map your organization's specific risk areas under Austrian financial regulations and FM-GwG requirements
• Industry Requirements: Identify sector-specific due diligence obligations, especially for banking, real estate, or professional services
• Verification Procedures: Define clear steps for identity checks, ownership structure verification, and transaction monitoring
• Documentation Systems: Establish how records will be maintained and accessed for regulatory compliance
• Training Framework: Plan how staff will learn and implement the policy effectively
• Review Process: Set up regular policy evaluation schedules to keep current with Austrian regulatory changes

• Purpose Statement: Clear objectives aligned with Austrian financial market regulations and FM-GwG requirements
• Risk Assessment Framework: Defined criteria for evaluating business relationships and transaction risks
• Identification Procedures: Specific steps for verifying client identity and beneficial ownership
• Enhanced Due Diligence Triggers: Criteria for heightened scrutiny of high-risk relationships
• Documentation Requirements: Record-keeping protocols meeting Austrian regulatory standards
• Reporting Procedures: Clear guidelines for suspicious activity reporting
• Review Mechanism: Schedule and process for policy updates and compliance monitoring

While a Due Diligence Policy and a Compliance and Ethics Policy might seem similar, they serve distinct purposes in Austrian business operations. A Due Diligence Policy specifically focuses on risk assessment procedures for business relationships and transactions, while a Compliance and Ethics Policy covers broader organizational conduct and regulatory adherence.

• Scope of Application: Due Diligence Policies target specific business activities and transactions, especially under FM-GwG requirements. Compliance and Ethics Policies cover overall organizational behavior and regulatory compliance.
• Risk Focus: Due Diligence emphasizes partner verification and transaction monitoring, while Compliance and Ethics addresses internal conduct standards and regulatory obligations.
• Implementation Timing: Due Diligence procedures activate before and during specific business relationships, whereas Compliance and Ethics guidelines apply continuously throughout operations.
• Regulatory Framework: Due Diligence primarily aligns with financial market and anti-money laundering regulations, while Compliance and Ethics spans multiple regulatory domains.