WiEReG compliance package simplifies KYC processes

Those subject to money laundering obligations, such as banks or tax advisors, will then be able to view these documents directly and thus fulfill their money laundering prevention obligations with less effort. This avoids ongoing inter-company queries and the back-and-forth sending of documents, and significantly simplifies KYC processes.

The problem

Legal entities often have to provide the same KYC documents (excerpts from the commercial register, organizational charts, etc.) to their business partners (especially banks) several times a year as part of KYC checks. In particular, documents of foreign parent companies are only valid for six weeks, according to the FMA. Therefore, even if nothing has changed, these must be requested again and again and transmitted to the (future) business partners. In a group, relevant documents must also be compiled and kept for each individual (subsidiary) company. This means a considerable bureaucratic effort, which often blocks the compliance department and can delay financing processes.

The solution

The new “Compliance Package” introduced on November 10 is intended to remedy this situation. Party representatives such as lawyers or tax advisors can submit this compliance package to the register of beneficial owners on behalf of companies. This package is to consist of those documents that are necessary to determine the beneficial owners of a legal entity. Banks and other obligated parties can retrieve the documents directly from the register and fulfill their anti-money laundering obligations. This has the advantage of saving the company from having to constantly compile and transmit the same documents over and over again. Uploading a compliance package also comes with other legal benefits.

The other advantages of the Compliance Package

• Foreign documents uploaded in the compliance package are valid for a whole year, just like the package itself. Therefore, they do not have to be requested and renewed by foreign parent companies every six weeks, as was previously the case.
• There are no fees for the company for uploading and making available a Compliance Package. Although there is a charge for the queries, there are favorable flat rates.
• All subsidiaries can refer to the Compliance Package of the top domestic holding company. This saves them having to make inquiries at the top group companies and keep the relevant documents separately.
• Legal entities can either make the compliance package public or restrict access to it to certain business partners. In this case, other parties must submit an automated request via the register. The release can be made by the legal entity itself or by the lawyer/tax advisor.
• Sensitive documents do not have to be transmitted to the register. In this case, it is possible for a lawyer’s file note on the relevant content to be prepared and uploaded. This is especially recommended in connection with sensitive trust or syndicate agreements.

Do you have questions about Compliance Package or WiEReG? BT Compliance experts will be happy to advise you.