Sanctions Act 2024

On 10 February 2025, the Federal Act on Sanctions (FAS 2024) (largely) entered into force. In the following, we explain the key points of the FAS 20204.

Introduction

On 10 February 2025, the FAS 2024 entered into force. Like its predecessor, the Federal Sanctions Act 2010 (FAS 2010), the FAS 2024 serves as a national legal basis for transposing or implementing sanctions measures of the United Nations (UN) or the European Union (EU) that are binding under international law, including directly applicable sanctions measures of the EU. The FAS 2024 only in cases where no special laws, such as the Foreign Trade Act 2011 (Außenwirtschaftsgesetz 2011), the War Material Act (Kriegsmaterialgesetz) and the Security Control Act (Sicherheitskontrollgesetz) are applicable.

Implementation, monitoring and enforcement of UN and EU sanctions

On the occasion of its 2016 country evaluation of Austria (the Mutual Evaluation Report Austria 2016 (MERA) is available here), the Financial Action Task Force (FATF, an organisation affiliated to the Organisation for Economic Cooperation and Development) identified a number of deficiencies in the transposition and implementation of sanction measures in Austria. The FAS 2024 tries to remedy these deficiencies.

1. The ordering of measures took too long, now there is an accelerated procedure

The FATF had criticised, inter alia, the fact that in Austria sanctions measures by the UN or the EU cannot be ordered immediately (see MERA, p. 125f). This is not surprising, as the predecessor legal framework required the approval of the Federal Government or the agreement with the Main Committee of the National Council. The FAS 2024 removes these requirements and implements further procedural accelerations (announcement on the website of the Federal Minister of Finance (BMF), accelerated entry into force).

2. No possibility to make individual listing proposals; right to make proposals now provided for by law

Under the FAS 2010, Austrian authorities could not submit proposals for the listing or delisting of individuals or entities to the UN or the EU (see MERA, p. 120ff). Section 3 FAS 2024 now creates a legal basis and authorises the BMF and the Federal Minister of the Interior (BMI), in agreement with the Federal Minister for European and International Affairs (BMeiA), to draw up corresponding listing and delisting proposals.

National sanction measures

Section 4 FAS 2024 also forms the legal basis for the imposition, implementation and repeal of national sanctions measures. The scope of application of this provision is narrow. The imposition of national sanctions measures is only permissible to the extent that this is necessary (i) to protect Austria's foreign and security policy interests and (ii) in connection with international sanctions in the event of imminent danger or in order to protect particularly sensitive areas of international cooperation.

Transfer of competences

The FAS 2024 provides for new competence rules: From 1 January 2026 (transfer date), the Financial Market Authority (FMA) will take over the tasks previously performed by the Austrian National Bank (OeNB) in this area. This transfer of competences is intended to utilise potential synergies (the FMA is already responsible for the prevention of money laundering and terrorist financing). In addition to the credit, financial and payment institutions currently supervised by the OeNB, the FMA will also monitor compliance with sanctions measures by insurance companies (applies to all branches of insurance), investment firms, investment service providers, alternative investment fund managers, e-money institutions and providers of crypto-asset services from that date.

To this end, financial market participants must implement strategies, controls and procedures. This can be done by building on existing (automation and / or AI-supported) systems for the prevention of money laundering and terrorist financing.

Summary

With the FAS 2024, the Austrian legislator is reacting somewhat late to the criticism in the FATF’s 2016 country review – and probably with a view to the FATF’s upcoming 2025 country review. The FAS 2024 is intended to create a more efficient and flexible framework for the implementation, monitoring and enforcement of sanctions measures. It remains to be seen whether these adjustments will be sufficient to take account of the dynamics created by UN and EU restrictive measures.

Please note: This blog is for general information purposes only and in no way constitutes legal advice from Binder Grösswang Rechtsanwälte GmbH. The blog cannot replace individual legal advice. Binder Grösswang Rechtsanwälte GmbH accepts no liability of any kind for the content and accuracy of the blog.