Anti-Corruption 2019 Second Edition

Last Updated December 09, 2019

Austria

Law and Practice

Author



Rohregger Scheibner (Wien - HQ) is located in the centre of Vienna and consists of a team of two partners, five associates and five paralegals. The firm, which was founded in 2004, primarily advises and represents companies and individuals in the field of white-collar crime, anti-corruption law and compliance. Companies are not only represented in the case of pending procedures, but also advised as a prevention measure with respect to compliance. Furthermore, a variety of training courses are offered, especially on compliance and house searches.

Austria has signed and ratified the following conventions.

  • The Organisation for Economic Co-operation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (ratified by Federal Law Gazette III 176/1999). Active bribery of foreign public officials as stated in Article 1 (1) of the OECD Anti-Bribery Convention has been transposed into law (at least in part) by way of Section 307 of the Austrian Criminal Code (Strafgesetzbuch, StGB) in the version as published in Federal Law Gazette I 153/1998; see also the definition of a "public official" in Section 74 (1) clause 4a of the Austrian Criminal Code.
  • The United Nations Convention against Corruption (UNCAC) dated 31 October 2003 (ratified by Federal Law Gazette III 2006/47, transposed into law by way of Federal Law Gazette I 109/2007).
  • The Council of Europe's Civil Law Convention on Corruption 1999 (ratified on 30 August 2006).
  • The Council of Europe's Criminal Law Convention on Corruption dated 27 January 1999 (ratified on 25 September 2013).
  • The Convention on the fight against corruption involving officials of the European Communities or officials of member states of the European Union dated 26 May 1997 (ratified by Federal Law Gazette III 2000/38, transposed into law in particular by way of Section 74 (1) clause 4a (Section 304/307 (1) clause 1) of the Austrian Criminal Code).
  • The Convention on the protection of the European Communities' financial interests dated 26 July 1995; Protocol to the Convention on the protection of the European Communities' financial interests; Protocol on the interpretation, by way of preliminary rulings, by the Court of Justice of the European Communities of the Convention on the protection of the European Communities' financial interests (ratified by Federal Law Gazette III 267/2002).

Since 1 December 2006, Austria has been a member of the Council of Europe's Group of States against Corruption (GRECO).

The main provisions of criminal law relating to corruption are contained in Section 22 of the Austrian Criminal Code (criminal offences relating to public officials, corruption and other related criminal offences). Individual offences contained in Section 6 of the Austrian Criminal Code (criminal offences against third-party assets) also represent an attempt to counter corruption, particularly in the private sector. In addition, the constituent elements of criminal offences as contained in the Austrian Financial Crime Act (Finanzstrafgesetz), in the Austrian Foreign Trade and Payments Act (Außenwirtschaftsgesetz) and in the Austrian Federal Act against Unfair Competition (Bundesgesetz gegen den unlauteren Wettbewerb) also serve to combat corruption. The Austrian Corporate Liability Act (Verbandsverantwortlichkeitsgesetz) governs the responsibility of legal entities and registered partnerships. Any disciplinary consequences for public officials are set out in other legislation.

In theory, there are no guidelines on interpretation. However, in practice, the courts adhere to the case law of the supreme courts.

The legislator planned comprehensive changes through the Criminal Procedural Law Amendment Act 2018. The Criminal Procedural Law Amendment Act 2018, which for the most part came into force on 1 June 2018, enables law enforcement agencies to use state espionage software (Bundestrojaner) to monitor encrypted messages and messenger services such as WhatsApp and Skype. The condition to use this Bundestrojaner is the existence of a specific suspicion. The software may be used for crimes punishable with a sentence of more than ten years, suspected terrorist offences or damages to life and limb, as well as acts against sexual integrity punishable with a sentence of more than five years. This law also made possible the use of so-called "IMSI catcher", with which the police can locate mobile phones. For both these methods, in addition to the order of the public prosecutor, it also requires a judicial authorisation.

In December 2019, the Austrian Constitutional Court annulled large parts of the Criminal Procedural Law Amendment Act 2018, including the Bundestrojaner, as unconstitutional. Therefore, for the time being, those provisions will not come into force. The legislator might pass a new Amendment Act, but this is not likely to happen in the near future. The Criminal Law Amendment Act 2018, which came into force on 1 November 2018, extended the catalogue of terrorist offences as well as the domestic jurisdiction related to terrorism.

With the amendment of the Transparency Data Bank Act 2012, which will come into force on 7 November 2019 and 1 January 2020, the control of the appropriate use of public fundings or support shall be improved.

A "unitary perpetrator" system applies in Austria. Thus, the direct perpetrator is punished under the same offence (and severity of sentence) as a person who incites the direct perpetrator or contributes to the offence. Accordingly, for instance, it is not only a civil servant who can commit an abuse of official authority (as could be presumed according to the wording of the law; see below), but also any person who incites a civil servant to commit an abuse of authority, whereby in the event the mere attempt at such incitement is punishable, as well as any person who makes any other contribution to an abuse of official authority on the part of a civil servant.

In principle, a perpetrator is deemed to be acting with intent if he or she seriously considers realisation of elements constituting a criminal offence to be possible and accepts the situation. In part, however, there is a requirement that the perpetrator does not consider a particular circumstance or outcome to be merely possible, but deems the existence or occurrence thereof to be certain.

Furthermore, as a general rule, it is not only a completed offence, but a mere attempt at an offence, that is punishable.

The Austrian Criminal Code makes a distinction between civil servants (Beamte), public officials and arbitrators. Civil servants are persons who are entrusted in any manner whatsoever with administrative duties. The concept of a "public official" goes further. It covers all persons who undertake legislative, administrative or judicial duties for any public body or another state or for an international organisation, whether as executive officer or employee, as well as those who are authorised to execute official acts on behalf of a public body. In addition, public officials are also deemed to be persons who act as executive officers or employees of a government-related organisation. The decision-makers of an arbitration court (arbitrators) also enter into consideration as perpetrators of corruption offences.

Abuse of Official Authority (Section 302 of the Austrian Criminal Code)

A civil servant who knowingly abuses his or her power to execute official acts on behalf of a public body as the executive officer thereof, and who thereby intends to cause prejudice to the rights of a third party, is committing an abuse of official authority. Such an offender may also consist of the state itself. There is a requirement that the perpetrator must consider the existence of an abuse of power to be certain.

Corruptibility (Section 304 of the Austrian Criminal Code) and Bribery (Section 307 of the Austrian Criminal Code)

With regard to corruptibility (Section 304 of the Austrian Criminal Code), a public official or arbitrator renders himself or herself liable to prosecution if he or she demands, accepts, or accepts the promise of an advantage for himself or herself, or for a third party in return for the exercise or the refraining from exercise of an official act in violation of duties. The official act to be performed must in any event constitute a violation of duty. If the public official or arbitrator fulfils all his or her duties in the correct manner, this constituent element of an offence cannot be fulfilled (however, there may be another offence – see below). Experts appointed in proceedings also render themselves liable to prosecution under this provision if they accept an advantage in return for preparing a false expert's report. In respect of these constituent elements, there exists no marginality threshold.

A person who offers, promises or grants a public official, arbitrator or expert an advantage for himself or herself, or a third party for the exercise or the refraining from exercise of an official act in violation of duties shall be committing bribery (Section 307 of the Austrian Criminal Code)

In respect of these two offences, no marginality threshold exists.

Acceptance of an Advantage (Section 305 of the Austrian Criminal Code) and Offering an Advantage (Section 307a of the Austrian Criminal Code)

A public official or arbitrator who demands, accepts, or accepts the promise of an advantage for himself or herself, or a third party for the due exercise or refraining from the due exercise of an official act shall be committing the offence of acceptance of an advantage (Section 305 of the Austrian Criminal Code). The difference between this and corruptibility (Section 304 of the Austrian Criminal Code) lies in the fact that the official act is in principle in compliance with the law and not in violation of duties. If the public official or arbitrator is not proactive – ie, he or she does not demand an advantage, but merely accepts an advantage or accepts the promise of an advantage – then acceptance or acceptance of a corresponding promise is only punishable if the advantage in question is undue. Advantages not deemed undue are, for instance, those for which acceptance is lawful, as well as minor-value tokens of appreciation such as are usual in the locality or region – this means, generally, tokens of appreciation having a maximum value of EUR100, provided that the public official or arbitrator does not regularly accept promises of such tokens or does not regularly accept the same.

A person who offers, promises or grants a public official or arbitrator an undue advantage for himself or herself, or for a third party in return for the due exercise or refraining from the due exercise of an official act, renders himself or herself liable to prosecution for the offence of offering an advantage (Section 307a of the Austrian Criminal Code).

Acceptance of an Advantage for the Purpose of Exerting Influence (Section 306 of the Austrian Criminal Code) and Offering an Advantage for the Purpose of Exerting Influence (Section 307b of the Austrian Criminal Code)

If a public official or arbitrator demands, accepts, or accepts the promise of an advantage not related to a specific official act, but rather with the intention of allowing himself or herself to be influenced thereby in his or her activity as a public official then he or she is committing the offence of accepting an advantage for the purpose of exerting influence. With this provision, too, cases are excluded in which the public official or arbitrator merely accepts or accepts the promise of a minor advantage; where a demand is made, here again, there exists no marginality threshold.

A person who offers, promises or grants to a public official or arbitrator an undue advantage for himself or herself, or a third party with the intention of thereby influencing the public official or arbitrator in his or her activity as a public official shall render himself or herself liable to prosecution for the offence of offering an advantage for the purpose of exerting influence (Section 307b of the Austrian Criminal Code).

Illicit Intervention (Section 308 of the Austrian Criminal Code)

Section 308 of the Austrian Criminal Code prohibits the demanding, acceptance, promising or acceptance of a corresponding promise, offering and granting of an advantage for the purpose that the person who receives the advantage exerts undue influence on the decision-making of a public official or arbitrator. Such undue influence is given if it is aimed at the exercise or the refraining from exercise of an official act in violation of duties or is associated with the offering, promise or granting of an undue advantage. Thus, this particular offence is based on a three-person relationship: the perpetrator offers an advantage to someone who then exerts undue influence on the public official.

Acceptance of Gifts and Bribery of Employees or Agents (Section 309 of the Austrian Criminal Code)

An employee or agent of a business undertaking who, in the context of business dealings, demands, accepts, or accepts the promise of an advantage for himself or herself, or a third party from another person in return for the exercise or the refraining from exercise of a legal act in violation of duties shall be committing the offence of acceptance of gifts and bribery of employees or agents (Section 309 of the Austrian Criminal Code). Under the terms of the same offence, any person who offers, promises or grants an advantage to an employee or agent of a business undertaking in the context of business dealings in return for the exercise or refraining from exercise of a legal act shall also render himself or herself liable to prosecution. Section 309 of the Austrian Criminal Code is intended to prevent corruption in the private sector and thus relates to such conduct in the private economic sector whereby employees or agents of another business undertaking seek to obtain preferential treatment, constituting a violation of duty through promises or the granting of gifts or other advantages. A similar criminal provision may be found in Section 10 of the Austrian Federal Act against Unfair Competition.

Breach of Trust (Section 153 of the Austrian Criminal Code)

A person who knowingly abuses his or her power of disposal over third-party assets or his or her power to place another person under a duty and who thereby adversely affects the assets of the other person shall be guilty of a breach of trust (Section 153 of the Austrian Criminal Code). Such abuse of power shall be given if a person unreasonably breaches such rules as serve protection of assets of a beneficial owner. Breach of trust is a very frequent constituent element of an offence under Austrian law on economic crime and corruption. A managing director who makes a payment in the name of a company without being under a duty to do so may potentially, if the company thereby suffers a loss, be just as much committing a breach of trust as a managing director who accepts premiums or similar for himself or herself in person and for this reason offers a company service for a cheaper price.

Acceptance of Gifts by Persons Holding a Position of Power (Section 153a of the Austrian Criminal Code)

A person who has accepted a pecuniary advantage that is not merely insignificant in return for exercise of the power granted to him or her to effect disposal in respect of third-party assets or of the power to place another person under a duty (such as a managing director of a company) and who does not, in violation of duty, remit such pecuniary advantage shall be committing the offence of acceptance of gifts by a person holding a position of power (Section 153a of the Austrian Criminal Code).

Misuse of Funding (Section 153b of the Austrian Criminal Code)

Any person who uses funding granted improperly for purposes other than those for which it was granted shall render himself or herself liable to prosecution for misuse of funding (Section 153b of the Austrian Criminal Code).

Falsification of Balance Sheets (Sections 163a et seq of the Austrian Criminal Code)

If, in the case of a legal entity or partnership, the executive bodies or executive officers shall present the balance sheets in an unreasonable manner in false or incomplete form, and if this has the capacity to cause a substantial loss, then the executive bodies or executive officers – and possibly also the auditors – shall be committing the offence of falsification of balance sheets (Sections 163a et seq of the Austrian Criminal Code). This offence thus faces a number of barriers before punishable conduct may actually be deemed to have occurred. Firstly, the presentation must be unreasonable and, secondly, it must have the capacity to cause a substantial loss. The perpetrator's intent must also encompass these aspects.

Money Laundering (Section 165 of the Austrian Criminal Code)

If assets originating from a criminal offence are hidden or the origin thereof is concealed then this constitutes money laundering (Section 165 of the Austrian Criminal Code). Third parties may also be guilty of such an offence where they knowingly take delivery of corresponding assets, hold the same in safekeeping, or invest or realise, etc, such assets, or if they take delivery of assets from a criminal organisation, hold the same in safekeeping or realise such assets, or similar.

Agreements Restricting Competition in Procurement Procedures (Section 168b of the Austrian Criminal Code)

If unlawful agreements are made in the context of a procurement procedure that are aimed at inducing the principal to accept a particular offer, this constitutes commission of the offence of an agreement restricting competition in a procurement procedure (Section 168b of the Austrian Criminal Code).

The limitation period for the prosecution of corruption offences is based primarily on the amount of any loss or illegitimate advantage, whereby, as a rule, the limitation period is five or ten years. Here, it must be borne in mind that particular periods, specifically the majority of a preliminary criminal investigation, are not counted as part of the limitation period.

Austrian criminal laws apply in any event to all acts committed within Austria. Furthermore, Austrian criminal laws apply to criminal offences committed abroad by an Austrian civil servant, public official or Austrian arbitrator, as well as in the case of corruption offences if the perpetrator was an Austrian national at the time of the offence or the offence was committed in favour of an Austrian public official or arbitrator. Falsification of balance sheets (Sections 163a–f of the Austrian Criminal Code) is also subject to penalty under Austrian criminal laws if the principal place of business or registered office of the organisation is situated in Austria. Furthermore, Austrian criminal law comprises other special provisions that could in principle establish punishability under Austrian criminal laws.

The Austrian Corporate Liability Act (Verbandsverantwortlichkeitsgesetz, VbVG) sets out the preconditions under which legal entities, registered partnerships and European Economic Interest Groupings (associations) are liable for criminal offences. All offences may be potentially considered criminal offences. An association may – in addition to the natural persons – be held liable for a criminal offence if the act has been committed in favour of the association or duties have been breached through the act in question, which duties relate to the association. Where certain preconditions are given, criminal offences on the part of a decision-maker or an employee of the association may enter into consideration. The liability of an association for an act and the punishability of decision-makers or employees in respect of the same act do not preclude one another. By way of legal consequence, the Austrian Corporate Liability Act imposes primarily a fine. Under some circumstances, successors in title may also bear the legal consequences set out in the Austrian Corporate Liability Act. A universal successor in title is in any event affected by the legal consequences; a singular successor in title is affected if, essentially, the same ownership circumstances exist in respect of the entity and the business operation or activity is essentially being continued.

Particularly in the case of crimes against property, a defence may be based purely on the assertion that the objective constituent elements of the offence are not even fulfilled. If – for example, in the case of an allegation of breach of trust (Section 153 of the Austrian Criminal Code) – it is possible to demonstrate straightforwardly that the company suffered no prejudice (for instance, because a payment has a corresponding value for the company) then neither does punishability enter into consideration. Furthermore, within the framework of defence, it is often possible to demonstrate that the perpetrator had no intention to satisfy the constituent elements of an offence (ie, the perpetrator lacked the intent that is a mandatory precondition of punishability). General grounds under criminal law aimed at justifying and excusing an action (self-defence, mistake of fact meaning an absence of mens rea, etc) play a very secondary role in criminal law relating to corruption. Naturally, the prosecuting authority is under a duty to provide evidence and the presumption of innocence applies to the accused. If there exist any doubts as to his or her guilt, he or she must be acquitted (in dubio pro reo).

In the event that the accused has already confessed or wishes to confess then an attempt must be made to compensate for damages to the greatest possible extent, since this not only constitutes a mitigating factor, but may enable the possibility of diversion. In such case, where the preconditions are given, it may be possible to work accordingly towards diversion.

There are no exceptions to the above defences.

As set out above, some offences are not punishable if no undue advantage is granted or promised. "No undue advantage" means, for instance, an advantage, the acceptance of which is permitted by statute, or tokens of appreciation of minor value such as are usual for a locality or region, which means, in principle, tokens of appreciation having a value totalling a maximum of EUR100, provided that the public official or arbitrator does not regularly accept such tokens or the promise of such tokens. As soon as a public official or arbitrator demands an advantage, there can be no de minimis exception.

No sectors or industries exist that are entirely exempt from corruption offences. It is merely necessary to bear in mind that, depending on the person to whom an advantage is granted (in particular, whether to a public official or an employee in the private sector), differing offences may apply.

Austrian criminal law sets out a number of possibilities that enable prosecution to be avoided despite a criminal offence having been committed.

Active Repentance

With regard to numerous crimes against property (eg, breach of trust, money laundering), the punishability of the perpetrator is precluded if, before the criminal prosecution authorities have learned of his or her culpability, he or she voluntarily makes good the entire loss arising from his or her action, or contractually undertakes to indemnify the injured party accordingly for the loss suffered within a particular period and indeed does so. Active repentance may also be by way of self-indictment, whereby the perpetrator must at the same time make good the loss suffered by way of deposit with the authority. In the case of corruption offences in relation to public officials/arbitrators (abuse of official authority, bribery, etc), there exists no possibility of active repentance.

Prosecution Witness

The perpetrator shall not be prosecuted if, before being questioned as an accused or before being compelled to testify, the perpetrator voluntarily approaches the public prosecutor's office, gives a repentant confession as to contribution to an act and discloses his or her knowledge of new facts or evidence, knowledge of which makes a key contribution to uncovering fully a greater criminal offence over and above his or her own contribution thereto or to determining a leading party to the offence. Where relevant, particular conditions may be imposed upon him or her (compensating for loss, charitable contribution, payment of a monetary amount, etc – see also "Diversion" below).

If the perpetrator is a member of a criminal organisation and if he or she discloses his or her knowledge, making a significant contribution to uncovering the criminal offences of such criminal organisation or to determining a leading person involved therein, the perpetrator has the possibility of an exceptional reduced sentence. In such event, the penalty will be substantially below the minimum level. This option is also possible if the perpetrator discloses his or her knowledge only after having been already heard as an accused or having been compelled to testify.

Diversion

Under certain circumstances, the possibility exists that the public prosecutor's office/the court withdraws from the prosecution (diversion) and the perpetrator need only fulfil particular conditions (in particular, making good losses, payment of a monetary amount or charitable contributions). In order for diversion to enter into consideration, above all, the facts must be clarified and the perpetrator must assume responsibility therefor (as a rule, a confession is thus required). Furthermore, the degree of the perpetrator's guilt may not be serious and the offence may not be subject to a custodial sentence of more than five years. Therefore, in the case of more major corruption cases, diversion does not enter into consideration. Further restrictions exist in the case of abuse of official authority.

In terms of penalties, Austrian criminal law primarily has monetary fines and custodial sentences. Under criminal law on corruption, custodial sentences in principle range up to ten years (or more, in exceptional instances). Even in the event of several offences, the maximum penalty may only be applied in full on a single occasion.

Indeed, where several offences are adjudged simultaneously, in criminal trials, the "absorption principle" applies (Section 28 of the Austrian Criminal Code), which states that, despite the commission of several criminal offences, only a single penalty – and not, for instance, a series of individual penalties ("accumulation principle") – is imposed. This penalty is to be determined in accordance with the law that imposes the highest penalty. If, for instance, a perpetrator commits an offence subject to a custodial sentence of up to one year and a further offence subject to a custodial sentence of between six months and five years then the penalty shall be fixed between the boundaries of six months and five years. Within this framework, the specific penalty shall be imposed in accordance with the general criteria applied to determination of a penalty (regarding the perpetrator's guilt, etc, see Section 32 et seq of the Austrian Criminal Code).

Custodial sentences and monetary fines are thus subject to upper limits ("capped"). The maximum custodial sentence is based directly on the wording of the law (eg, Section 304 (1) of the Austrian Criminal Code: "Custodial sentence of up to 3 years", but considers the possibility of exceeding the upper limit in Section 39 of the Austrian Criminal Code). With regard to monetary fines, the Criminal Code applies the system of daily rates. For instance, commission of a criminal offence is subject to imposition of a certain number of daily rates – 360, or a maximum of 720 (eg, Section 153a: "[…] or a monetary fine of up to 720 daily rates"). This means that the perpetrator must pay a specific monetary amount per day for a specific number of days (a maximum of 720, but according to Section 19 (1) of the Austrian Criminal Code, at least two). While the number of days – as in the case of a custodial sentence – is determined according to the general criteria applied to determination of a penalty, the amount of the individual daily rate is based on the personal circumstances and economic capacity of the perpetrator (Section 19 of the Austrian Criminal Code). The perpetrator is to pay an amount such that what remains amounts to merely a subsistence level. However, here too, the law sets out a maximum limit: the maximum daily rate that may be imposed totals EUR5,000.

Under certain preconditions, custodial sentences may also be imposed conditionally with a probation period. If a custodial sentence totalling a maximum of two years is imposed, this may be served under certain circumstances by way of house arrest (using an electronic ankle tag).

Assets used for the commission of a criminal offence or obtained through the offence may be declared forfeited. This may in some circumstances also pertain to assets that, at the time of the judicial decision, are not (or are no longer) in the ownership of the perpetrator. Accordingly, this is not a penalty in the strict sense.

If a civil servant is sentenced for a corruption offence (or another intentional offence) to a custodial sentence of over one year or a conditional custodial sentence of over six months then the civil servant is dismissed from office (Section 27 (1) of the Austrian Criminal Code).

Sentencing under the Austrian Corporate Liability Act may have certain secondary consequences for an entity, such as a restriction on licences under the Austrian Foreign Trade and Payments Act as well as on participation in procurement procedures.

A number of corruption offences provide for a minimum penalty, whereby this does not yet mean an unconditional custodial sentence on a mandatory basis (eg, Section 304 (2) of the Austrian Criminal Code: "Custodial sentence of between six months and five years"). The basis for assessment of the penalty is the guilt of the perpetrator. In this context, primarily the demerit (Unwert) in terms of the perpetrator's attitude and action, and the outcome of the offence must be taken into account. The Criminal Code sets out a catalogue of specific aggravating and mitigating factors, whereby aspects not included in this catalogue must also be borne in mind. Particular aggravating factors include circumstances where a perpetrator commits several criminal offences or continues the same over a lengthy period, has received a relevant prior conviction, or where the perpetrator is the instigator or ringleader in relation to an offence. The greatest mitigating factor is a repentant confession. Further mitigating factors include if the perpetrator has previously led a regular life, if he or she was only involved in a secondary manner, if the offence is already some time in the past, if the proceedings have taken a disproportionately long time for reasons not attributable to the perpetrator or the perpetrator's defence attorney, if the perpetrator was enticed to commit the offence more due to a particularly attractive opportunity and if he or she seriously attempted to make good the loss caused or to prevent further detrimental consequences.

In addition to numerous requirements of business undertakings and legal entities under business enterprise and company law, the Austrian Corporate Liability Act is also intended to establish an adequate control system. For instance, a legal entity/partnership is liable for a criminal offence committed by an employee only if commission of the offence was enabled or significantly facilitated on the basis that decision-makers failed to exercise the requisite and reasonable care appropriate to the circumstances, in particular by omitting significant technical, organisational or personnel measures to prevent the offence.

Numerous business undertakings create internal compliance rules, although they are not under any direct statutory obligation to do so. However, special rules do apply with regard to particular sectors/undertakings, such as appointment of a compliance officer.

In practical terms, for a business undertaking and its executive bodies/officers, it would in any event appear advisable to establish comprehensive preventive measures, including compliance rules, to avoid liability under civil law or liability to prosecution under criminal law.

An authority that becomes aware of a suspected criminal offence within its statutory sphere of influence is under a duty to report the same to the criminal prosecution authorities.

There exists no general obligation under criminal law upon individuals and/or business undertakings to notify breaches of anti-bribery and anti-corruption rules. However, if, for instance, a managing director is aware of a planned or continuing criminal offence and takes no action, although he or she could do so, it may under certain circumstances be the case that he or she thereby renders himself or herself guilty of the same offence due to having failed to act as required (Section 2 of the Austrian Criminal Code). Intentionally protecting a perpetrator against criminal prosecution is also prohibited (preferential treatment pursuant to the terms of Section 299 of the Austrian Criminal Code).

The whistle-blower scheme set out in Section 2a (6) of the Austrian Public Prosecution Act (Staatsanwaltschaftsgesetz, StAG) makes it possible to ensure protection of a whistle-blower's anonymity from a technical perspective.

If the whistle-blower has rendered himself or herself liable to prosecution, the possibility exists of exceptional mitigation or exemption from punishment on the basis of the provision governing prosecution witnesses (see 4.4 Incentives for Whistle-blowers).

Otherwise, with regard to whistle-blowers, there exist numerous unresolved issues in Austria in terms of civil law, labour law and criminal law.

If a whistle-blower has rendered himself or herself liable to prosecution, the possibility exists that he or she may be exempted from any penalty as a prosecution witness, or the penalty applied may at least be subject to exceptional mitigation (see 4.3 Protection Afforded to Whistle-blowers).

Section 80 (1) of the Code of Criminal Procedure (Strafprozessordnung) sets out the right of any person who becomes aware of commission of a criminal offence to report the same to the criminal investigation department or the public prosecutor's office.

Under the Austrian Public Prosecution Act (Section 2 a (6)), the whistle-blowing system of the Public Prosecutor's Office for Economic Crime and Corruption has been anchored in statute, as detailed on the website of the Prosecutor's Office.

In Austria, corruption is fought on several levels. Where a criminal offence is committed, the perpetrator can primarily expect a criminal trial and subsequently potentially a monetary fine or custodial sentence. Before a main trial takes place, there is a preliminary investigation, which often takes many years and which is directed by the public prosecutor's office.

If, as a result of the perpetrator's unlawful actions, a loss has been suffered, the parties having suffered the loss may to some degree assert their claims already in the criminal proceedings and, in any event, in separate civil proceedings.

Public-sector employees (particularly civil servants) must additionally anticipate disciplinary proceedings by the administrative authorities.

The criminal prosecution authorities against corruption offences in Austria are primarily the Public Prosecutor's Office for Economic Crime and Corruption, and the Federal Bureau for Anti-Corruption, whereby the ordinary public prosecutor's offices and the police authorities are also permitted to investigate corruption offences. The public prosecutor's office directs the preliminary investigation. It may conduct investigations itself or – as is generally the case – refer to criminal investigators, particularly the Federal Bureau for Anti-Corruption, instructing them to undertake the requisite investigations. The Austrian Code of Criminal Procedure provides for various investigation measures, such as property searches, securing of documents and monitoring telephone conversations, so that these are available to the criminal prosecution authorities.

The public prosecutor's office has the possibility of suspending a preliminary investigation where there is no prospect of a successful prosecution. In addition, it may offer the accused the possibility of diversion and terminate the proceedings on this basis. It may also decide on exemption from penalty for a prosecution witness. If none of the above options enters into consideration, it must bring a charge. In the event of a legally valid indictment, a main trial takes place before an independent court. There are no special courts responsible for corruption matters, but within the criminal courts, there often exist specialised panels for this purpose.

Most investigation measures are entrusted by the public prosecutor's office to the criminal investigation department and these are then conducted by the same. In the event of imminent danger, the criminal investigation department may conduct particular investigation measures without being instructed to do so by the public prosecutor's office. Instructions concerning investigation measures that encroach upon the fundamental rights of subjects require judicial approval.

In principle, the public prosecutor's office cannot apply any discretion. If the corresponding preconditions are given for discontinuation, diversion, or the status of a prosecution witness, it must proceed accordingly. Only with regard to the question of which diversion measures enter into consideration – and, in the event of payment of a monetary sum, the amount thereof – does it have a degree of scope. In any event, the accused has a legal right to such manner of proceeding. Arrangements between the public prosecutor's office, the court and the accused are strictly prohibited.

The public prosecutor's office is under a duty of objectivity and has a status equal to that of the defendant in the main trial. However, being in charge of the preliminary investigation, de facto it has numerous possibilities which are not open to the accused (for instance, conducting property searches and securing property).

There have been no landmark investigations or decisions in respect of bribery or corruption in the very recent past.

In theory, the penalty ranges up to a ten-year custodial sentence for natural persons (eg, Section 304 (2) of the Austrian Criminal Code) and EUR1.3 million for entities, whereby both maximum penalties may indeed be even higher under certain circumstances. It would appear that, for a first offence, the maximum penalties have not yet been applied.

The evaluation of implementation and enforcement of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions is undertaken by way of peer reviews and monitoring consists of several phases. Several reports have been published, the latest in 2017, by way of a follow-up to the report from 2012. In the 2012 report, the Working Group had recommended that Austria take appropriate steps within its legal system to ensure that nationality jurisdiction applies to Austrian companies that bribe abroad, including by using non-nationals as intermediaries. Furthermore, the Working Group issued some recommendations regarding the liability of legal persons for the bribery of foreign public officials, the investigation and prosecution of foreign bribery cases, and the liability of legal persons for the bribery of foreign public officials (for greater detail, see OECD, Phase 3 Report on Implementing the OECD Anti-Bribery Convention in Austria, December 2012). The follow-up report from 2017 deals with the changes that have occurred in the intervening period (for instance, the decision of the Constitutional Court in relation to the Austrian Corporate Liability Act, VfSlg 20.112/2016, and introduction of the electronic register of account information).

However, according to the terms of a report published recently by the anti-corruption organisation Transparency International, Austria has taken only "initial steps" with regard to bribery abroad and has thus performed worse than in the last report.

Within the framework of peer reviews, GRECO examines observance and implementation of the legal instruments respectively approved by the Council of Europe. With regard to the first two evaluation rounds, setting up and reinforcement of the Federal Bureau for Anti-Corruption, the Public Prosecutor's Office for Economic Crime and Corruption, and the Anti-Corruption Committee, plus stronger co-operation between various criminal prosecution authorities and the introduction of a code of conduct for civil servants were all deemed positive. However, it was also noted that Austria has omitted to implement all previous recommendations satisfactorily.

GRECO's fourth evaluation round commenced on 1 January 2012 and dealt with the topic of "Prevention of corruption in respect of members of parliament, judges and prosecutors". In the evaluation report, GRECO recommends that Austria implement a series of measures to prevent bribery. While it was considered positive for lawmakers to be treated in the same manner as those in other categories of public office in terms of corruption offences, Austria was deemed to rely too much on the deterrent effect of this provision of criminal law. Thus, there needed to be a requirement, for instance, for internal rules and orientation aids within Parliament regarding the acceptance, valuation and disclosure of gifts, hospitality and other advantages, including external sources of support made available to parliamentarians. The recommendations stated in the GRECO report were to be implemented by 30 April 2018. The fifth evaluation round on "Preventing corruption and promoting integrity in central governments (top executive functions) and law enforcement agencies" will continue until at least 2022-23.

The status of implementation of the UNCAC in the member states is also checked by way of peer reviews, whereby the results are summarised in reports and recommendations given. The only, and thus the latest, report on implementation of the Convention by Austria dates from 2014 and reviewed implementation of Chapter III (Criminalisation and Law Enforcement) and IV (International Co-operation) of the UNCAC. The following items were emphasised as strengths of national corruption provisions implementing the aforementioned chapters of the UNCAC:

  • the broad interpretation of the concept of “business activities” when applying;
  • the provision on bribery in the private sector;
  • the broad range of state authorities protected;
  • the availability of “extended forfeiture” for assets that are likely to be proceeds of crime if their legal origin cannot be proven to the satisfaction of the court; and
  • the fact that the Austrian legislation not only allows jurisdiction to prosecute when extradition is denied due to nationality, but also allows such jurisdiction when extradition is denied for other reasons not related to the nature of the offences.

However, a number of challenges were also noted in the context of implementing the Convention, consisting of, for instance, an absence of measures to ensure the effectiveness of the domestic legislation on the criminal liability of legal persons, or measures to expand the protection of whistle-blowers in the private sector. Furthermore, a number of recommendations were made with regard to improvements to procedural law; for greater detail, see United Nations Conference of the States Parties to the United Nations Convention against Corruption, Implementation Review Group Fifth session, executive summary, CAC/COSP/IRG/I/3/1/Add.11.

Currently, the Tax Fraud Prevention Act 2020 is under review and is expected to enter into force in 2020. The aim of this legislation is to increase transparency in the area of direct taxation, with the aim of improving the fight against tax avoidance and tax evasion in the internal market. It shall define the obligation to report cross-border notifiable transactions to the Austrian competent authority within a certain period of time and define the automatic exchange of information between the notifications received and the competent authorities of the other member states. In addition, this law should lead to a tightening of tax and customs offences.

Rohregger Scheibner

Rotenturmstraße 17
1010 Wien
Austria

+43 1 53553 1000

michael.rohregger@rwk.at www.rwk.at
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Rohregger Scheibner (Wien - HQ) is located in the centre of Vienna and consists of a team of two partners, five associates and five paralegals. The firm, which was founded in 2004, primarily advises and represents companies and individuals in the field of white-collar crime, anti-corruption law and compliance. Companies are not only represented in the case of pending procedures, but also advised as a prevention measure with respect to compliance. Furthermore, a variety of training courses are offered, especially on compliance and house searches.

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