In terms of the sanctions sector, the Austrian sanctions market is largely determined by the EU sanctions legislation. The introduction of certain anti-circumvention tools, like the “best-efforts obligation” or the “No-Russia Clause” certainly increased the demand for sanctions work for multinational corporations who deal with international supply chains. The demand for tailored compliance programs is rising as enforcement actions for sanctions violations will increase in the future.

Austrian corporations dedicate more resources to compliance efforts and extend these efforts to subsidiaries as well. This is because subsidiaries of EU companies in third countries must essentially comply with EU sanctions. Moreover, the divergence between US, UK and EU sanctions requires increased attention especially in light of a potential secondary sanctions listing in the US.

Austria is an export-heavy country with a certain dependence on the import of many raw materials. Thus, sanctions affect all kinds of industries, from food and retail throughout heavy machinery. Austria’s oil & gas industry is affected as well as the banking and financial services industry.

The Austrian Financial Market Authority (FMA) is competent for the making available and unfreezing of frozen funds in case a financial market participant is involved. If no financial market participant is involved, the Austrian Ministry of Finance is competent for the making available and unfreezing of frozen funds. Other authorities may be competent depending on the specific matter. For matters involving economic (sectoral) sanctions, the Austrian Federal Ministry of Economy, Energy and Tourism is the national competent authority. It decides, among others, derogation requests for the provision of certain services to Russian subsidiaries or the export of sanctioned products to sanctioned nations.

In Austria, reporting obligations arise primarily under directly applicable EU sanctions regulations and are addressed to the competent national authorities, in particular the Austrian Financial Market Authority (FMA).

Reporting Obligations Under Regulation (EU) 269/2014

Newly designated persons under the Russian and Belarusian sanctions regime must report to the Austrian financial market authority within six weeks from their designation funds located within Austria that are owned or controlled by them. Failure to comply with this reporting obligation is deemed as a sanctions circumvention.

Credit and financial institutions are required to immediately freeze funds and economic resources belonging to, owned, held or controlled by designated persons and to notify the Austrian Financial Market Authority (FMA). Under Article 8 of Regulation (EU) No 269/2014, the relevant information must be provided within two weeks of becoming available to the reporting entity. In addition, Austrian financial institutions are subject to periodic reporting obligations in relation to frozen assets and blocked transactions.

Reporting Obligations Under Regulation (EU) 833/2014

Legal entities established in Austria that are more than 40% owned by a Russian legal entity, a Russian national or a person residing in Russia must report to the competent authority in Austria, within two weeks after the end of each quarter, any transfer of funds exceeding EUR100,000 out of the European Union made during that quarter, directly or indirectly, in one or several operations.

Credit and financial institutions must also report, in relation to such legal entities, all transfers of funds out of the European Union that they initiated, directly or indirectly, for such legal entities during that semester, where the cumulative amount exceeded EUR 100,000.

Austrian Sanctions Act 2024 (SanktG 2024)

A significant development is the adoption of the Austrian Sanctions Act 2024 (SanktG 2024), which entered into force in February 2025 and fundamentally modernised Austria's sanctions enforcement framework. While conduct predating the adoption of the Austrian Sanctions Act 2024 continues to be assessed under the previous legal regime (Austrian Sanctions Act 2010), the new legislation strengthens the national implementation of EU and UN sanctions and clarifies the interaction between criminal and administrative enforcement. In practice, sanctions violations may trigger liability under both the Austrian Sanctions Act and the Foreign Trade Act, particularly where export restrictions on dual-use or military goods are involved. Depending on the applicable legal basis, limitation periods and available penalties differ considerably, highlighting the importance of correctly classifying the alleged infringement at an early stage of any investigation.

Change of the Competent Sanctions Authority (NCA)

From 2026, the competence for the release of frozen funds and for other related matters (eg, reporting obligations reg frozen assets) shifted from the Austrian National Bank to the Austrian Financial Market Authority (FMA). Applicants who wish to release frozen funds held with the Austrian financial institutions must address their request online through the “incoming platform” of the FMA.

Preliminary Ruling of CJEU on the Limits of Freeze of Shareholder Rights of a Sanctioned Person

In terms of court decisions, a ruling issued by the European Court of Justice (CJEU) in relation to the shareholder rights of sanctioned persons concerned also an Austrian case. Though the CJEU ruling concerned questions submitted for a preliminary ruling by a Dutch court (C-465/24, SBK Art), an Austrian court referred essentially the same questions to the CJEU, namely, to what extent shareholder rights of a sanctioned person must be frozen. After the CJEU decided in the Dutch case that essentially all shareholder rights must be fully and unconditionally frozen, including the right to attend a shareholder meeting and cast a vote, the Austrian case became obsolete and was withdrawn because the ruling in the Dutch case applied to the Austrian cases accordingly.

In general, rulings of the CJEU impact Austria directly, especially when the CJEU interprets EU sanctions law. A noteworthy decision by the CJEU concerned “ownership” and “control” (C-84/24, EM Systems). The CJEU confirmed that assets owned by a non-listed legal entity which is in turn owned for 50 percent or more by a sanctioned person may be presumed “controlled” by the sanctioned person, and, thus, be frozen. The concerned non-listed entity may rebut the presumption by demonstrating that all or part of the assets are not in fact controlled by the sanctioned person.

Austria was admonished by the EU Commission for not having timely implemented the Directive (EU) 2024/1226 of the European Parliament and of the Council of 24 April 2024 on the definition of criminal offences and penalties for the violation of Union restrictive measures. It can be expected that Austria will fully implement the Directive (EU) 2024/1226 into national law sooner to avoid the European Commission  initiating infringement procedures and referring the case to the Court of Justice of the European Union with a request for financial sanctions.

Austria does not have a unilateral national list of designated persons because Austria does not impose unilateral sanctions. Persons designated by the European Union under the applicable EU sanctions regimes are deemed as “sanctioned” in Austria as a consequence of direct implementation of EU-Regulations. The delisting procedure takes place at the level of the court of the European Union, namely, the General Court and the Court of the European Union. Whereas, the General Court hears delisting cases in the first instance, the Court of the European Union is the appeals court for such cases. To launch a case, the designated person lodges an action for annulment of the listing acts (ie, the legal act by which the designated person was included in the annex to the applicable sanctions regulation). In addition to the court proceeding, a designated person may address the Council of the European Union in a request for reconsideration. In such request, the Council of the European Union may review the listing grounds and reconsider the designation.

A successful delisting challenge in the Union Courts can lead to the removal of the designated person from the respective sanctions list. However, if the designated person prevails in court, the respective person will not be automatically delisted by the Council of the European Union. In practice, a situation may occur where the Council of the European Union maintains the designation of the concerned person by slightly amending the reasons for the designation upon the extension of sanctions (which occurs every six months in case of individual sanctions against Russia and Belarus [on 18 June 2026 the sectoral sanctions on Russia were for the first time extended for a full 12 months]).

However, in a recent judgement the General Court of the European Union ruled in a 're-listing' case that the Council of the European Union failed to fulfil its duty and to comply with the delisting decision (see T 693/25, Maya Tokareva v Council).

It remains to be seen if the Council of the European Union will in future be more amenable to follow delisting decisions of the General Court of the European Union. Therefore, it is recommended for designated persons to request from the Council of the European Union a reconsideration of the designation. The action for annulment to the General Court and the request for reconsideration to the Council are two separate procedures and can run simultaneously. Unlike in other jurisdictions (such as the UK or the US), it is not required to complete the request for reconsideration before addressing the General Court with an action for annulment of the designation.

The duration of the delisting process depends on which route one has taken to obtain a delisting. The fastest is through the Council of the European Union by way of a request for reconsideration. If one can convince the Council of the European Union that a designation occurred without sufficient grounds, the Council of the European Union will not extend the sanctions upon its re-evaluation of the sanctions. However, such cases are rather rare, and a delisting usually requires a successful challenge of the listing in court. From the date of listing until the judgement, one should expect an average of one and a half years if only one relisting is challenged. An appeal will last at least another year.

Note in this context, that if a designated person has successfully challenged a delisting act, the Council of the European Union may still re-list the designated person under the same or slightly amended listing grounds.

Finally, some member states (ie, Poland, the Czech Republic, Croatia and, to a certain extent, Lithuania) adopt unilateral national sanctions lists and impose sanctions against the persons, who are not sanctioned by the European Union. In practice, such national listing has often the same effects as an EU listing within the territory of the respective member state, especially when dealing with banks. The legality of such national measures is questionable in light of the EU treaties and case law of the Court of Justice of the European Union, and is disputed in many cases. The judicial challenge and the administrative review in such cases should be made to the national competent courts and sanctions authorities in the member state.

EU sanctions apply directly in Austria and, therefore, the EU service restrictions apply in Austria. The prohibitions depend on the exact sanctions regime. For example, under the Russian and Belarusian sanctions regime, Austrian service providers are prohibited from providing several services to Russian/Belarusian legal entities or to the Russian/Belarusian government.

Scope of the Service Restrictions

The prohibition covers services regarding accounting, business consultancy, tax, public relations, architecture and engineering, legal advisory, cyber security, marketing and sales, artificial intelligence and IT consultancy services. In relation to the Iranian sanctions regime, the provision of services that contribute to Iran's nuclear capabilities are prohibited.

Derogations and Exceptions

Derogations and legal exceptions exist. The right to a lawyer especially cannot be infringed and, therefore, the prohibition to provide legal advisory services essentially does not apply to legal advisory services that are strictly necessary for the exercise of the right of legal defence in judicial proceedings and the right to legal remedies.

Intra-Group services

Moreover, intra-group services may be continued if the service provider obtains a derogation. Such derogation may be obtained if the service provider and the recipient are owned or controlled by a legal entity incorporated in the European Union or in a “partner country” (ie, US, Japan, UK, South Korea, Australia, Canada, New Zealand, Norway, Switzerland Liechtenstein and Iceland) and if the services are for the exclusive use of such subsidiaries.

The Austrian authority issues the derogation usually for two years. The applicant may apply for several services in one application. Upon the expiry of a derogation, the applicant can apply for an extension of the derogation and – to the extent necessary – add new services to be covered by the derogation.

EU sanctions apply in Austria and, therefore, the respective EU prohibitions apply directly as well. Under the Russia and Belarus sanctions regime, a plethora of restrictions apply regarding the export and import of goods.

For instance, it is prohibited to export goods to Russia or Belarus which (inter alia):

• are dual-use products in the sense of the Dual-Use Regulation;
• might contribute to Russia’s (or Belarus’s) military and technological enhancement, or the development of the defence and security sector;
• are suited for use in oil refining and liquefaction of natural gas;
• are suited for use in aviation or the space industry; or
• could contribute in particular to the enhancement of Russian/Belarusian industrial capacities.

Under the EU's Iran sanctions regime, the export of certain goods is restricted as well. Goods covered by prohibitions are (inter alia) dual-use goods and goods that could be used in nuclear enrichment-related activities, certain naval equipment, certain software, equipment used in the energy sector or gold, precious metals and diamonds.

Most EU sanctions regulations include a so-called “no-claims” clause. Austrian courts must directly apply such clauses when dealing with litigation that involves a sanction issue.

The no-claims clause essentially states that an EU person cannot satisfy a claim under a contract, the performance of which has been affected in whole or in part by prohibitions set forth in the EU sanctions regulation at issue.

Though, the standard language of a no-claims clause especially (but not exclusively) mentions the claims for indemnity or any other claim of this type, such as a claim for compensation or a claim under a guarantee, notably a claim for extension or payment of a bond, guarantee or indemnity, particularly a financial guarantee or financial indemnity, it has been clarified in a recent request for a preliminary ruling by an Advocate General of the European Court of Justice (C-802/24 Reibel) that the term “claim” ought to be interpreted broadly. This is because the no claims clause expressly refers to “any contract” or “any transaction affected directly or indirectly, in whole or in part” by the applicable sanctions regulation. Though, the European Court of Justice has on the date of writing (August 2026) not issued a ruling, opinions of the Advocates General are followed in the majority of cases.

It can be argued therefore, that an EU operator cannot perform any claims under a contract if the performance of such claim is affected directly or indirectly, in whole or in part, by the applicable EU sanctions and if the performance of such claim is essentially made by a person from a sanctioned state or a designated person.

The no-claims clause, however, does not preclude the parties to the contract to seek judicial review and to ask a court whether the no-claims clause applies to the claim at issue. The court must consider directly applicable EU law ex officio and rule in favour of the EU operator if the no-claims clause applies.

Following the successive amendments to the EU sanctions framework, culminating in the 18th EU sanctions package, Austrian courts are expected to refuse the recognition or enforcement of judgments and arbitral awards that would require an EU operator to act in breach of EU sanctions. Likewise, where the seat of arbitration is in Austria, arbitral awards may be set aside or refused enforcement if they are incompatible with EU public policy as reflected in the EU sanctions regime.

The 18th EU sanctions package, adopted on 18 July 2025, significantly reinforced the interaction between sanctions law and dispute resolution by elevating the “no-claims clause” under Regulation 833/2014 to a matter of EU public policy. As a result, member states may refuse to recognise or enforce foreign judgments or arbitral awards where doing so would effectively compensate a party for losses arising from another party's compliance with EU sanctions. The package also introduces specific measures in the field of investor-state arbitration, requiring member states to oppose the recognition and enforcement of awards that conflict with EU sanctions. In addition, designated claimants and, in certain circumstances, entities within their corporate group may become liable for damages suffered by EU parties as a result of sanctions-related proceedings.

Recent case law from neighbouring jurisdictions illustrates a broader European trend. On 13 May 2025, the Higher Regional Court of Stuttgart held that the enforcement of an arbitral award that would result in a breach of EU sanctions must be suspended. On 13 March 2026 the Swiss Federal Supreme Court ruled that, in debt enforcement proceedings initiated by a company controlled by a sanctioned person, sanctions create a statutory deferral that prevents enforcement for as long as the relevant sanctions remain in force, while the claim itself continues to exist. The practical application of these principles in Austria remains to be seen.

Austria has not yet imposed its own economic sanctions. Thus, persons designated by the EU are deemed as 'sanctioned' in Austria; EU sanctions regulations apply directly in Austria. However, the Ministry of Finance or the Ministry of Interior, after consultation with the Ministry of European and International Affairs, may propose to the United Nations or the European Union the designation of a person, provided that such person fulfils a listing ground as set forth by the UN or the EU under a specific sanctions regime, a direct territorial or personal nexus to Austria exists and the designation promotes Austrian security interests and does not contradict Austria's obligations under EU and international law.

Entities that are owned or controlled by a designated person are strictly speaking not deemed “sanctioned” or “designated” under a sanctions regime for these entities do not fall under any of the applicable listing grounds. However, their assets may be subject to financial restrictive measures if a designated person owns or controls such non-listed legal entity (knock on effect of sanctions). In practical terms, such entity is indirectly sanctioned.

Guidance on Ownership and Control

To determine whether or not a non-listed entity is owned or controlled, Austrian operators, courts and authorities follow the Frequently Asked Questions of the EU Commission on the implementation of Regulation 833/2014 and Regulation 269/2014 and the Best Practices of the Council of the European Union for the effective implementation of financial restrictive measures. Though, these guidance documents are not binding, the factors to determine ownership or control are accepted throughout the European Union. Recently, in relation to the sanctions against Russia, the European Union has introduced into Regulation 269/2014 the definition of the terms “ownership” and “control” (these definitions were originally introduced in 2001, in a sanctions regulation on combating terrorism).

A designated person “owns” a legal entity if the person holds 50 or percent of the proprietary rights of the legal entity (eg, shares). A designated person may exert “control” if such person essentially can control the management or strategy of the concerned legal entity. This covers the right to appoint or remove the majority of the management board of the legal entity or the holding of the majority of the voting rights in the legal entity. Another factor for control is the right of the designated person to use the assets of the legal entity (often decisive when assessing property companies that own high-end luxury goods, such as vessels or real estate).

Substance Over Form

Crucially, the principle of “substance over form” applies when determining “control”. It is irrelevant who the legal owner of an asset is; it is also irrelevant if constitutional documents of a legal entity limit or exclude any rights of a designated person vis-à-vis the legal entity and its assets. If the designated person can de facto exert influence that amounts to “control”, the assets of the concerned legal entity are to be frozen.

To better assess such scenarios of de facto control, the Council of the European Union introduced in the Best Practices several indications according to which it is likely that a designated person maintains control over a legal entity or its assets. These indications include, among others, the retention of a buyback option after a designated person sold a business to a third person (often a management buyout), use of strawmen (often close family members or associates), use of needlessly complex corporate structures or trusts. Moreover, a telling indication is the sale of a business by the designated person shortly before the inclusion of said person into the applicable sanctions list.

It is for the operator to assess the structure of a legal entity and decide whether a designated person has ownership or control. Once ownership or control has been established, the operator may presume that the assets of the concerned non-listed legal entity are controlled by the designated person. Consequently, these assets may be frozen. However, the presumption of control is rebuttable, and the concerned legal entity may demonstrate that all or part of its assets are not (anymore) controlled by the designated person. For the operator it is paramount to treat each case individually as excessive application of freezing measures may also lead to damage claims against them, if the asset freeze is imposed excessively and without sufficient basis. Accordingly, blocking all assets and refusing to engage solely for fear of breaching sanctions may not constitute an appropriate defence for an operator.

Firewall

Following the European Commissions “Guidance Note on Implementation of Firewalls in cases of EU entities owned or controlled by a designated person or entity” a so-called “firewall” may be implemented. A firewall is a complex of compliance and ringfencing measures that can be adopted by the legal entity which is associated with a sanctioned person and whose funds are, therefore, frozen. The firewall aims to eliminate control by the sanctioned person over the legal entity and its assets, and to prevent such person from accessing them. If successfully implemented and – to the extent possible – acknowledged by the competent sanctions authority, the assets of such legal entity ought to be released and funds or economic resources ought to be made available again.

Austrian Particularities

In Austria, the fact that assets of a non-listed legal entity are frozen may be displayed by way of an annotation in the commercial register excerpt of the concerned legal entity. The court includes such annotation regarding the asset freeze upon notification by the Ministry of the Interior. The concerned non-listed entity may challenge the inclusion of such annotation in the commercial register. If the legal entity can demonstrate that it is in fact not owned or controlled by a designated person, the court will remove the annotation from the commercial register, and the assets concerned are not deemed frozen. Should an Austrian operator still refuse to “unfreeze” the assets despite the removal of the annotation (eg, a bank refuses to unblock the account), the concerned legal entity could lodge a civil claim and argue that the operator is excessively applying sanctions.

Furthermore, with our team's contribution, Austria has developed a rather unique practice in relation to the recognition and the acknowledgement of a firewall. Unlike other member states, Austria is amenable to review the implemented firewall measures and to approve the firewall. Moreover, Austria even considers firewall-related decisions issued in other member states in relation to the company concerned. This practice safeguards the uniform application of EU sanctions throughout the European Union and should serve as an example to other member states.