Corporate crime, fraud and investigations in Austria: overview

A Q&A guide to corporate crime, fraud and investigations in Austria.

The Q&A gives a high level overview of matters relating to corporate fraud, bribery and corruption, insider dealing and market abuse, money laundering and terrorist financing, financial record keeping, due diligence, corporate liability, immunity and leniency, and whistleblowing.

To compare answers across multiple jurisdictions, visit the Financial and Business Crime Country Q&A tool.

This Q&A is part of the multi-jurisdictional guide to corporate crime, fraud and investigations law. For a full list of jurisdictional Q&As visit www.practicallaw.com/corporatecrime-mjg.

Contents

Fraud

Regulatory provisions and authorities

1. What are the main regulatory provisions and authorities responsible for investigating corporate or business fraud?

Regulatory provisions

As far as criminal provisions are concerned, the Austrian Penal Code (Strafgesetzbuch) (StGB) contains the main provisions regarding fraud. In particular, the relevant sections pertaining to fraud are sections 146 to 148 of the StGB. These are the general rules applicable to corporate and business fraud. There are other specific supplementary criminal statutes governing financial crime, for example, tax fraud regulated by the Act on Financial Crime (Finanzstrafgesetz) (FinStrG). With regard to fraudulent conduct and criminal liability in a corporate context (more precisely, falsification of balance sheets), there are penal provisions in the Stock Corporation Act (Aktiengesetz) (AktG) and in the Act on Private Limited (Liability) Companies (GmbHG).

Certain special provisions relating to the liability of associations are conclusively regulated in the statute on the responsibility of legal entities (Verbandsverantwortlichkeitsgesetz) (VbVG).

Regulatory authorities

The Public Prosecutor's Office (Staatsanwaltschaft) (StA) is the main body responsible for investigating and prosecuting fraud offences.

In addition, the Federal Bureau of Anti-Corruption (Bundesamt zur Korruptionsprävention und Korruptionsbekämpfung) (BAK) is an institution of the Austrian Federal Ministry of the Interior with nationwide jurisdiction in the following areas:

  • Prevention of and the fight against corruption.

  • Close co-operation with the Public Prosecutor's Office for White-Collar Crime and Corruption (WKStA). The WKStA's competence covers serious corruption in economic life involving cases exceeding EUR5 million including falsification of balance sheets and financial criminal offences of larger companies.

  • Security police and criminal police co-operation with foreign and international anti-corruption institutions.

Finally, the financial police are a national anti-fraud unit combating fiscal fraud.

For more information on the StA and BAK, see box, The regulatory authorities.

Offences

2. What are the specific offences relevant to corporate or business fraud?

The specific offences regulated in the Austrian Penal Code (StGB), the Act on Financial Crime (Finanzstrafgesetz) (FinStrG), the Stock Corporation Act (Aktiengesetz) (AktG) and the Limited (Liability) Companies Act (GmbHG) are as follows.

Fraud (section 146, StGB)

To commit fraud the perpetrator must wilfully induce an erroneous belief in another person, affect the financial interests of the other person and cause that person to act to the prejudice of his or another's financial interests.

An attempt to commit the above is also punishable.

Serious fraud (section 147, StGB)

Serious fraud involves a deception including incorrect evidence, for example, a forged document, falsified data cashless payments or false measuring instruments.

Commercial fraud (section 148, StGB)

The perpetrator acts commercially if he acts with the intention of obtaining regular income by repeatedly committing the offence.

Misappropriation (section 133, StGB)

Any person who appropriates an asset that has been entrusted to him or a third person, with the intent of unlawfully enriching themselves or third parties commits misappropriation.

Embezzlement and breach of trust (section 153, StGB)

A person commits embezzlement if he:

  • Abuses his power over the property of another person.

  • Causes damage to the other party by:

    • disposing of the assets;

    • making binding agreements on behalf of the other person; or

    • violating his duty to safeguard the property interests of the other party.

Criminal intent is required.

Accounting fraud (section 255, AktG or section 122, GmbHG)

It is a criminal offence for a member of a representative body or the board of directors to misrepresent or conceal the state of affairs of a corporate body in any of the following:

  • Annual report.

  • Public invitation to invest in the company.

  • Report to the auditor.

  • Status report.

  • Report to the board of directors.

Enforcement

3. What are the regulator's powers of investigation, enforcement and prosecution in cases of corporate or business fraud and what are the consequences of non-compliance?

Trial procedure is set in the Code of Criminal Procedure (Strafprozessordnung) (StPO). Every investigation starts with a private complaint or through an internal investigation by the police or the Public Prosecutor's Office. The Public Prosecutor's Office is in charge of any investigation concerning a criminal charge. The preliminary investigation is conducted by the Criminal Investigation Department, which can only take measures ordered by the Public Prosecutor's Office. Enforcement measures include:

  • Seizure of objects (section 110, StPO).

  • Verification of identity and search of places, people and objects (sections 118 and 119, StPO).

  • Observation and undercover investigations (sections 130 and 131, StPO).

  • Interrogation (section 153, StPO).

The decision whether the accused is charged with a crime, in this case, fraud, lies with the Public Prosecutor's Office.

Penalties

4. What are the potential penalties or liabilities for participating in corporate or business fraud?

Civil/administrative proceedings or penalties

There are no administrative sanctions for participating in corporate or business fraud.

Criminal proceedings

The potential criminal sanctions are as follows:

  • Fraud (section 146, Austrian Penal Code (StGB)): imprisonment for up to six months or a fine.

  • Serious fraud (section 147, StGB): imprisonment for up to three years or in particularly serious cases, up to ten years.

  • Commercial fraud (section 148, StGB): imprisonment from six months to up to five years or in particularly serious cases, one to ten years.

  • Misappropriation (section 133, StGB): imprisonment for up to six months or a fine and in particularly serious cases, imprisonment for up to ten years.

  • Embezzlement and breach of trust (section 153, StGB): imprisonment for up to six months or a fine and in particularly serious cases, imprisonment for up to ten years.

  • Accounting fraud (section 255, or section 122, Limited (Liability) Companies Act (GmbHG)): imprisonment for up to one year or a fine.

Civil suits

An injured party can bring a civil lawsuit against the perpetrator to recover the damage and losses it suffered as a result of a crime, either connected to the criminal trial or afterwards at a civil court.

The Austrian Civil Procedure Code does not specifically contain provisions governing class actions. The Austrian Supreme Court holds a class action permissible under the conditions of section 227 of the Civil Procedure Code (ZPO) (which allows consolidating claims of the same applicant against the same defendant).

The ZPO does not provide for the possibility of punitive damages.

 

Bribery and corruption

Regulatory provisions and authorities

5. What are the main regulatory provisions and authorities responsible for investigating bribery and corruption?

In general, criminal liability arises under the Austrian Penal Code when someone grants an unlawful advantage (active bribery) or accepts such advantage (passive bribery). The Austrian Penal Code differentiates between whether the recipient of the unlawful advantage was a public or a private person. It matters whether the recipient of the unlawful advantage carries out a legal act contrary to their duty. The receipt of an unfair advantage in either case will lead to criminal liability.

The authority responsible for investigating bribery and corruption is the Public Prosecutor's Office for White-Collar Crime and Corruption (WKStA). The competence of the WKStA is settled in section 20a of the Code of Criminal Procedure (StPO). WKStA's powers cover serious corruption in economic life exceeding an amount of EUR5 million including falsification of the balance sheet and financial criminal offences of larger companies.

For more information on the regulatory authorities, see box, The regulatory authorities.

 
6. What international anti-corruption conventions apply in your jurisdiction?

The following international anti-corruption conventions apply in Austria:

  • Criminal Law Convention on Corruption (ETS 173) and Additional Protocol to the Criminal Law Convention on Corruption (ETS 191).

  • UN Convention Against Corruption 2003.

  • Council Framework Decision 2003/568/JHA of 22 July 2003 on combating corruption in the private sector (Article 445-1, Criminal Code).

  • The Convention on the fight against corruption involving officials of the European Communities or officials of Member States of the EU 1997.

  • Article K.3 of the Treaty on European Union, on the protection of the European Communities' financial interests including the first and second protocol.

  • OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions.

Offences

7. What are the specific bribery and corruption offences in your jurisdiction?

Foreign public officials

A foreign public official is defined as a person working for a foreign state, performing administrative tasks for their state in Austria. These foreign public officials can be made equal to a domestic public official either by law or intergovernmental agreements.

Domestic public officials

Both active and passive bribery are unlawful under Austrian law. The crime of bribery is committed by the acts of offering, promising or granting an advantage in return for a legal act contrary to their duty. There is no such thing as a threshold for bribery.

Private commercial bribery

Both active and passive bribery are unlawful in the public sector. It is a criminal offence for an employee to demand, accept or allow himself to be promised a personal or third party benefit in a business transaction as consideration for undutiful conduct or omission of a business transaction (section 309, Austrian Penal Code (StGB)).

The Public Prosecutor's Office for White-Collar Crime and Corruption (WKStA) has the power to deal with the following matters:

  • Abuse of official authority (section 302, StGB) (*).

  • Corruptibility (section 304, StGB) (*).

  • Acceptance of advantages (section 305, StGB) (*).

  • Acceptance of an advantage for the purpose of exerting influence (section 306, StGB) (*).

  • Bribery (section 307, StGB) (*).

  • Offering an advantage (section 307a, StGB) (*).

  • Offering an advantage for the purpose of exerting influence (section 307b, StGB) (*).

  • Illicit intervention (section 308, StGB) (*).

  • Breach of official secrecy (section 310, StGB) (*).

  • Acceptance of gifts by rulers (section 153a, StGB) (*).

  • Agreements restricting competition in procurement procedures (section 168b, StGB) as well as serious fraud (section 147, StGB) and commercial fraud (section 148, StGB) on the basis of such agreement (*).

  • Breach of trust due to abuse of an official function or due to involvement of an office holder (section 153 paragraph 2 case 2, 313 or in connection with section 74 paragraph 1 no. 4a, StGB) (**).

  • Acceptance of gifts and bribery of employees or agents (section 309, StGB) (**).

  • Money laundering (section 165, StGB), provided that the assets arise from the above mentioned offences, especially those marked (*)

  • Criminal associations or organisations (sections 278 and 278a, StGB), provided that they intend to commit the offence in conjunction with the above mentioned offences, especially those marked (*).

  • Acts punishable pursuant to the StGB and supplementary laws, provided that they are related to any of the offences marked (*) and (**) above and must be prosecuted by the BAK by written order of a court or a public prosecutor's office.

  • Acts punishable pursuant to the StGB and supplementary laws that are committed by public employees of the Federal Ministry of the Interior, provided that they have to be prosecuted by the BAK by written order of a court or a public prosecutor's office.

Defences

8. What defences, safe harbours or exemptions are available and who can qualify?

The Austrian Penal Code contains exceptions for members of the National Council (Nationalrat), the Federal Council (Bundesrat) and state parliament (Landtag). These individuals are exempt when carrying out acts in accordance with their legal duties. A company is exempt from liability if it can prove that it took adequate procedures to prevent associated persons from violating the Penal Code. There is also an exemption in respect of bribery of an elected official if the company abandons the unlawful conduct before the authority's knowledge of the company's liability.

 
9. Can associated persons (such as spouses) and agents be liable for these offences and in what circumstances?

Companies may also be held liable under the Austrian Act on Corporate Criminal Liability (Verbandsverantwortlichkeitsgesetz), if an employee or a decision maker violates the prohibition of corruption in order to achieve a business advantage for the company. Under the Act, passive bribery also leads to liability. As the scope of employees is restricted to natural persons, a company cannot be held liable for the conduct of other associated or independent legal persons. Therefore, no liability arises, for example, for the conduct of a subsidiary.

Enforcement

10. What are the regulator's powers of investigation, enforcement and prosecution in cases of bribery and corruption and what are the consequences of non-compliance?

Although some aspects fall under the competence of the Public Prosecutor's Office for White-Collar Crime and Corruption, trial procedure remains the same as general cases of fraud. For further information, see Question 3.

Penalties

11. What are the potential penalties for participating in bribery and corruption?

Civil/administrative proceedings or penalties

Public officials can face disciplinary charges that can result in their removal from public service.

Criminal proceedings or penalties

Public officials found guilty of bribery face a penalty of imprisonment for up to two years (in respect of sums over EUR50,000, the maximum penalty is imprisonment from six months to five years). The person bribing the public official faces a penalty of imprisonment for up to three years (in respect of sums over EUR50,000, the maximum penalty is imprisonment for one to ten years).

In the private sector, the penalty for accepting or offering a bribe is imprisonment for up to two years (in respect of sums over EUR50,000, this rises to imprisonment from six months to five years).

Only in severe cases are employees or decision makers imprisoned for a maximum of ten years (the maximum monetary fine is EUR1.3 million).

Tax treatment

12. Are there any circumstances under which payments such as bribes, ransoms or other payments arising from blackmail or extortion are tax-deductible as a business expense?

Bribes, ransoms or payments arising from blackmail and extortion are not tax-deductible in Austria.

 

Insider dealing and market abuse

Regulatory provisions and authorities

13. What are the main regulatory provisions and authorities responsible for investigating insider dealing and market abuse?

The Public Prosecutor's Office is responsible for investigating insider dealing and market abuse.

In addition, the Financial Market Authority (FMA) has investigatory power.

For more information on the regulatory authorities, see box, The regulatory authorities.

Offences

14. What are the specific insider dealing and market abuse offences?

Insider dealing (section 48a, Stock Exchange Act (BörseG)). It is prohibited to use non-public information to obtain property gain for oneself or third parties, whether by buying or selling stock or disclosing this information.

Market manipulation (section 48a, BörseG). Market manipulation is a broad-faced criminal offence. There are several forms of market manipulation:

  • To provide false or misleading information about relevant circumstances for valuation of financial instruments or to withhold information contrary to existing statutory provisions, when providing or withholding such information is likely to cause unnatural or artificial stock prices.

  • In addition, section 48a lists a number of actions that are always perceived as market manipulation.

Defences

15. What defences, safe harbours or exemptions are available and who can qualify?

There is one exception concerning insider trading where a stock company buys its own stocks under the conditions of section 65 of the Stock Corporation Act (AktG).

Enforcement

16. What are the regulator's powers of investigation, enforcement and prosecution and what are the consequences of non-compliance?

The FMA (Financial Market Authority) has investigatory power, but has to transmit suspicious activities concerning insider trading to the Public Prosecutor's Office. Cases of market manipulation are solely prosecuted by the FMA.

For information on the powers of the Public Prosecutor's Office, see Question 3.

Penalties

17. What are the potential penalties for participating in insider dealing and market abuse?

Civil/administrative proceedings or penalties

The Austrian Stock Exchange does not provide civil sanctions for insider infringements with regard to bans on insider trading or protecting the interests of individual investors. This arguably demonstrates that section 48i of the Stock Exchange Act (BörseG) can be understood as a protection act within the meaning of Section 1311 of the Allgemeine Buergerliche Gesetzbuch (ABGB) in favour of the remaining market players.

Criminal proceedings or penalties

The Financial Market Authority (FMA) must report any reasonable violations against the insider dealing law to the prosecution (section 48i Abs.3, Stock Exchange Act (BörseGe)). The prosecution can delegate that the FMA initiate further criminal investigations.

Civil suits

If all the requirements apply, the foundation for damage claims against insiders subsists.

 

Money laundering, terrorist financing and/or breach of financial/trade sanctions

Regulatory provisions and authorities

18. What are the main regulatory provisions and authorities responsible for investigating money laundering, terrorist financing and/or breach of financial/trade sanctions?

Money laundering

The main criminal law provision is section 165 of the Austrian Penal Code (StGB). More provisions are provided in the:

  • Austrian Banking Act (BWG).

  • Insurance Supervision Act (VAG).

  • Securities Supervision Act (WAG).

In addition, the Trade, Commerce and Industry Regulation Act (Gewerbeordnung), the Gaming Act (Glücksspielgesetz) and the Attorneys and Notaries Code (RAO and NO) contain important provisions.

For more information on the regulatory authorities, see box, The regulatory authorities.

Terrorist financing

The main criminal provision is section 278d of the StGB.

More provisions are provided in the same Acts as stated above, see Money laundering.

Breach of financial/trade sanctions

The main criminal provision is section 79-84 of the Austrian Foreign Trade Act 2011 (AußWG 2011).

For more information on the regulatory authorities, see box, The regulatory authorities.

Offences

19. What are the specific offences relating to money laundering, terrorist financing and breach of financial/trade sanctions?

Money laundering

Money laundering is considered a three step offence:

  • Placement.

  • Layering.

  • Integration.

The money in question can derive from any kind of crime. There must be the intention to integrate the money in a business cycle.

The following specific activities concerning money laundering are forbidden by the Penal Code:

  • Concealing.

  • Disguising the nature and source.

  • Obtaining (surreptitiously).

  • Detaining money.

  • Investing.

  • Administrating and managing of money.

  • Commuting.

  • Utilising and transferring to a third party.

A mere attempt is also punishable.

Terrorist financing

Terrorist financing covers the provision of assets to support terrorism (for example, kidnapping with ransom demands and aircraft hijacking). A mere attempt is also punishable.

Breach of financial/trade sanctions

Breach of financial/trade sanctions cover the import, export, implementation, preparation or technical support of goods to third countries or EU-member states:

  • Without having a permission.

  • By obtaining the permission by trickery.

  • By breaching financial/trade sanctions or embargos.

  • By exporting goods to another country to evade financial/trade sanctions or embargos.

  • By using an outdated/withdrawn/someone else's permission.

  • By violating an obligation to report or provide proof or a prescripted permission or report of the permission.

In general, breach of financial/trade sanctions by negligence is a criminal offence.

For more information on the regulatory authority, see box, The regulatory authorities.

Defences

20. What defences, safe harbours or exemptions are available and who can qualify?

Active repentance can lead to impunity (section 165a, Austrian Penal Code (StGB)). The participant must inform the authorities before any investigation has started and must secure the concerned assets.

Money laundering

Active repentance can lead to immunity (section 165a, Austrian Penal Code (StGB)). The participant must inform the authorities before any investigation has started and must secure the concerned assets.

Terrorist financing

In the case of terrorist financing, the offender does not have the advantage of immunity. Active repentance cannot lead to immunity.

Breach of financial/trade sanctions

A negligent breach of financial/trade sanctions is punished with more leniency.

For more information on the regulatory authority, see box, The regulatory authorities.

Enforcement

21. What are the regulator's powers of investigation, enforcement and prosecution and what are the consequences of non-compliance?

Money laundering

If there is any indication of money laundering a complaint must be made to the registration office for money laundering (Geldwäschemeldestelle) (see Question 3).

Terrorist financing

See Question 3.

Breach of financial/trade sanctions

The court as well as the prosecution may use customs and fiscal authorities for the investigation of the offence.

See Question 3.

For more information on the regulatory authority, see box: The regulatory authorities.

Penalties

22. What are the penalties for participating in money laundering, terrorist financing offences and/or for breaches of financial/trade sanctions?

Money laundering

Money laundering is a criminal offence. There are no administrative sanctions.

A lawyer is under a duty to inform the Federal Criminal Agency, if he has reasonable suspicion that his client is involved in money laundering (section 8a, RAO, Legal Practitioner Law). Violation of this obligation can lead to disciplinary proceedings by the bar association. The penalty for money laundering is imprisonment for up to three years. In particularly serious cases, the penalty is imprisonment from one to ten years.

Terrorist financing

Terrorist financing is a criminal offence, see above, Money laundering. The penalty for terrorist financing is imprisonment from one to ten years.

Breach of financial/trade sanctions

The breach of financial/trade sanctions is a criminal offence (see Questions 19, 20 and 21, Breach of financial/trade sanctions). The penalty for breaching financial/trade sanctions is imprisonment for up to two (within the EU) or three (within third countries) years. In particularly serious cases, the penalty is imprisonment for up to three (within the EU) or five (within third countries) years. If ABC-weapons (that is, weapons of mass destruction) are involved, terms of imprisonment can extend from one to ten years.

 

Financial record keeping

23. What are the general requirements for financial record keeping and disclosure?

Generally, financial records must be kept for seven years. However, there are several exceptions to this general rule. The maximum period is the absolute limitation period of 30 years.

 
24. What are the penalties for failure to keep or disclose accurate financial records?

Missing documents and records can lead to an inability to satisfy the burden of proof and also the ability of authorities to exercise their right to perform a valuation according to section 184 of the Austrian Fiscal Code (BAO).

Sanctions exist in various ancillary laws. The main offence is summarised under the term "falsification of the balance sheet", which is not limited to this document, but to all kinds of financial records.

By way of example, section 255 of the Stock Corporation Act (AktG) provides sanctions for the following:

  • Incorrect reproduction.

  • Disguise or non-disclosure of relations concerning the corporation (for example, the company's financial situation) other companies connected with it, and other significant circumstances, especially through giving incorrect information about:

    • the annual financial statements;

    • its report on the economic situation; and

    • any other reports according to the accounting rules.

Similar sanctions are contained in:

  • Section 122 of the Limited Liability Company Act (GmbHG).

  • Section 89 of the Cooperative Society Act (GenG).

  • Section 41 of the Private Foundation Act (PSG).

  • Section 114 of the Insurance Control Act (VAG).

  • Section 18 of the Splitting Act (SpalG).

  • Section 43 of the Law Regulating Public Television (ORF-Gesetz).

 
25. Are the financial record keeping rules used to prosecute white-collar crimes?

Keeping financial records for seven years plays an important part in criminal prosecution, the main reason is that knowledgeable offenders frequently manipulate their financial records.

Non-compliance with financial record-keeping rules can lead to criminal liability as well as administrative penalties. Any incorrect information improperly recorded in the financial records can lead to a prosecution.

There are two aspects of compliance with the record-keeping rules:

  • Non-compliance can lead to criminal sanctions (see Question 24).

  • Non-compliance can also result in administrative penalties. The Accounting Control Act (Rechnungslegungs-Kontrollgesetz) gives the Austrian Financial Market Authority the right to control compliance with the record-keeping rules. According to this law, a company's employees and auditors must assist the Market Authority in its investigations. Giving the Authority incomplete or incorrect information makes the company liable to prosecution.

 

Due diligence

26. What are the general due diligence requirements and procedures in relation to corruption, fraud or money laundering when contracting with external parties?

The performance of a due diligence is not mandatory in Austria. However, particularly in respect of the management of the buyer (for example, the CEO or board of directors), failure to obtain due diligence may incur legal liability. Therefore, many companies require specialists to perform due diligence in transactions. As part of a due diligence review the object of purchase can be assessed for example, by fiscal, technical, economic or legal criteria. There are no statutory due diligence requirements in relation to corruption, fraud or money laundering when contracting with external parties. However, Directive 2001/97/EC on money laundering (Money Laundering Directive) must be observed. In practice, due diligence findings form part of the contract negotiations and are incorporated in the warranty provisions.

 

Corporate liability

27. Under what circumstances can a corporate body itself be subject to criminal liability?

The liability of a corporate body is regulated by the Act on Corporate Criminal Liability (VbVG). According to the VbVG a corporate body can be held responsible if the criminal offence was committed for the corporate body's benefit (by an employee) and if the criminal offence infringed the duties of the corporate. Negligence of the corporate body is required.

 

Cartels

28. Are cartels prohibited in your jurisdiction? How are cartel offences defined? Under what circumstances can a corporate body be subject to criminal liability for cartel offences?

This question was added in the 2015/16 edition of the guide.


 

Immunity and leniency

29. In what circumstances is it possible to obtain immunity/leniency for co-operation with the authorities?

Some offences in the Austrian Penal Code contain an annex in which the possibility of active repentance is envisaged.

Leniency can be granted to a person by the Public Prosecutor's Office in the case of the voluntary disclosure of information concerning a crime that is not already being pursued by the Public Prosecutor's Office.

 

Cross-border co-operation

30. What international agreements and legal instruments are available for local authorities?

Obtaining evidence

Like many other states, Austria signed the European Convention on Mutual Assistance in Criminal Matters 1959 (Convention on Mutual Assistance in Criminal Matters).

Seizing assets

Article 5 of the European Convention on Mutual Assistance in Criminal Matters also regulates the seizure of property that is located in another state. The conditions for the application of Article 5 are that the:

  • Offence motivating the letters rogatory is punishable under both the law of the requesting party and the law of the requested party.

  • Offence motivating the letters rogatory is an extraditable offence in the requested country.

  • Execution of the letters rogatory is consistent with the law of the requested party.

Sharing information

The criminal offences mentioned in Question 2 are ex officio crimes and must therefore be prosecuted by the authorities whether reported or not. As soon as the prosecution receives information about the commission of a criminal offence, it must investigate the matter. It is irrelevant if the prosecution received the information anonymously or not.

 
31. In what circumstance will domestic criminal courts assert extra-territorial jurisdiction?

Certain legal offences are punishable in Austria even if committed abroad. For example, (section 64, Austrian Criminal Code (StGB)):

  • Counterfeiting of money.

  • High treason.

  • Aircraft piracy.

  • Acts of terrorism.

Criminal offences, not listed in section 64, are punishable in Austria if the act is deemed a criminal offence in the location of its commission.

 
32. Does your jurisdiction have any statutes aimed at blocking the assertion of foreign jurisdictions within your territory?

There are no provisions aimed at blocking the assertion of foreign jurisdictions in Austria. However, the extradition of suspects is subject to certain limitations:

  • The offence with which the suspect was charged must be punishable in both countries.

  • There must not be any risk of torture or other inhumane treatment.

  • The suspect must not be subject to the death penalty.

  • A fair trial must be guaranteed.

  • As a rule, Austrian citizens will not be extradited, except on the basis of a European warrant of arrest.

 

Whistleblowing

33. Are whistleblowers given statutory protection?

Whistleblowers are only granted protection against criminal punishment. Laws granting protection in the private sector especially against civil liability lawsuits have not yet been passed.

Whistleblowers are given the opportunity to use the official reporting systems of the Public Prosecutor's Office against Corruption (WKStA) and Financial Market Authority (FMA).

 

Reform, trends and developments

34. Are there any impending developments or proposals for reform?

Austria has faced a rising number of complex and specific white collar offences during the last few years. The high complexity of the procedures involved requires new draft legislation and structures to ensure the investigation office acts more effectively and successfully.

The new Public Prosecutor's Office against White-Collar Crime and Corruption was established on 1 September 2011. The agency has the power and the professional expertise to achieve quick and effective prosecutions in serious economic offences.

 

Market practice

35. What are the main steps foreign and local companies are taking to manage their exposure to corruption/corporate crime?

According to Austrian corporate criminal law, associations are liable for employees who breach their obligations. The responsible persons in companies must provide evidence that they undertook all reasonable efforts to ensure legal compliance and prevent criminal activities.

A breach may lead to far-reaching implications, for example, fines and claims for damages. Damage to the company's reputation and image may harm business. In addition, the employees in breach may face consequences such as fines, imprisonment, claims for damages and labour law measures involving termination of employment contract.

 

The regulatory authorities

Financial Market Authority (FMA)

Status. The FMA is an institution established under public law. It is an independent, autonomous and integrated supervisory authority for the Austrian financial market.

Principal responsibilities. There are three departments of supervision of the Austrian financial market:

  • Banking.

  • Insurance.

  • Securities.

The FMA is responsible for supervising credit institutions, payment institutions, insurance undertakings, corporate provision funds, investment funds, licensed investment service providers, credit rating agencies, and stock exchanges and prospectuses. The FMA is also responsible for monitoring trading in listed securities to ensure that it is carried out properly and for monitoring issuers' compliance with information and organisation obligations.

Public Prosecutor's Office (Staatsanwaltschaft) (Sta)

Status. The Public Prosecutor's Office is the main body responsible for investigating and prosecuting fraud offences.

Principal responsibilities. The Public Prosecutor's Office is in charge of any investigation concerning a criminal charge. The preliminary investigation is conducted by the Criminal Investigation Department, which can only take measures ordered by the Public Prosecutor's Office.

Federal Bureau of Anti-Corruption (Bundesamt zur Korruptionsprävention und Korruptionsbekämpfung) (BAK)

Status. The Federal Bureau of Anti-Corruption is an institution of the Austrian Federal Ministry of the Interior.

Principal responsibilities. Its principal responsibilities include the prevention of and the fight against corruption and close co-operation with the Public Prosecutor's Office for White-Collar Crime and Corruption (WKStA).



Online resources

The Legal Information System of the Republic of Austria

W www.ris.bka.gv.at

Description. The Legal Information System of the Republic of Austria is a platform and data base providing information on Austrian law. Its main contents are legislation in its current version (federal and state), law gazettes (federal and state) and case law.

The website is maintained by the Federal Chancellery of Austria.

The site also offers the chance to search for Austrian laws in English. However, it is not intended to provide legal advice, for this purpose a specialist should be consulted. Links to other websites were carefully selected. As the Federal Chancellery has no control over external sites it cannot assume responsibility.

RDB (Rechtsdatenbank)

W www.rdb.at

Description. Rechtsdatenbank means legal data base. The website is maintained by MANZ, a legal publishing house. RDB offer articles from various professional journals in the field of law and tax as well as an online library for legal commentaries. Some of the articles are written in English.



Contributor profiles

Mathias Preuschl, Partner and Head of the White Collar Crime Desk

PHH Prochaska Havranek Rechtsanwälte GmbH

T +43 67 68 97 008 808
F +43 17 14 24 406
E preuschl@phh.at
W www.phh.at

Professional qualifications. Lawyer and defence counsel, admitted in Austria, 1998; Commissioner of the Viennese Bar; Delegate to the Austrian Bar; Delegate of the Austrian Bar at the CCBE (IT Law Committee); Vice President of the Austrian Chapter of the ACFE (Association of Certified Fraud Examiners)

Areas of practice. Crime; business crime; IT; litigation.

Languages. German, English

Professional associations/memberships. Viennese Bar; Austrian Bar; CCBE; IBA; ACFE.


{ "siteName" : "PLC", "objType" : "PLC_Doc_C", "objID" : "1248024674873", "objName" : "Corporate crime, fraud and investigations in Austria overview", "userID" : "2", "objUrl" : "http://uk.practicallaw.com/cs/Satellite/resource/7-576-4645?null", "pageType" : "Resource", "academicUserID" : "", "contentAccessed" : "true", "analyticsPermCookie" : "2-7fcc06b0:15b1101a36f:8d3", "analyticsSessionCookie" : "2-7fcc06b0:15b1101a36f:8d4", "statisticSensorPath" : "http://analytics.practicallaw.com/sensor/statistic" }