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Trends and climate
Have there been any recent changes in the enforcement of anti-corruption regulations?
There has recently been a stronger focus on enforcement of anti-competition laws, as well as increasingly close cooperation between the Federal Competition Authority and the Central Public Prosecutor’s Office for Combating Economic Crimes and Corruption. Foreign corruption enforcement has also generally increased in Austria in concert with worldwide efforts to fight corruption, including those made by the European Union and the Group of States Against Corruption.
Are there plans for any changes to the law in this area?
The previous government, which was in power up to 2017, implemented several changes that are relevant in the field of white collar crime, including:
- the introduction of a standard time limit of three years for investigative proceedings;
- the strengthening of privilege; and
- raising the standing of private experts in court.
However, following the major reforms implemented in 2013, no bigger legislative changes are expected in this area. Rather, the current focus is on increasing the speed of enforcement. Despite successful and appreciated efforts to enhance the resources of the Austrian enforcement agencies by instituting a specialised anti-corruption authority with expert support, investigations still take too long.
The Group of States against Corruption issued its most recent recommendations for Austria in its 2016 evaluation report. These include:
- implementing rules that ensure an adequate level of transparency for legislative drafts;
- binding all prosecutors to a code of conduct; and
- providing internal rules within Parliament on gifts, hospitality and other advantages, and monitoring their enforcement.
Which authorities are responsible for investigating bribery and corruption in your jurisdiction?
Depending on the value of the assets connected to the offence and the importance of the matter, either the general public prosecutors’ offices or the Austrian Central Public Prosecutor’s Office for Combating Economic Crimes and Corruption will be responsible for investigating bribery and corruption.
What are the key legislative and regulatory provisions relating to bribery and corruption in your jurisdiction?
The key legislative provisions on bribery and corruption are located in Sections 304 to 309 of the Austrian Criminal Code.
What international anti-corruption conventions apply in your jurisdiction?
The United Nations Convention against Corruption applies in Austria.
Specific offences and restrictions
What are the key corruption and bribery offences in your jurisdiction?
The key corruption and bribery offences regarding office bearers and adjudicators can be found in Sections 304 to 308 of the Austrian Criminal Code. These cover:
- active and passive bribery;
- giving and accepting undue advantages;
- accepting benefits; and
- giving undue benefits for the purpose of interference and unlawful intervention.
Active and passive bribery derives from the unlawful execution or omission of official duties, whereas giving and accepting an undue advantage derives from the lawful execution or omission of official duties.
Accepting benefits or giving undue benefits for the purpose of interference derives not from certain specified acts or omissions, but rather from the general act of ‘grooming’. Any intervention is unlawful if it is aimed at effecting the unlawful execution or omission of official duties, or if it is associated with the offer, promise or provision of undue advantages.
Section 309 covers bribery in private companies. Any person who is an employee or representative of a company will be guilty of an unlawful acceptance of gifts where – in the course of a business transaction – he or she demands, accepts or accepts the promise of an advantage for himself, herself or a third person in return for the execution or omission of a legal act in breach of the person’s duties.
Similarly, any person will be guilty of bribery of employees and representatives where – in the course of a business transaction – he or she offers, promises or provides a benefit to an employee or representative of a company in return for the execution or omission of a legal act in breach of that person’s duties.
Are specific restrictions in place regarding the provision of hospitality (eg, gifts, travel expenses, meals and entertainment)? If so, what are the details?
Any benefit offered to office bearers and adjudicators or employees and representatives of private companies is to be evaluated based on Sections 304 to 309 of the Austrian Criminal Code.
As a rule of thumb, gifts to office bearers and adjudicators are problematic. There are few exemptions, and in general only for minor benefits that are not granted in the context of any specific mandate or – even without any causality to such a mandate – the unlawful execution or omission of an official duty.
Any acceptable benefit must be of minor value. The easier that it can be turned into money, the more critically the benefit will be considered. For benefits that have no temporary value (eg, an invitation to attend a conference or a Christmas gift), a cost of €100 should not be exceeded. A special code of conduct applies for certain groups of government officials (including judges), with zero tolerance for infraction. Nevertheless, specific exemptions exist, including for charitable donation and invitations to events in which there is an official or factual interest to participate. A detailed check of Austrian law and review of the relevant code of conduct are highly recommended.
What are the rules relating to facilitation payments?
Under Austrian law, no special provisions apply to facilitation payments.
Scope of liability
Can both individuals and companies be held liable under anti-corruption rules in your jurisdiction?
Yes, both individuals and companies can be held liable under anti-corruption rules. Legal entities – including corporate and other fictional persons – may be subject to criminal proceedings for the actions of their management or employees under the Act on Corporate Criminal Liability. For liability under the Act on Corporate Criminal Liability, the criminal offence must be either committed in favour of the entity (ie, to the benefit of the subject corporation) or constitute a breach of duties that are within the responsibility of the entity.
If the criminal act is carried out by a so-called ‘decision maker’ within the company, no further proof is needed. However, if the criminal act is committed by an employee without decisive power within the company, then the prosecution authority must show that compliance systems failed to prevent the criminal act. Thus, having a proper compliance system in place results in an ‘adequate procedures defence’, whereby – unlike in other jurisdictions – the burden of proof that no proper compliance system was implemented rests with the prosecutor. In practice, it is nevertheless highly recommended for the defence to prove that a proper compliance system had been established before the act was carried out and that it was properly adjusted after the act.
Can agents or facilitating parties be held liable for bribery offences and if so, under what circumstances?
Under Austrian criminal law, not only the immediate perpetrator, but also any person directing another or contributing in any respect to the commission of an offence is deemed to have committed that offence. Thus, agents and facilitating parties can be as easily subject to prosecution as employees or so-called ‘decision makers’ within a company.
Can foreign companies be prosecuted for corruption in your jurisdiction?
In 2013 the foreign anti-corruption legislation was significantly tightened. Foreign corruption now has a similar ranking to terrorism and human trafficking and can be prosecuted worldwide. The list of offences under which foreign companies can be prosecuted for corruption committed by their management or employees is long. The law can be applied where:
- the offence is committed in Austria (ie, the action or omission, or its effect, takes place in Austria);
- the perpetrator is an Austrian citizen;
- the offence is committed against an Austrian office bearer or adjudicator during or because of the execution of his or her duties; or
- the offence is committed to the benefit of an Austrian office bearer or adjudicator.
Whistleblowing and self-reporting
Are whistleblowers protected in your jurisdiction?
The Central Public Prosecutor’s Office for Combating Economic Crimes and Corruption implemented an effective system for individuals and corporations to notify the authority anonymously about a criminal suspicion. It provides a communication platform for whistleblowers via an online portal. To ease language barriers, there is even an English site available.
Reports can be submitted anonymously without being traced back. It is also possible for a whistleblower to communicate anonymously with the prosecutor’s office after the submission of the first report. This way, even whistleblowing perpetrators can initiate leniency programmes for their own benefit. Due to the very detailed specifics of the legal provisions, specialised know-how about executing such a plan is highly recommended.
It should be noted that in cases where whistleblowers fail to remain anonymous through choice or error, they risk suffering from the disclosure, since a major part of society still views whistleblowing negatively. For good reason, stakeholders still see a lot of room for improvement in protection of whistleblowers; availing oneself of the protections afforded to whistleblowers is highly recommended.
Is it common for leniency to be shown to organisations that self-report and/or cooperate with authorities? If so, what process must be followed?
The Criminal Procedure Code offers protection of principal witnesses. Section 209a stipulates leniency for perpetrators who remorsefully confess to the offence and disclose knowledge or evidence that:
- contributes to the clarification of the offence beyond their own level of participation; or
- helps to uncover a person participating in the offence.
The perpetrator must voluntarily contact the prosecution authorities to avail of these protections. This provision also expressly applies to corporations.
A specific leniency programme exists for violation of the Competition Law. While this programme has been used as a template for the introduction of leniency programmes into criminal law, the rules vary across different programmes. Any party seeking to benefit from an Austrian leniency system shoud seek advice from specially trained, qualified counsel.
Dispute resolution and risk management
Is it possible for anti-corruption cases to be settled before trial by means of plea bargaining or settlement agreements?
Plea bargaining and settlement agreements with the prosecution authority are foreign to the Austrian criminal law system. However, there are still methods for avoiding indictment.
For certain criminal offences, it is possible to achieve a diversion, resulting in a reduced punishment for the offending company before the case goes to trial – or even during trial – without the negative effects of a criminal conviction (including entry in the official criminal register). Alongside a reduced fine, certain duties may be imposed on the company – for example, the requirement to make a donation or to implement certain measures within the company, such as instituting a monitoring system. The basic prerequisites for a diversion are that the facts are sufficiently clear and there are no general or special preventive reasons for a conviction.
In the best case, cooperation with the prosecution authority and compliant behaviour can lead to a situation comparable to a non-prosecution agreement in other jurisdictions. Under certain circumstances (see Section 18 of the Act on Corporate Criminal Liability), the prosecution authority can terminate investigation proceedings without imposing any fines or other punishments on the company. In this case, the company will be treated as a ‘victim’ rather than as an accused party, and will share the prosecutor’s bench in the criminal trial against any persons indicted.
Are any types of payment procedure exempt from liability under the corruption regulations in your jurisdiction?
Some benefits granted to office bearers and adjudicators will not be considered undue if they are not connected to the unlawful execution or omission of an official duty. These specifically include:
- benefits that can lawfully be accepted or that are provided in the context of events in which there is an official or factual interest to participate;
- benefits for charitable causes, if the office bearer or adjudicator has no particular influence on their use; and
- local or customary courtesies of small value, unless the offence is committed in order to generate a steady flow of income.
These exemptions apply only if the benefit is offered or granted to induce behaviour that is in line with the officer’s duties. If the officer is being called on to violate his or her duties, the exemptions do not apply.
There is another exemption regarding the acceptance of benefits for the purpose of interference. There is no liability under this provision if only a minor benefit is offered, promised or granted – unless the offence is committed to generate a frequent flow of income. As a rule of thumb, a minor benefit is assumed to be one with a value of under €100; it is more likely to be considered minor if the benefit cannot easily be turned into money, such as in the case of flowers or dinner invitations.
What other defences are available and who can qualify?
Austrian law provides for diversion, which can prevent a formal criminal conviction.
What compliance procedures and policies can a company put in place to assist in the creation of safe harbours?
Austria has implemented the Austrian Compliance Standard ONR 192050 to allow companies to certify a compliance management system. The presence of a certified compliance management system (or a similar properly working compliance system of common best practices) will facilitate a company’s argument that the breach of a compliance rule was an individual act and not a systematic failure tolerated or facilitated by management. In this context, it should be mentioned that the “tone from the top” is an important feature for showing that a company is actually in line with common compliance standards. Austrian law provides no adequate procedures defence if a member of the top management (ie, a so-called ‘decision maker’) committed the illegal act. Only if normal employees (ie, without decision-making powers) act illegally will the implementation of a proper compliance system help to avoid criminal liability.
Record keeping and reporting
Record keeping and accounting
What legislation governs the requirements for record keeping and accounting in your jurisdiction?
The requirements for record keeping are governed by various laws, such as:
- the Companies Act;
- the Stock Corporation Act;
- the Act on Limited Companies;
- the Value Added Tax Act;
- the Act on Federal Real Estate Tax; and
- the Federal Fiscal Code.
What are the requirements for record keeping?
Accounts, annual reports and similar documents must generally be kept for seven years after the year of the act or liquidation of a company, or – in case of an ongoing proceeding – as long as they are relevant to the proceeding. Documents regarding real estate may need to be maintained for up to 22 years.
Destroying potential evidence is a criminal offence under Austrian law. Thus, if a suspicion of criminal action arises, immediate document preservation measures must be carried out to avoid criminal liability in breach of this specific criminal provision. Images of the current status of the relevant electronic data should be created and employees should be immediately instructed to refrain from deleting emails or destroying paper records.
What are the requirements for companies regarding disclosure of potential violations of anti-corruption regulations?
Besides anti-money laundering provisions, which are subject to a common standard within the European Union, there is no general legal duty for private companies to disclose potential violations of anti-corruption regulations. Self-reporting may be advisable in circumstances in which the company can take advantage of a leniency programme or diversion, or in order to gain ‘victim’ status in proceedings (ie, as an injured party) rather than facing the risk of a conviction.
What penalties are available to the courts for violations of corruption laws by individuals?
The penalties available to the courts range from fines and suspended sentences (ie, reprimands) to a maximum of 10 years’ imprisonment in the most severe cases.
The penalty (imprisonment or fine) for an intentional criminal offence committed by a government official who abuses an opportunity provided to him or her in his or her official capacity may be exceeded by 50%. However, the maximum term of imprisonment must not exceed 20 years.
For minor criminal offences punishable by less than five years’ imprisonment, there is also the possibility of a diversion, which is a settlement without a sentence. The basic prerequisites for a diversion are that the facts are sufficiently clear and there are no general or special preventive reasons for a conviction. Instead of a jail sentence, the prosecution authority or the court will order:
- a monetary fine;
- community service;
- probation; or
- compensation for harm done (including restitution).
Companies or organisations
What penalties are available to the courts for violations of corruption laws by companies or organisations?
Under the Act on Corporate Criminal Liability, corporations are subject to fines which are measured in per diem units, as well as to court directives (eg, to compensate for harm done, to implement a proper compliance system or to make charitable donations). The current maximum fine for violation of anti-corruption rules is €1.3 million.
If the relevant preconditions are met, diversion is also available for corporations. When deciding on diversion as an alternative to a conviction, the authority will consider, among other things:
- the behaviour of the company before and after the criminal act;
- the consequences of the illegal act and the compensation by the company; and
- the need to deter the company specifically and the public in general.