The success of a new leniency regime, as provided for in the Austrian Criminal Code as of 1 January 2011, will depend on whether it gives the whistleblower sufficient incentives to present themselves to the public prosecutor, and whether the regulation offers a high level of predictability for those involved in the case. A number of objections have been raised against the draft version.
Whether it is a spillover from the global economic crisis that the judiciary has to deal with increasingly complex white collar cases, or that the criminal landscape has recently changed, is ultimately irrelevant. The fact is, the legislature wishes to prepare itself to deal with white collar cases and increase efficiency. By means of the proposed leniency regime from January 2011, the legislature is pursuing the goal of exposing complex cor-ruption and white collar crimes.
Cooperating with criminals
Opponents of the leniency regime argue that it would be contrary to the rule of law and, above all, to the common sense of justice if the state were to make a pact with criminals, thereby sparing them their deserved penalty as a reward for their turning leniency. Reaching an agreement with lawbreakers aimed at exempting them from punishment if they assist in solving crimes is deemed questionable as regards the rule of law. However, the risk that those who turn leniency will not testify truthfully, or that the legal institution of the leniency regime could be abused, is limited. This is because whistleblowers would completely forfeit their immunity and, in the event of giving false evidence, be subject to subsequent prosecution.
A successful investigative instrument
From experience gained in the field of antitrust law, however, the leniency regime has proven a successful investigative instrument that has led to the exposure of major cartel cases in Austria in recent years. The anticipated leniency regime in cartel proceedings is widely welcomed by anti-trust lawyers. This is because, the leniency regime in anti-trust cases provides for leniency for undertakings only, not for implicated employees, who may face criminal sanctions for their involvement in, eg, bid-rigging (which is caught by both the cartel prohibition and the criminal code).
The practical experience made in antitrust proceedings raises hopes that the leniency regulation will also be a promising instrument in corruption offences, breaking up the in-terest groups of offenders and prising them open from the inside. Whistleblowers that break their silence disrupt the secrecy and mutual dependence inherent in corruption cases. Thanks to this major leniency regime, no one can be sure any more that the others involved in a corruption case will not opt for exemption from punishment by turning to the authorities. The foundation of criminal conspiracies and secret agreements would thus be significantly weakened. Companies, too, would be exposed to considerable pressure if their employees or decision-makers were promised immunity in exchange for disclosing criminal actions to the detriment of their employer.
With respect to the efficient and successful application of this major leniency regime, the new law is linked to adequate incentives. Immunity has already proved itself an effective incentive in antitrust law, which can stave off the feared fines for the company. For the accomplice, this major leniency regulation could well be a "golden bridge" by which to leave crime behind and cooperate with investigators. The effectiveness of the regulation will depend on the predictability and safety of the proceedings when it comes to the state witness. The regulation is unlikely to gain importance in practical terms if the incentive for the whistleblower is not strong enough or if they may face personal risk.
The leniency regime
Section 209a of the Austrian Code of Criminal Procedure in the present draft of the federal law on the "criminal competence package" contains proposals regarding the introduction of a leniency regime. The proposed section should come into effect on 1 January 2011 and would be limited to six years. The leniency regime will apply to all serious offences resulting in a sentence of more than five years in prison. It also applies to assisting in the investigation of persons who hold a leading position in a criminal association or a criminal terrorist organisation.
This ambitious proposal is, however, undermined by the present arrangement of the act. Contrary to all expectations, the whistleblower does not go unpunished, but can expect to pay a fine. It is still unclear how much this may be in individual cases. The public prosecutor must proceed as follows: the whistleblower is offered a fine and a provisional suspension of the criminal proceedings is declared. The proceedings are then dropped if the whistleblower pays the fine.
A number of objections have been raised in respect of the draft. One is the lack of a legal right to invoke application of the leniency regulation. Furthermore, it carries a risk of the proceedings being taken up again after their suspension. A whistleblower might be "digging his own grave", impeding a willingness to cooperate. The whistleblower's defence counsel might therefore be reluctant to recommend exposure to the leniency regime.
Currently, there are considerable uncertainties hindering potential state witnesses from testifying before the public prosecutor. The inevitable consequence would be that the employees of potential state witness companies would refuse to cooperate with the Austrian Federal Competition Authority. This would also impair the efficiency of the antitrust law leniency regime. If the leniency regime is to achieve the desired success, the legisla-ture will have no other option but to remove the described obstacles and clarify the ma-terial and procedural questions raised.
This article was originally published in the schoenherr roadmap`11 - if you would like to receive a complimentary copy of this publication, please visit: www.schoenherr.eu/roadmap