As of 1 January 2006, stock companies, limited liability companies and other forms of companies, may be penalized for criminal acts committed by their employees or decision-makers based on the Act on Corporate Criminal Liability ("Verbandsverantwortlichkeitsgesetz, VbVG").
Recently, the constitutional order of the VbVG was reviewed by the Austrian Constitutional Court (VfGH). In its decision, the VfGH came to the conclusion that constitutional rights are not infringed by the VbVG.
The VfGH argued that the Austrian legislature, in accordance with international requirements, had to provide "effective, adequate and discouraging sanctions" against accountable companies to prevent criminal acts. Thus, a new category within the criminal law was established, which drops the principle of liability. Of course, such provisions which allow for third-partyliability have to comply with the requirement of objectivity.
Thus, a company may not be penalized for actions which are outside of its sphere of interests or influence. In cases where the connection of a company's sphere of interests or influence is in adequate correlation with the conduct of an employee or decision maker, it is possible to constitute the liability of a company, if such conduct is considered a criminal act and was committed unlawfully and culpably. According to the decision of the VfGH, this is the case with regard to the VbVG because a company only becomes liable when the criminal act was committed for its benefit or due to a breach of the company's duties. Furthermore, a decision- maker has to commit the criminal act alone or the commission of a criminal act by an employee was enabled by the company's negligence.
Also from the angle of creditor protection, the repeal of the VbVG by the VfGH would have been considered as a step back in combating corruption in Austria. For some other reasons, the repeal of the VbVG would have caused major problems because beyond criminal law, the punishment of companies has been common for a long time. The best example of this is the Antitrust Law. As of August 2016, it is possible under Antitrust Law for the Financial Market Authority to impose a fine of 15% of the annual turnover in cases of market abuse. In accordance with European Union law, such regulations may not be contested by Austrian Constitutional Law. All other cases may be considered unconstitutional. The VfGH avoided such a dilemma with its recent decision.
By all accounts, the VfGH may have the opportunity to take a stand whether the imposition of such fines have to be reserved to courts in the near future.