AUSTRIA Law and Practice Contributed by: Anna Zeitlinger, Gabriel Lansky, Philip Goeth and Konstantin Oppolzer, Lansky Ganzger Goeth + Partner Rechtsanwälte GmbH
breach as was provided under the former Austrian Sanctions Act 2010. Notably, according to Austrian Sanctions Act some breaches, ie violation of the reporting obligations, can constitute an administrative offence, with significant financial penalties of up to EUR150,000. For serious, repeated or systematic violations, the fine may rise to up to EUR5 million or twice the economic value (gained benefit) stemming from the violation. 2.2.3 Civil Enforcement Action Austrian banks have blocked significant amounts of sanctioned individuals or companies allegedly associ - ated with such sanctioned individuals. Furthermore, courts have declared assets of companies allegedly controlled by sanctioned persons as “frozen”. How - ever, in one prominent case, the company concerned challenged the court’s decision and ultimately pre - vailed in the court of appeals; see the decision of the Higher Regional Court of Vienna of 19 September 2024, in case OLG 6R235/24h (Sibur). The court of appeals found that the evidentiary basis for the “freez - ing” of the assets was thin and unsubstantial. 2.2.4 Criminal Enforcement Action A few criminal investigations have been launched in connection with suspected sanctions violations, main - ly for the violation of the prohibition to export certain luxury goods or technology to Russia. Such cases are often settled with the court, whereby the perpetrator concedes to the violation in exchange for a small pen - alty, eg, monetary fine or probation. However, there have been no publicly known criminal convictions yet. 2.2.5 Mitigation If an operator can demonstrate that he either applied sanctions measures in “good faith” or if he failed to apply sanctions measures because he did not know and had no reason to believe that sanctions applied, the operator shall not be liable for his actions. To avail himself of these defences, the operator must have carried out reasonable compliance measures. For instance, if a bank decided not to block an account allegedly associated with a sanctioned person, the bank must demonstrate that it investigated the own - ership structure and other relevant factors before it decided to release the funds. The extent of the com -
pliance measures depends on the individual case. Hence, reasonable compliance measures may be a mitigating factor in order to lessen or even avoid pen - alties. The exact measures to be taken depend on the spe - cific case. For example, an in-depth analysis of the transaction at issue, a due-diligence review of the contractual partners involved, and receiving advice from a specialised law firm could support the argu - ment. Importantly, some of the above actions can demonstrate that a violation has not occurred inten - tionally but rather negligently. In principle, under Austrian criminal procedure, certain sanctions-related offences may be resolved through Diversion, a special form of settlement under Austrian criminal procedure. This is an alternative mechanism allowing criminal proceedings to be concluded with - out a formal criminal conviction. As a general rule, this option is available only for offences punishable by a maximum statutory term of imprisonment not exceed - ing five years. Whether Diversion is available depends on the circumstances of the individual case and the fulfilment of the statutory requirements. A key prereq - uisite is that the consequences of the offence, includ - ing any damage caused, have been fully remedied. 2.2.6 Strict Liability A criminal sanctions offence may be committed wilful - ly or negligently. Violations of financial sanctions (eg, asset freeze measures) must be committed wilfully, whereas violations against economic sanctions (eg, export prohibitions) may be committed negligently as well. EU sanctions regulations provide for certain dero - gations under which frozen funds may be released. These derogations apply directly in Austria as well. Depending on the subject matter of the derogation, the Financial Market Authority or the Federal Minis - try of Economy, Energy and Tourism are generally the competent national authorities. They decide whether the legal prerequisites for the respective derogations are fulfilled. However, the authority has discretion and 2.3 Licensing 2.3.1 Derogation
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