AUSTRIA Law and Practice Contributed by: Anna Zeitlinger, Gabriel Lansky, Philip Goeth and Konstantin Oppolzer, Lansky Ganzger Goeth + Partner Rechtsanwälte GmbH
may impose conditions on the release of frozen funds as it deems appropriate. Key grounds include: Basic Needs Frozen funds may be released to satisfy the basic needs of a sanctioned person (eg, daily basic needs, taxes, rent and insurance) or to pay for regular main - tenance works in relation to frozen assets. Moreover, frozen funds may be released to pay for reasonable professional fees or for the expenses incurred with the provision of legal services. Prior Contract Funds owned or controlled directly or indirectly by a sanctioned person may be released if the payment obligation stems from a contract concluded prior to the sanctioning of the concerned person. Divestments Frozen funds may also be released if they are nec - essary for a sanctioned person to sell his stake in an Austrian-legal entity. In such case the shares can be transferred, and the purchase price can be paid directly or indirectly to the sanctioned person. Moreover, should an Austrian entity wish to sell its business in Russia or Belarus, the EU entity requires a derogation from its competent authority if the Rus - sian or Belarusian subsidiary owns products subject to an EU (export) sanctions. This is because the sale of the shares is viewed as a “deemed export” of the products concerned. Note that these derogations in connection with a divestment are timely limited. Firewall Funds may be released to set up or certify a firewall. Such firewall can be adopted by an Austrian compa - ny which is associated with a sanctioned person and whose funds are, therefore, frozen. The firewall aims at severing the control by the sanctioned person over the Austrian company. If successfully implemented, the assets of the Austrian entity ought not be frozen and funds or economic resources can be made avail - able to such company. Under the applicable law, a national competent authority is not obliged to recognise a firewall by way of an order or resolution, but it is for the operators to recognise firewall measures and to decide whether
to “unfreeze” frozen assets. However, Austria, unlike other member states, is generally amenable to review firewall measures and to conclude whether these measures are appropriate. Austria even considers similar firewall decisions issued by other members states regarding the company concerned, thus, de facto recognising decisions of other member states and, consequently, safeguarding the uniform appli - cation of sanctions in the EU. This approach by the Austrian authority is somewhat unique in the EU. Our team has contributed to the development of the fire - wall practice in Austria and Austria’s approach ought to serve as an example for other member states. Export/Import of Sanctioned Products Under currently applicable EU sanctions, a plethora of products are subject to export or import restrictions. Under certain circumstances, however, the export or import may be approved by the competent author - ity. A derogation may be granted, for example, if the products at issue are for medical, pharmaceutical or for humanitarian purposes or if the import of certain products falls under a certain annual quota. Services Austrian operators are prohibited from providing sev - eral services to Russia or to Belarus (see 5.1 Ser- vices ). Under certain circumstances, the provision of these services may be granted by the competent authority. Most relevant is the “intra-group” deroga - tion, allowing an Austrian parent or group company to provide services to its Russian or Belarusian subsidi - ary, provided the services are for the exclusive use of such subsidiary, and provided the concerned group is owned or controlled by an entity incorporated in the EU or in certain “partner states” (UK, USA, Canada, Switzerland, Liechtenstein, Japan, South Korea, Nor - way, Iceland, Australia and New Zealand). Generally, sanctions restrictions are rarely absolute and almost every restriction allows for a form of der - ogation under certain circumstances. As opposed to derogations, legal exceptions to sanctions restrictions allow the operator to carry out an action without first obtaining a derogation. When relying on a legal excep - tion, the operator must usually notify the competent authority about the action (eg, an export of products to Russia).
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