AUSTRIA Law and Practice Contributed by: Martin Schiefer and Christian Richter-Schöller, Schiefer Rechtsanwälte GmbH
4. Compliance, Sanctions and Embargoes 4.1 Sanctions Legislation and Regulatory Framework EU sanctions regulations adopted under Article 215 TFEU apply directly in Austria. The Sanctions Act 2024, in force since February 2025, is the national framework statute: it enables the rapid implementa - tion of UN listings, allocates competences and con - tains penal provisions; and it applies subsidiarily to the Foreign Trade Act 2011, the War Material Act and the Safeguards Act. Competences are divided: the Financial Market Authority has supervised compliance by financial market participants since 1 January 2026, having taken over from the Oesterreichische Nationalbank; the Federal Ministry for Economy handles trade- related measures within the Foreign Trade Act 2011 framework; the Federal Ministry of Finance publishes national implementing acts; the Federal Ministry of the Interior supports enforcement; and the Federal Minister of Justice grants derogations for the award and continued performance of public contracts. Third- country measures such as US OFAC sanctions have no legal effect in Austria; Regulation (EC) No 2271/96 (the “EU Blocking Statute”) applies. 4.2 Arms Embargoes Austria implements all UN Security Council arms embargoes as well as autonomous EU embargoes. They operate through directly applicable EU regula - tions and through mandatory licence refusals under the War Material Act and the Foreign Trade Act 2011. Prohibited activities typically include the supply of arms and related materiel, related technical assis - tance, brokering and financing to embargoed destina - tions or entities. The Russia regime additionally bans a wide range of dual-use and advanced-technology exports. Exceptions exist for each regime, typically for humani - tarian purposes or protective equipment for personnel of international organisations and media, and require authorisation. Independently of any embargo, the War Material Act bars war material exports into areas of
armed conflict, an Austrian particularity rooted in neu - trality. 4.3 Screening and Due Diligence Requirements There is no express statutory screening duty for non- financial companies. However, the prohibitions on making funds or economic resources available to listed persons make counterparty screening a practi - cal necessity, and its absence will be treated as neg - ligence in enforcement. Financial market participants must maintain sanctions-related policies, controls and procedures, supervised by the Financial Market Authority, which applies the EBA guidelines on restric - tive measures. Ownership and control are assessed in line with the EU Best Practices: a 50% ownership presumption, control indicators and aggregation of the holdings of several listed persons. Defence sector participants must additionally check their subcontractor chains, notably against the prohibition in Article 5k of Council Regulation (EU) No 833/2014 on Russian subcontrac - tors above 10% of contract value in public procure - ment. 4.4 Licences, Derogations and Exceptions Each EU regime provides derogation grounds – for example, basic needs, legal fees, prior contracts and humanitarian activities. Austrian competence is split: the Financial Market Authority authorises the release of frozen funds held by financial market participants and related transactions; the Federal Ministry for Economy grants trade derogations within the Foreign Trade Act 2011 framework; and the Federal Minister of Justice authorises the award and the continued performance of public contracts and concessions affected by sanctions. Residual competences follow the Sanctions Act 2024. Applications must evidence the derogation ground precisely and document the payment and delivery flows. Processing times vary considerably by regime and complexity, and no part of the transaction may be implemented before the authorisation has been granted.
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