AUSTRIA Law and Practice Contributed by: Martin Schiefer and Christian Richter-Schöller, Schiefer Rechtsanwälte GmbH
7. Investigations and Litigation in the Defence Sector 7.1 Principal Investigative Authorities On the criminal side, the public prosecutors direct investigations executed by the criminal police; the Economic Crime and Corruption Prosecutor’s Office handles corruption and major economic cases, includ - ing procurement-related bribery and serious export control or sanctions matters; the Directorate for State Protection and Intelligence covers state-protection aspects; and the Austrian Customs Office enforces customs and export control law. On the administrative side, the Federal Ministry for Economy supervises compliance with the Foreign Trade Act 2011, the Financial Market Authority has supervised financial sanctions compliance since 2026, and the Federal Competition Authority inves - tigates bid rigging. The Court of Audit examines the economy and regularity of defence procurement; it has no enforcement powers but high practical impact, and parliamentary committees of inquiry have repeat - edly examined defence procurement. Investigative powers derive from the Code of Criminal Procedure and the respective administrative statutes. 7.2 Triggers for Investigation Typical triggers for regulatory investigation are audit findings of the Court of Audit, customs findings at export, whistle-blower reports through internal chan - nels or to the Federal Bureau of Anti-Corruption, sus - picious-transaction and freezing reports from financial institutions, referrals between authorities, media and parliamentary scrutiny, and information from foreign partner authorities. As to mandatory reporting: public officials must report suspected criminal offences arising within their sphere of competence; freezing measures must be reported under sanctions law; and, from October 2026, sig - nificant cyber incidents must be reported under the Network and Information System Security Act 2026. Companies have no general duty of criminal self-dis - closure; export licence holders must, however, report certain irregularities and changed circumstances to the licensing authority.
7.3 Investigative Powers and Procedures Under the Code of Criminal Procedure, prosecutors can order the production of documents and data, seizure, the questioning of suspects and witnesses, the disclosure of account information and, for seri - ous offences, covert surveillance measures; searches require court authorisation. Administrative authorities hold information and inspection rights: the Federal Ministry for Economy can audit export licence hold - ers, and the Financial Market Authority can conduct on-site inspections. For classified material, protections operate through restricted file access, the exclusion of the public from hearings and the Information Security Act framework; investigating authorities requiring access to classified information co-ordinate with the originating author - ity. Cross-border defence cases add the complexity of mutual legal assistance and of evidence located abroad. 7.4 Dawn Raids and Unannounced Inspections Searches of business premises require a prosecu - tor’s application and court approval and are executed by the criminal police, frequently unannounced; the Financial Market Authority and the Federal Competi - tion Authority also conduct on-site measures within their remits. The rights of the entity under investigation include service of the search order; the presence of a repre - sentative and the right to call counsel, although the search need not await counsel’s arrival; and an objec - tion procedure for materials claimed to be privileged, which are then sealed and reviewed by the court. The entity must tolerate the search and must not destroy evidence or obstruct the measure; co-operation beyond toleration is voluntary. The preparation of a dawn raid protocol is a standard compliance measure for defence contractors. 7.5 Legal Professional Privilege and Confidentiality Communications with external Austrian attorneys are protected through the attorney’s right to professional secrecy and the corresponding right to refuse testi - mony, which extends to documents in the attorney’s
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