AUSTRIA Trends and Developments Contributed by: Martin Schiefer and Christian Richter-Schöller, Schiefer Rechtsanwälte GmbH
In sanctions law, the Sanctions Act 2024 (SanktG 2024) has been in force since February 2025, and on 1 Janu - ary 2026, supervision of financial sanctions compli - ance moved from the Oesterreichische Nationalbank to the Financial Market Authority (FMA), with a wider supervised population, including insurers, investment firms and crypto-asset service providers, and sharp - er on-site inspection powers. At EU level, Directive (EU) 2024/1226 harmonises the criminal enforcement of sanctions violations and circumvention. Defence exporters should expect a stricter prosecution prac - tice, particularly around third-country circumvention, no-re-export clauses and end-user diligence. The direction of travel is clear: integrated due diligence that combines sanctions screening, export control classification and procurement-exclusion checks in one process is becoming the standard expectation rather than best practice. In export control, licence volumes have grown with the order books, and with them the operational load on classification, end-user documentation and intangible technology transfer controls. Austrian particularities remain relevant: war material requires licences from the Ministry of the Interior in agreement with the for - eign affairs and defence ministries, and the statutory prohibition on deliveries into areas of armed conflict, rooted in neutrality, continues to shape what Austrian- based production can and cannot supply. Companies expanding production for European demand should factor licensing timelines and these substantive limits into their delivery commitments from the outset. In investment control, the 10% voting-rights thresh - old for defence-related targets under the Investment Control Act means that even minority investments by non-EU/EEA/Swiss acquirers are notifiable, and con - ditional clearances with commitments on information protection, capability retention and supply continuity have become the typical outcome in sensitive cas - es. Anyone structuring investments into the Austrian defence supply chain should treat the screening pro - cedure as a standard workstream, not an exception. In cybersecurity, Austria finally implemented NIS-2: the Network and Information System Security Act 2026 (NISG 2026, Federal Law Gazette I No 94/2025) enters into force on 1 October 2026. In-scope entities
must register with the new Federal Office for Cyber - security by 31 December 2026, implement binding risk management measures, train their management, and report significant incidents within 24 hours (early warning) and 72 hours (incident notification), with fines of up to EUR10 million or 2% of worldwide turnover and personal accountability of management. Defence suppliers are affected directly where they fall within the 18 regulated sectors and indirectly through supply chain security clauses that in-scope customers must now impose on them. Combined with the security- of-supply and information-security requirements of defence tenders, cybersecurity has become a pre - condition of market access. Transparency has also changed character. The Free - dom of Information Act, in force since 1 September 2025, replaced the constitutional principle of official secrecy with a right of access to information. Defence and national security exceptions apply, and classified material remains protected, but contractors should expect more information requests, more media atten - tion on procurement decisions and a sharper public debate about direct awards. Documentation quality, always advisable, is now a reputational necessity. Transparency, Audit and the Politics of Procurement Defence procurement in Austria has always carried political weight; the Eurofighter programme occu - pied committees of inquiry for the better part of two decades and still shapes institutional memory on all sides. The current build-up is taking place under clos - er scrutiny than any previous one. The Court of Audit examines major programmes as a matter of course, parliamentary committees follow the large platform decisions, and the Freedom of Information Act has added a general access right where previously official secrecy was the default. For contracting authorities, the operative conse - quence is documentation discipline: the choice of procedure, the use of exemptions, the evaluation and the price justification must be written down as if they will be read by an auditor and a journalist, because they may well be. For companies, the consequence is reputational risk management: a lawful award can still become a public controversy, and suppliers should
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