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The FCPA Versus Austrian Criminal Law: Is the Anti-Corruption Regime in the US Equal to the Anti-Corruption Regime in Austria?

The FCPA Versus Austrian Criminal Law: Is the Anti-Corruption Regime in the US Equal to the Anti-Corruption Regime in Austria?

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The US Foreign Corrupt Practices Act (FCPA) was introduced to fight corruption on an international level. Corporations of all nationalities which are established under US law or traded on a US stock market are embraced by this act, as are all individuals who commit relevant acts on the territory of the US.

In contrast, the Austrian Criminal Code (the Strafgesetzbuch, or StGB) merely covers offenses of individuals committed on Austrian territory. Corporations, on the other hand, are covered by the Austrian Code of Criminal Liability (the Verbandsverantwortlichkeitsgesetz, or VbVG).

Differences in Target

In general, the FCPA focuses on active bribery, and it therefore penalizes the party trying to gain an advantage by offering benefits to officials. The Austrian law, by contrast, also sanctions passive acts, and therefore penalizes those who accept such benefits as well.

There are also differences regarding the responsibility for actions of employees. While corporations subject to the FCPA are held responsible not only for the acts of their own employees, but also for those committed by employees of subsidiaries, joint ventures, and contractual partners (to the extent the corporations were aware of the violations), a company subject to Austrian law is only liable for acts of its own staff – and not for the actions of employees of an affiliated enterprise.

Differences in Impact

Difference in the regulation of facilitation payments made to facilitate an official act could have enormous impact: The StGB penalizes the payment of public officials made with the purpose of accelerating their work, even if the official’s actions are in fact lawful. By contrast, the FCPA allows for bribery if the aim of the paid-for action of the official was to speed up the release of certain documents like licenses or custom clearances. 

This distinction could be critical if, for instance, two enterprises – one subject to the FCPA and the other subject to Austrian criminal law – both try to get an advantage by bribing an official. The former would benefit from the time-saving act (assuming all other requirements of the FCPA’s exceptions are met), while the latter would suffer from legal consequences. 

Differences in Penalty Degrees

Sanctions under the Austrian law seem to be more lenient than those set out in the FCPA. Under the latter, each anti-bribery violation incurs a fine of up to USD 2 million for enterprises or other business entities, while individuals such as stockholders face a penalty of up to USD 100,000 or a maximum of five years in prison. In addition, sanctions twice as high as the monetary benefits the offender achieved with the violations can be imposed. The StGB, on the other hand, calls for penalties only up to EUR 1.3 million for legal entities and a maximum of ten years in prison for individuals – but only if the fraudulent monetary benefit equals or exceeds EUR 50,000.

Furthermore, the Austrian law allows for a sentence to be reversed if the offender meets certain requirements. For instance, the scope of liability of a legal entity depends on the measures it has taken to ensure compliance with anti-corruption regulations, and the enterprise can only be punished if it failed to act with necessary diligence and thus facilitated the commitment of crime for its employees. In addition, under the StGB, offenders can prevent fines by active repentance, meaning that impunity can be acquired by preventing the achievement of the offender’s former goal and by stopping the bribed public official from executing the desired task. In the FCPA, by contrast, preventive measures do not lead to immunity, but they can mitigate the punishment. 

Baiting: An Austrian Particularity

The Austrian Criminal Law contains only one singularity: Baiting – i.e., the granting of benefits to influence the beneficiary. This offense differs from the afore-mentioned criminal acts in that the granting of benefits does not have to be accompanied by a certain requested action of the public official, but only takes the form of advantages provided over a period of time in order to make sure that the official is well-disposed in the case of a future request. The FCPA and other international anti-corruption acts do not criminalize this situation. 

It is worth noting that the STGB and the VbVG were introduced to sanction illegal behavior in Austria, while the FCPA focuses on crimes beyond the borders of the US. Furthermore, the StGB was introduced as a codification of the general domestic criminal law, while the FCPA has the advantage of concentrating merely on white collar crimes. Therefore a comparison between the Acts has to remain incomplete.

By Martin Eckel, Partner, Taylor Wessing

This Article was originally published in Issue 4.9 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

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