International Business Crime & Fraud – Austria – Thomas Voppichler

KNOETZL is a leading dispute resolution law firm in Austria dedicated to high-profile, important and complex cases. The firm’s diverse expertise encompasses business crime matters, as well as civil, commercial, corporate and fraud litigation, alongside international commercial arbitration, investment protection, mediation and ADR. KNOETZL is widely recognised for its well-established disputes work at the intersection of civil and criminal law.

KNOETZL’s White-Collar Crime Department focuses on complex business crime matters, including defending international corporations, executives and high-net-worth individuals against accusations of fraud, embezzlement, corruption, sanctions violation and insolvency-related offences. Our firm also specialises in handling cases on behalf of defrauded clients by creatively pursuing their claims through criminal proceedings and parallel civil litigation. Moreover, KNOETZL has notable expertise in cases involving asset tracing, internal and external investigations, unfair competition, corporate crisis management and compliance. Our business crimes practice often derives from banking & finance, corporate and commercial matters, as well as from foreign investment and funds transfer wellsprings. Key industries subject to criminal charges and investigations – and represented by KNOETZL – are widespread, and have included financial services, large food retail, international arms manufacturers, automotive, accountancy, energy, national and regional defence, industrial, gaming, manufacturing, IT & telecoms, life sciences, healthcare, pharmaceuticals, data protection, social media and public service.

KNOETZL works seamlessly and complementarily, with international partner law firms and industry experts from every continent. The success of our regular work with international clients and international law firms is reflected in the continuing appointment of our firm as Austrian co-counsel by top-tier global law firms. The recurring global aspect, and the particularly extreme complexity of our cases in the core area of white-collar crime law, is one factor that sets our practice apart in the Austrian market.

Our firm’s White-Collar Crime team is continuously involved in numerous national and international fraud cases, typically including aspects of (international) asset tracing and recovery.

Another focus of our practice concerns criminal defence work for companies. As Austrian law provides for the criminal liability of companies, we are regularly retained by such companies as defence counsel in criminal investigations. These investigations are often based on allegations against a company, claiming undue profit as a result of criminal conduct by its directors or employees.

Due to the current economically challenging times and rapidly rising numbers of insolvencies in various business sectors, the Austrian prosecution authorities have increased their focus on investigations in this area, covering such potential offences as fraudulent reduction of assets and grossly negligent impairment of creditor interests. Accordingly, our role extends to legal advice and representation of (distressed) companies and their executives, as well as (harmed) creditors.

Meanwhile, we are deeply involved in advising on sanction-related issues, including defence against alleged sanction violations and legal actions against asset freezes.

The public prosecutor’s office and the police have been strengthened in terms of personnel, and continue to be highly active in conducting investigations into white-collar offences. The public prosecutor’s offices, as well as the Federal Competition Authority – which is responsible for antitrust proceedings – have a more potent arsenal of financial and personnel resources than in the past. They gather their expertise in investigative teams, and when it comes to business crime, they have access to specially trained experts who support their efforts, with, for example, accounting and other technical expertise.

In recent years, the prosecution authorities have launched numerous investigations into accusations of corruption in the public sector. In addition, cartel violations are being vigorously prosecuted, as evidenced by the nation-wide construction cartel prosecution, which includes 222 accused parties to date – virtually every player in this industry. In 2023, the criminal law on corruption was tightened by introducing new offences and increasing impending penalties. Interestingly, Austrian criminal prosecution authorities have stepped up enforcement of EU sanctions violations, particularly for financial and economic sanctions imposed against Russia.

While it is very difficult to choose just one issue to be reformed, we would like to see the implementation of potential agreements with the prosecution authorities, similar to deferred prosecution agreements, non-prosecution agreements and plea agreements, which are not provided for under Austrian Criminal Law currently. We are of the opinion that the implementation of such legal measures would spur self-reporting and thorough internal investigations into potential misconduct. Besides, it should significantly speed up criminal investigation proceedings – a major issue in Austria.

Digitalisation has significantly boosted the conduct of investigations, as there are now more sources that can be assessed for the purposes of an investigation (e.g. chat messages). Digitalisation (and AI) have also substantially advanced the legal tech industry, which now offers a wide range of services that optimise, and certainly speed up, the conduct of investigations.

As we at KNOETZL routinely advise many foreign clients and handle a plethora of cases with international legal aspects, we have built up a broad global network of law firms. This regular cross-border cooperation enables us to ensure a well-informed advisory scope for our clients based in other jurisdictions, as well as for national clients who have operations overseas.