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Austria - Corruption

The term "corruption" includes bribery and illicit intervention, abuse of office, and accepting an advantage. The law provides criminal penalties for official corruption, and the government generally implemented these laws effectively. There were isolated reports of government corruption during the year.

There are a number of high-profile corruption cases currently under investigation, on trial, or on appeal; legal proceedings in such cases are slow (sometimes taking five years or longer) and so far there have been no convictions in a cross-border bribery case. Large and exchange-listed companies in Austria generally have codes of conduct, but these are not a requirement. Watchdog groups such as Transparency International are active, but play no formal role.

Corruption in the private sector was not considered a major problem in the country; however, the ongoing scandals involving the Hypo Alpe Adria banking group and Meinl European Land (MEL) raised the profile of private sector corruption during the year. Another ongoing, high-profile corruption case involved the government's $1.1 billion privatization of 60,000 state-owned apartments in 2004 (the so-called "BUWOG affair"). The Prosecutor's Office continued its investigation into the matter but did not make any indictments during the year. During the year 2010 prosecutors and the federal auditor's office were still investigating the failed expansion of the Vienna airport terminal that, due to cost overruns, triggered a controversy regarding political influence in the appointment of the managers and consultants handling the project. The investigation of the federal auditor's office focused on allegations of embezzlement and related statutory offenses by the board of Airport Vienna in connection with contracts for construction companies and consultants. Austria has ratified the United Nations Convention against Corruption (UNCAC), the OECD Anti-Bribery Convention, the Council of Europe's Civil Law Convention on Corruption, and has signed -- but not yet ratified -- the Criminal Law Convention on Corruption. Austria is also a member of the Group of States against Corruption (GRECO) within the Council of Europe. Transparency International's (TI) 2010 Corruption Perceptions Index ranked Austria 15th for absence of corruption. OECD experts have criticized Austria's anti-bribery legislation and practices as not fully in line with the Anti-Bribery Convention; TI's 2010 Progress Report on Enforcement of the OECD Anti-Bribery Convention characterizes Austria as one of 20 OECD countries with "little or no enforcement" against international bribery.

In August 2010, the head of an OECD working group on corporate corruption, Mark Pieth, criticized the country for inadequate enforcement of its anticorruption laws. Although the country has strengthened its criminal code in recent years and established an anticorruption prosecutor, a number of weaknesses remain, including too little independence for prosecutors, poor whistleblower protection, and prosecutions that are few and slow.

Corruption provisions in Austria's Criminal Code cover managers of Austrian public enterprises, civil servants and other officials (those with functions in legislation, administration, or justice on behalf of Austria, in a foreign country, or an international organization), and representatives of public companies. The term "corruption" includes: active and passive bribery; illicit intervention; abuse of office; and accepting consideration. It can sometimes include a private manager's fraud, embezzlement, breach of trust, or accepting consideration.

Criminal penalties for corruption include imprisonment of up to 10 years for all parties involved. By law, such payments are not tax deductible for companies making them. A separate law, the Law on Responsibility of Associations, deals with criminal responsibility for legal entities and partnerships. The law covers all criminal offenses, including corruption, money laundering, and serious tax offenses that are subject to the Tax Offences Act. Fines pursuant to this law can rise to as much as EUR 1.8 million ($2.4 million). Austria has a special public prosecutor's office with Austrian-wide authority for corruption cases.