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Corruption does not impede business in Austria, but there is a small risk of corruption in public procurement. The Austrian Penal Code (in German) criminalises attempted corruption, active and passive bribery, bribery of foreign officials and politicians, extortion, fraud,embezzlement and money laundering. The government has generally implement anti-corruption laws effectively, but some high-level corruption cases have dragged on for many years. Facilitation payments are criminalised, and it is very uncommon for companies to make irregular payments or bribes in the country.
Last updated: December 2015
The judiciary is ranked as the second most trusted institution for reporting instances of corruption in Austria (European Commission, Feb. 2014). Businesses have a high-degree of confidence in the Austrian legal system, and the legal framework for settling disputes and for challenging government regulation is efficient (GCR 2015-2016). Austria is a member of the International Centre for Settlement of Investment Disputes (ICSID) and is a signatory to the New York Convention 1958, on the Recognition and Enforcement of Foreign Arbitral Awards.
Corruption is not a problem within the security services in Austria, and businesses express high confidence in the police to uphold the law (GCR 2015-2016). Government and civilian authorities carry out efficient control over the police, and effective mechanisms are maintained to investigate and address corruption (HRR 2014). Only a small percentage of Austrian households believe corruption within the police is widespread (European Commission, Feb. 2014).
Corruption in the public services sector is not an obstacle for businesses in Austria. Companies perceive the burden of government regulations and inefficient bureaucracy as a competitive disadvantage for the country (GCR 2015-2016), and investors often complain of red tape (ICS 2015). More than one-third of businesses perceive nepotism and cronyism to be widespread within the public administration, and that bribery and the use of connections are often the easiest way to obtain certain public services (European Commission, Feb. 2014). Over one-third of respondents believe that abuse of office and bribery are widespread among officials issuing business permits (European Commission, Feb. 2014).
The government of Austria employs a preventive approach towards the issue of corruption in the public administration. The government has recently initiated reform projects that include the establishment of one-stop-shops and e-government to minimise encounters between public officials and citizens/companies, and thus decreasing the risks of corruption. A code of conduct has been provided for all levels of public administration (EUACR 2014).
Property rights are protected by Austrian law and are effectively upheld by the judiciary (ICS 2015). Businesses must register with the electronic land registry for any real estate agreement to enter into effect (ICS 2015). Registering property in Austria is less time-consuming compared to the OECD average (DB 2015).
Corruption is not a problem in Austria's tax administration. Austria has established an attractive corporate tax model with a relatively low corporate tax rate. Corruption payments, including bribery, are not tax deductible for companies (ICS 2015). Businesses rank tax rates as the most problematic factors for doing business (GCR 2015-2016).
The border administration in Austria is transparent, with a very low risk of corruption in the sector. Austria performs well regarding the effectiveness of customs procedures (GCR 2015–2016). Businesses report that the occurrences of irregular payments in export and imports are very rare (GETR 2014).
Investors operating in Austria may contend with some corruption risks in the public procurement sector. Businesses indicate that the process of awarding public contracts can be tainted by government officials tending to favour well-connected companies and individuals (GCR 2015-2016). The most cited risk of corruption in public procurement is the evaluation criteria being tailor-made for certain participants (EUACR 2014). Companies believe that close links between politicians and businessmen has led to corruption (European Commission, Feb. 2014), and almost half of surveyed citizens believe that bribery and abuse of power are widespread among procurement officials (European Commission, Feb. 2014). Public procurement tenders in the defence and security sector are published to the public but are not easy to access (GDACI 2012). A shortage of transparency within defence procurement is identified through the lack of disclosure on purchases and of a systematic procurement strategy, and procurement agents and subcontractors are found to be insufficiently controlled (CESifo Dice, 2013).
The Austrian Penal Code (in German) criminalises attempted corruption, active and passive bribery, bribery of foreign officials, extortion, fraud, embezzlement and money laundering. Giving and accepting gifts is also regulated by the legislation. Anti-corruption laws encompass all public officials, members of parliament, and employees and representatives of state-owned companies (ICS 2015). Corruption committed abroad is punishable in Austria, and it is illegal to offer, promise or grant an advantage, such as building close relationships with public officials (also referred to as the crime of Anfüttern) (EUACR 2014). An anti-money laundering system criminalises money laundering. The Federal Bureau of Anti-Corruption (BAK) has jurisdiction of corruption investigations taking place within and outside the country. Disclosure laws are effectively enforced and complied with (HRR 2014). Lobbying is regulated by the Lobbying Act, and political donations exceeding EUR 3,500 must be reported (ICS 2015). The law provides access to government information, and these laws are respected in practice (HRR 2014).
Austria is party to the UN Convention against Corruption, the Civil Law Convention on Corruption, the Criminal Law Convention on Corruption and the OECD Anti-Bribery Convention. Austria's Penal Code is in-line with the OECD Anti-Bribery Convention, and jurisdiction extends to all offences committed by Austrians regardless of where the bribe was offered, promised or paid (EUACR 2014). Access the Lexadin World Law Guide for a collection of legislation in Austria.
Freedoms of speech and press are guaranteed in Austria and respected in practice (HRR 2014). Public officials have made use of libel and defamation laws to file suits against journalists (FotP 2014). Media ownership is concentrated, thereby suffocating the diversity of reporting (FitW 2014). The government can be criticised without interference from authorities (HRR 2014), and corruption cases are frequently brought to light by the media (ICS 2015). Austria's media environment is considered 'free' (FotP 2014).
The Austrian Constitution and certain laws protect freedoms of assembly and association, and these rights are respected in practice (HRR 2014). NGOs are well developed and function as a reliable partner in policymaking (FitW 2014).
- World Bank & IFC: Doing Business 2015.
- World Economic Forum: Global Competitiveness Report 2015-2016.
- US Department of State: Investment Climate Statement – Austria 2015.
- European Commission: The Special Eurobarometer, February 2014.
- US Department of State: Human Rights Report – Austria 2014.
- World Economic Forum: The Global Enabling Trade Report 2014.
- European Commission: Anti-Corruption Report 2014 - Austria.
- Freedom House: Freedom of the Press – Austria 2014.
- Freedom House: Freedom in the World – Austria 2014.
- The Local: 'Ex-finance minister expected to be sued', 9 July 2014.
- PwC: Identifying and Reducing Corruption in Public Procurement in the EU 2013.
- CESifo Dice: Government Defence Anti-Corruption Index Summary, 2013.
- Reuters: ‘Austria corruption crackdown spreading its net wide’, 14 June 2013.
- World Bank Group: Global Investment Promotion Benchmarking 2012.
- Transparency International: Bribery Payers Survey 2012.
- European Commission: Eurobarometer 2012.
- Transparency International: Government Defence Anti-Corruption Index 2012.
- Spiegel: ‘Corruption Scandal: Investigation into Dubious EADS Austria Deal Intensifies’, 12 November 2012.
- OECD: Phase 3 Report on Implementing the OECD Anti-Bribery Convention in Austria 2012.
- Schoenherr: 'Austria: New Anti-Corruption law per 1 January 2013', 25 October 2012.
- Austrian Times: ‘Grasser rejects BUWOG corruption claims’, 18 April 2012.
- Spiegel Magazine: ‘Corruption Scandals in Austria: A Web of Sleaze in Elegant Vienna’, 13 October 2011.