1. What is corruption—what are the different types?
Corruption is the abuse of power, a role or a position for personal gain. The Austrian Criminal Code distinguishes between corruption offenses in the public and private sector.
The most serious offenses in the public sector include bribery (Section 304 of the Austrian Criminal Code (StGB)), offering a bribe (Section 307 StGB), accepting a benefit (Section 305 StGB), granting a benefit (Section 307a StGB) and so-called “baiting” (Sections 306 or 307b StGB). These offenses must always involve a public official (or arbitrator). The individual criminal offenses refer in each case either to the public official or to the counterpart as the active perpetrator. In addition, in the private sector, the acceptance of gifts and the bribery of employees or agents (Section 309 StGB) are also punishable offenses.
2. Who is a public official? – and why the definition matters
Austrian corruption law is primarily based on the concept of a “public official.” As a result, Austrian criminal provisions have long extended far beyond “traditional” civil servants or politicians. Employees of state-affiliated companies, public contracting authorities or individuals performing public functions may also be considered public officials.
Pursuant to Section 74 (1) (4a) (b) and (c) StGB, public officials are persons who, on behalf of a local authority (the federal government, states or municipalities), for another public-law entity (with the exception of a church or religious community), for another state or for an international organization, perform legislative, administrative or judicial functions as an organ or employee thereof, or are authorized to perform official duties in the enforcement of laws.
According to Section 74 (1) (4a) (d), however, the term also applies to persons who serve as officers or employees of a company in which domestic or foreign local authorities hold at least a 50% stake, or which is operated or effectively controlled by such authorities or which is audited by the Court of Auditors.
This distinction is particularly crucial in the context of public tenders or contract awards. Many companies — or their employees — are unaware that even a contact person at a state-affiliated company may be classified as a public official.
3. What constitutes an (improper) benefit?
A common misconception in practice is that corruption can only occur in connection with large sums of money or obvious “bribes.” In fact, Austrian corruption law interprets the concept of “benefit” very broadly.
Generally speaking, any benefit for which there is no legally established entitlement and which improves the recipient’s economic, legal or personal position is considered a benefit.
Typical examples include:
- Cash payments or gift certificates,
- Invitations to events or trips,
- luxurious business dinners,
- Hotel stays,
- Discounts or special terms,
- Consulting contracts without any actual services,
- the coverage of out-of-pocket expenses,
- or benefits for family members.
Even small gifts can be problematic if they are related to the performance of official duties or business decisions. Often, what matters is not the objective value of the benefit, but rather the purpose of the gift and the specific context.
4. What is considered bribery (Section 304 StGB) and what offering a bribe (Section 307 StGB)?
Bribery occurs when a public official demands, accepts or agrees to accept a benefit in exchange for an act or omission contrary to their official duties. Bribery also applies to the other party: anyone who offers, promises or grants a benefit to a public official in order to induce an act contrary to their official duties is also liable to prosecution.
The key factor here is what is known as the “agreement to commit an unlawful act” — that is, the link between a benefit and a specific action. It is precisely this connection that is often examined in criminal investigations through emails, chat logs or internal documents.
A classic example is an ongoing procurement process: If a contractor offers a decision-maker money or other benefits in order to obtain inside information or an invitation to bid, this may already constitute a criminal offense — even if the desired decision (award of the contract) is not ultimately made.
Corruption investigations in this field often result in searches of premises, the seizure of data and significant damage to a company’s reputation. For companies, the stakes are often much higher than just the criminal liability of individual employees.
5. What is considered as acceptance of a benefit (Section 305 StGB) or the offering of a benefit (Section 307a StGB)?
Not all acts of corruption under criminal law require a breach of duty. The solicitation, acceptance or promise of a benefit in exchange for the proper performance of official duties may also be a criminal offense. Conversely, this also applies to the offering, promise or granting of such benefit. The legislature intended to prevent the creation of a general relationship of goodwill through gifts or invitations.
Example: A company meets all the requirements for a business license. After the application process is successfully completed, the CEO sends the relevant government official a gas station gift card good for several fill-ups as a “thank you.”
6. What does “baiting” mean in the context of corruption law (Sections 306 and 307b StGB)?
The practice known as “baiting” (in German: Anfüttern) deserves special attention. This refers to the repeated solicitation or granting of benefits without immediate consideration, with the aim of establishing a positive relationship over the long term or influencing future decisions. This is precisely where the offenses of accepting and offering benefits to influence others come into play. The legislature aims to prevent the gradual development of personal dependencies. Long-term business relationships, in particular, are therefore increasingly coming under the scrutiny of investigative authorities.
In practice, the line is often difficult to draw. While business meals and small tokens of appreciation are a normal part of business life, things become problematic when it comes to luxury events, high-priced invitations or recurring benefits. This is precisely why it is important for companies to implement strict compliance rules regarding gifts, invitations and sponsorship activities. Clear internal guidelines must be established and documented to specify which benefits are permissible and which approvals are required.
Example: A sales representative regularly invites the purchasing manager of a majority-state-owned company to exclusive events. Even though no explicit quid pro quo has been agreed upon, this can still create the impression that the sales representative is attempting to influence decisions.
7. What constitutes corruption in the private sector?
Section 309 StGB governs “bribery and corruption in business transactions.” The provision is intended to protect fair competition and honest business decisions. A person commits a criminal offense if they perform or omit legal acts contrary to their duties in the course of business activities and, in return, demand, accept or have promised an benefit, or conversely, offer, promise or grant such benefit. Unlike traditional corruption offenses, this provision does not concern the exercise of public office, but rather private business relationships.
Example: A purchasing manager at a private company regularly places orders with a specific supplier. In return, he receives hidden commission payments into a personal bank account. In doing so, the purchasing manager violates his obligation to act solely in the best interests of his company. At the same time, the supplier gains an unfair competitive advantage over other suppliers.
It is particularly in the areas of procurement, sales and contracting that companies face significant risks under Section 309 StGB. Many investigations are initiated by internal reports, compliance reviews or whistleblower reports.
8. What are the potential consequences of corruption?
Corruption offenses are among the most serious economic crimes in Austria. Depending on the offense and the value of the benefit, offenders face a severe prison sentence of up to fifteen years.
In addition, this may result in professional bans, ineligibility for public contracts or severe damage to one’s reputation. The Companies Liability Act is also particularly relevant, as it may result in additional fines. This means that not only individuals but also companies themselves can be held criminally liable.
9. Conclusion
Even invitations, gifts or long-term relationship-building can have criminal implications. At the same time, the legal regulations are complex and the boundaries are often difficult to discern in practice. Furthermore, corruption is not limited to Austria’s borders but particularly affects international business relationships and transactions within and with other countries.
Companies should therefore establish clear compliance structures, transparent processes and seek legal counsel at an early stage. In particular, the broad definitions of “public official”, “acceptance of benefits” and “bribery” regularly lead to uncertainty and protracted, costly investigations. An early legal assessment can help minimize risks and avoid criminal consequences.
Legal advice on corruption law from LEUKOS Attorneys at Law in Vienna.
We provide comprehensive legal advice to — and defend — companies, government agencies, private individuals and public officials in the areas of criminal corruption law, compliance and white-collar crime. We assist with preventive measures, internal investigations and defense in both pre-trial and court proceedings.
We would be happy to provide you with a confidential initial consultation.