Austria, Schoenherr updates

Corporate Finance/M&A

Contributed by Schoenherr
New FDI screening act
  • Austria
  • 30 September 2020

In July 2020 a new foreign direct investment (FDI) screening act, the Investment Control Act (ICA), entered into force. The ICA, which largely transposes the requirements of the EU Foreign Investment Screening Regula­tion, is in line with the general EU trend of tightening or enacting FDI screening instruments, which has been fuelled by concerns of buy-outs of critical European infrastructure by foreign investors due to the COVID-19 pandemic.

Transaction price mechanisms in times of COVID-19
  • Austria
  • 12 August 2020

In times like these, parties should consider the key parameters of a contemplated transaction even more carefully. In addition to factors such as pricing, process timelines and contractual undertakings, parties must properly consider the COVID-19 pandemic's potential economic effects on targets when structuring a deal. This article outlines the differences between the two main purchase price mechanisms that can help to alleviate such economic effects and the pros and cons of each.

Supreme Court facilitates financing companies with cross-border business
  • Austria
  • 15 May 2019

For the first time, the Supreme Court has upheld a security right granted under German law, even though the asset had been transferred to Austria. Previously, such rights were terminated once the asset was moved from Germany to Austria. The decision will substantially facilitate the financing of companies with cross-border business.

Constitutional Court rules on Squeeze-Out Act's compatibility with Constitution
  • Austria
  • 31 October 2018

The Constitutional Court recently ruled on whether the Squeeze-Out Act is compatible with the Constitution. The plaintiff argued that certain provisions of the Squeeze-Out Act violate the Constitution because they restrict shareholders' property rights and the principle of equality (rights enshrined in both the Constitution and the European Convention on Human Rights). However, the Constitutional Court held that this was not the case.

Privacy-related representations in M&A agreements
  • Austria
  • 09 May 2018

Companies regularly store information about their customers, clients, employees, investors, partners and vendors. Privacy and data security are therefore important aspects of most M&A transactions. Although the risk of non-compliance with privacy laws may result in severe negative consequences, many M&A agreements still lack adequate privacy-related representations and warranties.


Energy & Natural Resources

Contributed by Schoenherr
Energy communities – is a business licence required?
  • Austria
  • 19 April 2021

Energy communities' electricity generation, supply and sale and offering and rendering of energy services raises the question of whether they fall within the scope of the Industrial Code 1994. The answer to this question primarily depends on whether a 'profit intent' is required for electricity companies. In addition, the question of commercial activity (ie, whether a commercial licence is required) must be clarified when establishing and structuring an energy community.

New solar energy funding scheme
  • Austria
  • 15 March 2021

In September 2020 the eagerly awaited draft Renewable Energy Expansion Act was published for evaluation. To help achieve the goals of the Paris Climate Agreement 2015, the draft creates new framework conditions for the expansion of renewable energy in Austria. This article examines key elements introduced by the act with regard to solar energy funding schemes, including calculating market premiums, the tender procedure, investment grant requirements and provisions for photovoltaic plants.

Network reserve to become part of congestion management system
  • Austria
  • 18 January 2021

With an amendment to the Electricity Industry and Organisation Act passed by Parliament, the network reserve will become part of Austria's congestion management system. The aim of the network reserve is to achieve network stability and security of supply in an efficient and cost-effective manner. Procurement is carried out within the framework of a transparent, non-discriminatory and market-oriented tendering procedure.

Sparking change: Renewable Energy Expansion Act published for evaluation
  • Austria
  • 19 October 2020

The eagerly awaited draft Renewable Energy Expansion Act (EAG) was recently published for evaluation. To help achieve the goals of the Paris Climate Agreement 2015, the draft creates new framework conditions for the expansion of renewable energy in Austria. In view of the high level of funding, the EAG leaves no doubt that the expansion of renewable energies is one of Austria's main objectives for the next 10 years. However, a look at other countries clearly shows that funding alone will not be enough.

Consultations on TAR NC and second amendment to Gas System Charges Ordinance
  • Austria
  • 22 June 2020

EU Regulation 2017/460 established a network code on harmonised transmission tariff structures (TAR NC). On 31 January 2019 E-Control – Austria's national regulatory authority – published its consultation document on the implementation of the TAR NC in Austria. This article discusses the subsequent developments.


Environment & Climate Change

Contributed by Schoenherr
New ruling expands environmental organisations' rights in nature conservation procedures
  • Austria
  • 12 April 2021

In 2020 the Higher Administrative Court issued an interesting ruling regarding the party status of environmental organisations (EOs). Until now, the scope of EOs' participation rights in Austrian nature conservation proceedings was unclear. The court's ruling clarifies that EOs' party status is to be interpreted broadly. For companies which plan on implementing projects, this ruling could create significant legal uncertainty.

EIAs: grubbing ups and path clearances for overhead electrical power lines to be treated differently
  • Austria
  • 25 January 2021

When it comes to clearing a path in a forest to construct and operate an overhead electrical power line, electricity grid operators face various legal issues. In its recent decision on the 380kV Salzburg line, the Supreme Administrative Court considered whether the permitting requirements of the Forestry Act stipulated for grubbing ups must also be applied to path clearances in an EIA permitting procedure by reason of EU law.

COVID-19 Phase 2 and environmental procedural law
  • Austria
  • 06 July 2020

Section 3 of the Administrative COVID-19 Accompanying Law adapts the requirements for official acts and public communication with authorities to reflect the restricted freedom of movement and contact. This article examines how the revised version of Section 3 affects environmental law procedures (eg, water, environmental impact assessment, waste, construction and conservation).

Implications of COVID-19 for legal procedures under Austrian Environmental Law
  • Austria
  • 04 May 2020

In the context of local and personal COVID-19 quarantine measures – and the associated absences of officials and affected persons – a federal law (COVID-19-VwBG) was passed setting out special procedural regulations for administrative authorities, administrative courts, the Supreme Administrative Court and the Constitutional Court. This article discusses the implications for the legal procedures set out in the Environmental Law resulting from the new temporary COVID-19-VwBG.

New opportunities for renewable energy: Austrian government programme 2020 to 2024
  • Austria
  • 24 February 2020

Austria's new coalition government consisting of the People's Party and the Green Party recently published its programme for the legislative period 2020 to 2024. The programme is called Taking Responsibility for Austria and should make Austria a pioneer in climate protection. The Paris Agreement climate targets are to be met at all costs, while the Climate Protection Act should ensure that Austria does not exceed its CO2 budget.


Projects, Construction & Infrastructure

Contributed by Schoenherr
The time has come: Federal Procurement Act 2018 just around the corner
  • Austria
  • 12 June 2018

More than four years after the entry into force of the new EU Public Procurement Directive, more than two years after the deadline for transposition and more than one year after publication of the first transposition draft, the time has come. Following the resolutions of the Council of Ministers and the Federal Council, it can be assumed that the Federal Procurement Act 2018 will enter into force by July 2018.

Imminent implementation of public procurement directives
  • Austria
  • 21 March 2017

Almost one year after the two-year transition period of the EU directives on public procurement law expired, Austria published a consultation draft of the new Federal Procurement Act 2017 to implement the directives. While Austria took a somewhat conservative approach when implementing the directives, there are some areas where the Austrian draft for the transposition of the directives is significantly stricter than the directives themselves.

Court rules on rights in environmental impact assessment
  • Austria
  • 17 January 2017

The Federal Administrative Court recently addressed whether the party to a winning project in a conflict procedure was entitled to claim rights in the environmental impact assessment for the inferior project. The court ruled that, on the one hand, the legal standing of a party in a conflict procedure is not strictly restricted to that procedure. On the other hand, the court found that being party to a conflict procedure does not guarantee unlimited legal standing in the approval procedure of the other project.

Procurement thresholds increased until 2018
  • Austria
  • 08 November 2016

The regulation increasing the Procurement Act's thresholds has been extended for a further two years. Thus, contracting public authorities can continue to benefit from the significantly wider application of the direct award procedure and the so-called 'restricted procedure without prior publication' until 2018. However, contracting authorities should be aware that the Treaty on the Functioning of the European Union may still require an ex ante notice for contracts of a certain cross-border interest.

Austria fails to implement new procurement directives in time
  • Austria
  • 03 May 2016

The two-year transition period for implementing the new EU directives on public procurement recently lapsed. While the majority of member states have at least partially implemented the directives, Austria has yet to pass draft legislation transposing any of them. However, despite this, the directives (at least in significant parts) already apply in Austria and individuals can – either directly or indirectly – rely on the majority of the provisions therein.


Tech, Data, Telecoms & Media

Contributed by Schoenherr
Facial recognition technology: regulations and use
  • Austria
  • 16 April 2021

In recent years there has been an increased use of technologies that match a person's digital image to a picture database. While the Austrian legal system does not expressly permit the use of such technology, the Ministry of the Interior uses it to identify unknown perpetrators suspected of intentionally committing a criminal offence. Austrian privacy experts worry that without an explicit legal basis, the use of facial recognition software may result in the gradual extension of powers.

Dashcams – safety versus privacy? The Austrian perspective
  • Austria
  • 27 November 2020

Dashcams have become increasingly popular in recent years and a built-in dashcam is now the most sought-after feature among car buyers. Buyers' primary motivation is self-explanatory: recorded footage can be used as evidence in case of an accident. However, whether dashcams are incompatible with privacy and data protection law and thus illegal on Austrian roads is a tricky question.

Third COVID-19 Act: lawfulness of processing employee health data
  • Austria
  • 08 May 2020

Parliament recently enacted the Third, Fourth and Fifth COVID-19 Acts. Although these laws have significantly changed the Austrian legal framework, none of them include data protection provisions. Thus, the legislature appears to have overlooked a significant data protection issue arising from the new law – namely, the conflict of interests between the amended Social Insurance Act and the EU General Data Protection Regulation.

COVID-19: telecoms and data protection developments
  • Austria
  • 01 May 2020

Due to the COVID-19 pandemic, telecoms providers must now send mass alerts (eg, regional access prohibitions) via text message on order of the government and provide traffic and location data for the purposes of evaluating whether individuals are complying with quarantine orders. In addition, a number of legislative developments have taken place with respect to data protection. This article outlines these recent changes.

Article 15(3) of GDPR and right to access files or documents – an Austrian perspective
  • Austria
  • 20 December 2019

With the adoption of the EU General Data Protection Regulation, the EU legislature intended to strengthen the rights of individuals (ie, data subjects or applicants) by giving them greater control over how their personal data is used. Applicants must be informed of the processing of their personal data and be able to verify whether such processing is lawful. Accessing documents is not necessary to achieve that goal. This view is supported by two recent Austrian decisions.