Corporate criminal liability: key developments in Austrian case law in 2025

Committing an act for the benefit of an association

One of the two alternative criteria for attributing a criminal act to an association is that the act must be committed by an employee or a decision-maker (Entscheidungsträger) for the benefit of the association (zugunsten des Verbandes). According to established case law and literature, an offence is committed for the benefit of the association only if it provides or was meant to provide the association with a concrete economic advantage, such as a direct financial gain, saving of costs or competitive advantage. 

The matter on which the Austrian Supreme Court's decision of 24 September 2025 (13 Os 10/25g) is based arose from the conviction of an association for several economic offences. The managing director, who qualifies as a "decision-maker" under the VbVG, had paid undeclared wages to an insolvent employee over several years and submitted fictitious loan agreements, thereby harming creditors. The trial court considered the requirement of acting "for the benefit of the association" fulfilled and convicted the entity.

The court left open, however, which facts of the case it relied on in reaching its legal conclusion that the "undeclared wages" paid to the association in question constituted "an economic advantage". As a result, this part of the decision was overturned by the Austrian Supreme Court, which ordered a retrial of the matter in respect of this aspect.

The OGH reinforced this strict standard shortly thereafter in a decision dated 7 October 2025 (11 Os 94/25w). In that decision, it emphasised that a mere repetition of the statutory wording in the judgment is insufficient; rather, courts must make specific factual findings regarding the economic flow of benefits.

Violations of obligations incumbent upon the association

In the previously mentioned decision of 24 September 2025 (13 Os 10/25g), the Austrian Supreme Court also criticised the lower court failing to establish any factual basis indicating that the obligations incumbent on the association had been violated by the actions of its decision-maker. Although such a violation constitutes an alternative basis for attributing criminal acts conducted by decision-makers or employees to an association, the present case did not meet this threshold. The direct perpetrator was merely obliged, as a debtor, to disclose all income in the debt settlement and skimming proceedings concerning him, and his failure to do so did not satisfy the requirements of Section 3(1)(2) VbVG.

Authorisation of a de facto decision-maker to represent an association in criminal proceedings

The OGH addressed the de facto managing director's authority to represent the association in criminal proceedings in its decision of 17 September 2025 (12 Os 67/25g).

In the matter leading to the Austrian Supreme Court's decision, a fine was imposed on the association because its de facto managing director had committed fraud. In the subsequent proceedings, this de facto managing director filed a legal remedy appealing the judgment rendered against the association on its behalf.
It is undisputed that the acts constituting a criminal offence may be attributed to an association, rendering the association criminally liable. However, the Austrian Supreme Court, in accordance with the lower court's reasoning, rejected the remedy because it had not been filed by an authorised representative. It held that such procedural rights belong exclusively to the association itself, acting through its competent organs. A de facto managing director has no such authority and therefore cannot make valid procedural declarations.

Striking a similar tone, in its decision of 7 October 2025 (11 Os 88/25p), the Austrian Supreme Court ruled that an appeal must clearly specify whether it challenges the judgment rendered against the individual or the association. A generic filing is invalid and cannot be remedied subsequently.

Victim status of an association

In decision 8 Bs 83/25z, the Linz Higher Regional Court (Oberlandesgericht Linz, OLG Linz) examined the circumstances under which an association qualifies as a victim pursuant to Section 65(1)(c) of the Austrian Code of Criminal Procedure (Strafprozessordnung, StPO). Under that provision, victim status presupposes damage or other impairment of legal interests protected by criminal law caused by "one", namely "the", criminal offence that is the subject of the proceedings. In cases where legal entities may be victims of the alleged criminal offence, only the legal entity itself (represented by its institutional representatives) is to be regarded as a victim within the meaning of Section 65(1)(c) of the Code of Criminal Procedure. Conversely, the victim status of a managing director or shareholder arising from a direct impairment of their own legal interests cannot automatically (also) confer victim status on the legal entity.

In the present case, the suspicion underlying the criminal proceedings concerned preparatory acts of attempted fraud that had caused no financial loss. Consequently, the association had no concrete civil claim and therefore could not be regarded as a victim, because no damage had occurred.

With respect to the impairment of legal interests protected by criminal law, the association relied on the Austrian Public Procurement Act (Bundesvergabegesetz, BVergG) to substantiate the violation. The Austrian Supreme Court acknowledged the argument that this standard also protects the other bidders' assets.

However, the court concluded that the present criminal investigations were conducted on suspicion of serious fraud, an offence that only protects individual legal property interests.

Diversion under Section 19 VbVG and the mandatory two-step structure

In its decision of 10 February 2025 (21 Bs 21/25d), the Vienna Higher Regional Court (Oberlandesgericht Wien, OLG Wien) clarified that a final discontinuation of proceedings under Section 19 VbVG (so-called diversion) is permissible only after a statutory probation period has been completed. 

In the case at hand, the trial court considered the requirements for diversion fulfilled and argued that no corporate fine was necessary due to the association's liquidation and the procedural burden it had already faced. However, instead of issuing a preliminary discontinuation with a probation period, it issued a final decision.

The OLG Wien overturned this ruling. Referring to Section 19(2) VbVG in conjunction with Section 203 StPO, the court confirmed that diversion follows a mandatory two-step procedure:

1.    Preliminary discontinuation, with a probation period of up to three years.
2.    Final discontinuation only after the probation period has elapsed and the association has complied with all conditions.

Hence, the final discontinuation was premature, irrespective of the association's liquidation or the possibility of its deregistration. The preliminary discontinuation is required by statute and cannot be bypassed. 
Stricter standards prevail

Recent case law demonstrates that Austrian courts are applying increasingly stringent standards to the correct application of the VbVG. Mere repetition of statutory language in judicial decisions is not deemed sufficient. 
This heightened scrutiny is particularly evident in matters concerning the attribution of criminal offences to associations, where courts and investigative authorities may not rely on unsubstantiated references to the VbVG without articulating the specific factual basis for their legal conclusions. Similarly, a clear factual foundation must be established when determining whether obligations incumbent upon the association have been violated.

The requirement for substantiated factual findings extends equally to procedural matters, including the assertion of legal remedies on behalf of associations. The Supreme Court has clarified that only duly authorised representatives may exercise procedural rights on behalf of associations, and appeals must clearly specify the party on whose behalf they are filed.

Taken together, these developments reflect an increasingly nuanced body of case law that refines the boundaries of corporate criminal liability while reaffirming established principles.

authors: Oliver M. Loksa, Marc Cistota