COMPLIANCE

• Compliance = conduct in accordance with rules and regulatory requirements

• Compliance > anti-corruption provisions
  (other examples: tax, IT, environment, labour law, data protection, capital market etc.)

• Compliance = preventive measures (including control and possible reaction)

• Criminal law = sanctions after the event

• Proactive prevention of damage to the company,

  • – Economic damages, damage compensation, void contracts, UWG

  • – Penalties

  • – costs of proceedings

  • – image loss

• Active risk management (prevention, control, response),

• Can be an important criterion for assessing the existence of intent

  in the case in question

• Can exclude the offence (VbVG, if no decision-makers) or mitigate the punishment.

• Compliance can take place within the company, but also (in addition) by external parties (e.g. also trained event agencies).

• Awareness of “unclean business practices” is growing, as an outgrowth it can lead to overanxiety, uncertainty is currently high.

• “Classics” : embezzlement (§153), acceptance of gifts by persons in power (§153a), abuse of office (§302), fraud (§146ff)No “novelty”, no specific reference to events (hidden due to time constraints).

• Private sphere: especially § 309 StGB (new)

• Public domain:

  • – Corruption (§ 304): passive – Bribery (307): active

  • – Acceptance of advantage (§ 305): passive – Granting of advantage (§307): active

  • – Prohibited intervention (§ 308) (hidden here due to time constraints)

• articularly relevant for events (“climate care”, “feeding”):

  • – Acceptance of advantage to influence (§ 306): Passive

  • – Granting an advantage to influence (§ 307b): Active

• Legal situation in Germany similar, but not identical. There are numerous private and public guides (often available on the internet, partly differentiated according to sectors and areas) that can provide guidance.

• Active bribery (para 2), Passive gift acceptance (para 1)
• Only action/omission contrary to duty (!)
• No general ban on feeding / ban on climate maintenance
• “In the course of business” (i.e. not only within the company, but also in

  social or non-profit enterprises).

• “Staff and agents” (with influence on operational decisions)
• Demanding, accepting or granting benefits for actions contrary to one’s duties is a criminal offence.
• No de minimis limit!
• Official offence, 2 years, 3 years (> € 3,000), 6 mo to 5 years (> € 50,000).
• Tips for the private sector:
  • Transparent invitation lists and criteria
  • Consent of the company owner (suggested wording for invitation)
  • Addressing the invitation to the holder, who decides who will accept the invitation.
  • Avoid delicate situations (e.g. during pending lawsuits and proceedings).
  • Unusually generous gifts are not usually given for purely dutiful actions
• “That ́s it” for purely private use! BUT: It is often difficult to make a clear distinction between people invited to events. In the case of mixed audiences, higher standards for office bearers must be applied! Attention: Often stricter abroad!

• The central connecting factor is the term “public official”, which was amended and expanded by the CorrStrÄG 2012.

• Public official > Public official, public official broadly defined

• No privileged treatment of domestic representative bodies

• An office bearer is (simplified)

  • – Whoever organisationally performs tasks as an organ or employee in the “public sector” (also abroad!), whether sovereign or private sector, is irrelevant, even factual performances are sufficient.

  • – Whoever functionally performs official acts in execution of the laws

  • – Whoever is an organ/employee of a company which a local authority (also abroad!) controls or the ACA controls (also such a foreign institution!)

    Regional authority (also abroad!) controls or the ACA controls (also such a foreign institution!)

• Spin-off therefore does not destroy official status

• Generally civil servants of the Federation, countries and municipalities

• In each case, organs or servants of:

  • Certain security companies with a sovereign mandate (e.g. airport or car park surveillance)

  • Motor vehicle workshops for the issue of stickers (§ 57a Para. 2 KFG)

  • (Toll supervisory bodies of) ASFINAG

  • ORF

  • Wien Energie, Wiener Linien, ÖBB, Post, Bundesbeschaffung GmbH, Federal Accounting Agency,

• • Hospitals of the regional authorities, hospital association

  • Salzburg Festival Fund

  • Bundesimmobiliengesellschaft (Federal Real Estate Company)

  • Federal Computing Centre, Justice Support Agency

  • Universities established under the Universities Act

  • International organisations including the EU

  • Foreign states and their subdivisions (territorial authorities)

  • Domestic & foreign parliamentarians (also EU!) or foreigners. Civil servants (also EU)

• Intent must also refer to official capacity. The question of proof! Too many apparent “coincidences”, however, unbelievable!

• Officer or arbitrator or expert

• Official act contrary to duty

• No exception for “not undue advantages”

• No de minimis limit

• 2 yrs, 6 mo to 5 yrs (> € 3,000) , 1 – 10 yrs (> € 50,000)

• Officers or arbitrators

• Dutiful official business, connection of advantage & official act

  (different from “feeding”)

• Passive: forbidden in any case: Demand

• Passive otherwise: to accept or be promised an undue advantage.

• Active: offering, promising or granting undue advantage

• 2Years,3Years(>€3,000),6Months-5Years(>€50,000)

• “Speed Money” as an example.

• Relevant in the case of advantages for official duties and “feeding” or “climate care” (§ 306/307b) – thus only for public officials!

• Not improper are:

  • Z1: benefits permitted by law (§ 59/2 BDG: benefits customary in the locality or country).

    courtesies of little value)
    (outside the scope of employment or third-party performance-related fees)

  • Z1: Official or objectively justified interest in participation (representational duties)

  • Z2: Contributions for charitable purposes without the influence of the public official

  • Z3: customary local or national courtesies of low value

  • No commercial character

• “Advantage” in itself is to be understood in the broadest sense as any benefit to which there is no entitlement: sham contracts, excessive discounts, electoral subsidies, indirect benefits (to close relatives), discounted interest, vouchers, also intangible improvements (even sexual favours), provision of a holiday post for children, etc.

• Sponsoring (i.e. donations to organisers based on advertising or image cultivation) is in itself permissible and unobjectionable. If, however, the sponsor passes on free tickets to public officials (in connection with an official function) as a result of such benefits to him/herself, this is subject to the general assessment criteria.

• Reasonable fees (or reimbursement of costs for third-party services) for lectures or contributions to discussions, even if they relate to the immediate functional area of the office bearer. Permissibility of this secondary activity should be assumed.

• Bonus miles (but not “upgrading”) for the benefit of a public official personally for official flights, because these are granted to every passenger regardless of his public official status (but: possible disciplinary regulations).

• Donations that serve the purpose of information (e.g. scientific works), which the author gives to a public official involved in the matter as a dedication copy. leaves

• less delicate (because there is often no connection to official business): donations to a larger community (coffee fund of a hospital department), larger invitations to customary occasions (opening of a law firm, events specific to a professional group).

• Remuneration due under employment law (overtime, bonuses, gratuities…)

• Benefits expressly permitted by law (e.g. § 59 BDG, § 26 UG: for research purposes, NR-GOG)

• Usual advantages in the context of officially or objectively justified participation in events: not, however, personal gifts without reference to the event, criteria: topic and objective of the event, function of the office holder, uniformity of the grant, transparency

• Benefits for charitable purposes (§ 35 BAO) without influence of the office holder. Art, science, health care, social or charitable institutions, nature conservation, local history, disaster relief

• Low-value local and regional gifts (not commercial): small hospitality, souvenirs, souvenir photos, flowers, event-related small items (i.e. rather low-value “give-aways & promotional items”), BUT: According to the Administrative Court, cash (“tips”) is NEVER customary in a local or regional context,

• Judges are subject to a particularly strict ban on accepting gifts (section 59 RStDG).

• Even a benefit that is not undue must never be actively demanded!

• No de minimis limit on feeding for the person actively conferring the benefit

• Active and passive “feeding” or “climate care” is thus recorded.

• Disciplinary law (BDG) and service law (e.g. § 13 AngG) remain unaffected.

• The aim (intent!) is to hinder a public official in his official activity by an

  undue advantage – detached from any specific official business. Intent to cause damage (e.g. charging overpriced prices) is not required!

• Influence is any interference with benevolent treatment, whether dutiful or in breach of duty. However, it must be directed at the future activity (unlike corruption offences related to a concrete official act). The closer the points of contact with the officer’s area of responsibility, the more delicate!

• Overall view of all circumstantial evidence. Movable system Clarity leaves much to be desired, some criteria follow.

• Marginal limit (max. € 100.-) only in the case of passive feeding (acceptance or promise, not demanding (= always improper)), not in the case of active feeding. There only “no undue advantage”.

• Comparable (but not identical!) legal situation in Germany. Therefore, German examples and guidelines can certainly be used, but not unconditionally.

• Plausibility of other objectives (advertising, information etc.) – common sense!
• Targeted nature of the advantage (specifically for public officials or very wide dispersion)
• Position and importance of the office holder & official points of contact (the closer the points of contact between the company and the responsibility of the office holder, the more delicate); “separation principle”: benefit should be separated in terms of content & time from official business.
• Other relationship of the benefactor to the public official (friendship, kinship)
• Procedure for granting advantages (transparent, clandestine, covert) & timing
• Value and regularity of the advantage, individuality of the advantage, appropriateness & social adequacy
• Part-time type of benefit: tangible assets more sensitive than intangible assets
• Overall assessment is crucial! Example of very delicate or inadmissible advantages:

• • A building contractor who regularly carries out building projects in the area of responsibility of the building officer provides his son with a desired holiday job.
  • A pharmaceutical company regularly organises free vaccinations with its vaccine for the “purchasing department” (the staff responsible for purchasing) of a public hospital.
  • A pharmaceutical company distributes (unusually generously) valuable drug samples to the private surgery of a doctor who is also (co-)responsible for the procurement of drugs for the armed forces.

• Send invitations on official company stationery to the business address of the invitee or directly to the company owner.

• Put a reservation of approval on the invitation.

• “Information event with expert lecture” instead of “Family trip with

  social programme”

• Transparent processes and contents – already disclosed in the invitation, circle of participants. If necessary, involve an event agency!

• Deductibles for extensive events with a high experiential or leisure character (especially for benefits or “additional modules” not necessary for the event, such as sporting events, concerts, overnight stays, expensive hospitality, etc.).

• More company-related than person-related (loyalty programmes etc.)

• Temporally outside of immediate tendering or

  procurement situations.

• Exclude as far as possible the appearance of a connection with official business people or people with office holder status – even through innuendos or “funny” remarks. Invite officials in ongoing proceedings or with specific responsibility for the company (responsible building police officers).

• Keep and update invitation lists in a targeted and transparent manner, establish criteria for participation in events in a transparent manner, clarify office holder status in advance if possible,

• Non-technical entertainment events without information value (golf tournaments, important football matches, concert events, incentive trips)

• Generous gifts and valuable give-aways

• Invite family and accompanying persons without company connection free of charge

• Creative programming with information value instead of expensive

  supporting programme with extensive catering

• Advertising, creativity and information are NOT frowned upon!

• Use common sense: Why would I participate? Because of the entertaining information session or for personal

benefits?

• Reminder: One and the same act can be punishable depending on whether there is a corresponding intent or not. However, the inner intention is often inferred from external circumstances! Through transparency, compliance and documentation of processes and procedures, lengthy procedures can be avoided, simplified and shortened.

• Type of event! Professional event, mixed event, entertainment event? But: creative and entertaining presentation of information per se is unobjectionable and does not turn a professional event (in terms of criminal law) into an entertainment event (except for a comprehensive supporting programme without any reference to information) – cf. the often pompous product presentations of Apple, Microsoft, Samsung, etc.

• Official contact with the public official, provided it is not merely official representation. Counter-indications (e.g. close personal relationship, best man, etc.) of course possible transparency and documentation of the invitation criteria.

• Representation by a public official: Provided that only the necessary means for representation are provided and no influence is exerted on the performance of duties, this is unobjectionable. E.g. inviting a minister/lawyer from a ministry to give a lecture on a new law to an expert audience.

• Only performance-related and arm’s length remuneration for specialist lectures. In the case of invitations to remunerated lectures, point out that the invitee should clarify the permissibility of this activity with his/her superior.

• Transparency: Is also guaranteed by the dt. BGH expressly emphasised in the EnBW ruling.

• Nature and manner of the benefit: Value, appropriateness, social adequacy,

  Usuality, frequency

• Key sponsorship concepts, professional event organisation

• A hotel has newly renovated and would like to invite regular customers and agencies.

  • Permitted: Invitation to the hotel presentation with multimedia presentation, guided tour of the hotel, serving of snacks and drinks or tasting of the highlights of the cuisine, fireworks.

  • Permitted: Promotion of one overnight stay at a reduced introductory offer

  • Tricky: Free overnight stay for a public official (even more delicate: together with family)

• A caterer wants to present its newly revised range of services to selected customers and agencies.

  • Permitted: The chef presents the highlights of the dishes on offer, a nutritionist explains the nutritional benefits of the healthy dishes in an exciting lecture and a sommelier describes the new range of wines. At special show cooking stations, participants can try the cooking experience for themselves.

  • (Very) Tricky: Vouchers for drinks in specialist wine shops at no extra charge to public officials

• A pharmaceutical company wants to present an improved drug to doctors.

• • Permitted: Exciting information event with multimedia presentation of expert speakers on the advantages of the product (e.g. on the basis of scientific studies) accompanied by a reception with small dishes and drinks as well as a short artistic musical performance at the end. Unsaleable doctor’s samples in very small quantities.

  • Tricky: The doctors include public officials: Invitation to a luxury hotel in a posh ski resort including payment for travel and accommodation.

The bestowal of courtesies among professionally connected people is common in this country, especially on occasions such as Christmas. Not only classic gifts such as discounts or vouchers, but also services or invitations to events serve as benefits.

As mentioned above, no advantage may ever be granted to induce a business partner or potential business partner to commit an act in breach of duty, which includes not only acts obviously in breach of duty such as disadvantageous transactions, but also internal violations such as compliance guidelines, as well as expedited treatment by public officials.

If no advantage is granted for official conduct in breach of duty, a distinction must be made between office bearers and non-office bearers (see above), since in the case of office bearers, the mere “feeding” already mentioned (see also above) can be punishable. Furthermore, in the private sector, a benefit is not problematic if the recipient is authorised to accept it, whereas public officials are subject to tighter limits in this respect. However, they too can accept “customary local and regional attentions of low value”.

It is therefore advisable to grant Christmas gifts,

• • … First of all, it is necessary to check whether the donee may have become a public official according to the new legal situation and the expanded definition of public official in 2013.

  • … Never give cash to a public official.

  • … only “small courtesies customary in the locality and the country” to a public official.

    Although the judicature sets the limit at € 100, it is advisable to stay well below this amount, as the value limit is disputed.

• • … to give gifts to those from whom gifts can also be expected. This is because in the case of reciprocal occasion-related gifts, only the value exceeding the other gift would constitute a unilateral advantage that might be problematic.

  • … to ensure that invitations to events are justified on official or factual grounds (see above).