Austrian law knows two – arguably three – versions of the principal witness rule: On the one hand, the “small” and “large” principal witness rules, found in Section 41a of the Austrian Criminal Code (Strafgesetzbuch, StGB) and Section 209a of the Austrian Code of Criminal Procedure (Strafprozessordnung, StPO), respectively, apply to certain criminal offenses. The principal witness rule in antitrust law, on the other hand, is found in Section 11b of the Austrian Competition Act (Wettbewerbsgesetz, WettbG) and Section 209b StPO, and finds usage in uncovering, investigating, and prosecuting cartel offenses.
Effective on 1 January 2022, the Austrian legislator extended the initially limited period of applicability of Sections 209a and 209b StPO for seven more years and introduced amendments to both the large principal witness rule and its antitrust counterpart. These revisions will be the focus of this article. In the first part, the large principal witness rule will be discussed. The second part will focus on the principal witness rule in antitrust law.
1. The Principal Witness Rule in Austrian Criminal Law
1.1. When was the principal witness rule introduced into Austrian criminal law?
Austria is obliged by international law to have a principal witness rule in place. By ratifying the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, Austria committed to a shared responsibility “to combat bribery of foreign public officials in international business transactions”.[i] Non-trial resolutions or settlements have become an increasingly important pillar of combatting serious economic crimes, including bribery of foreign officials.[ii]
On 1 January 1998, the so-called “small” principal witness rule came into force in Austria. It held out the prospect of mitigating circumstances for the witness applicant, but at that time the legislature did not want to grant complete immunity from prosecution.
On 1 January 2011, the “large” principal witness rule entered into force additionally. Its applicability had initially been set to expire on 31 December 2016. A practical evaluation, however, showed that, while the rule’s importance was recognized, it had been applied only in a few cases since its introduction. A final evaluation of the rule was therefore not possible. On 1 January 2017, the legislator enacted a revised version of the rule that was set to expire on 1 January 2022.[iii]
In 2020, a further evaluation showed that the principal witness rule was considered positive and could not be dispensed of, while areas of improvement were identified yet again. In light thereof, as well as Austria’s international obligations, the rule was again revised and extended for seven more years to allow for further evaluation.[iv]
The latest amendments to the large principal witness rule are discussed in question 1.3 below.
1.2. When does the principal witness rule apply?
Only certain serious acts, which are further defined in the statute, can give rise to the applicability of the principal witness rule.
In short, for the principal witness rule to be applicable, principal witnesses must:
- voluntarily disclose their knowledge, which must contribute significantly to the clarification of criminal acts beyond their contribution – at least one third party must always have been involved;
- voluntarily turn to the public prosecutor’s office or the criminal police;
- make a remorseful confession;
- not yet have been questioned as a suspect and no coercion must have been exerted.
If a potential principal witness approaches the public prosecutor’s office, the latter must conduct a preliminary examination to determine whether the principal witness rule can be applied. The prosecution must be provisionally discontinued if there are no obvious reasons not to do so. If it subsequently turns out that the requirements are met, the public prosecutor’s office must proceed as in the case of a diversion. This means that it imposes a certain condition on the principal witness, e.g. the payment of a sum of money, the performance of community service, or the setting of a probationary period, as well as the obligation to further cooperate with the public prosecutor’s office in solving the crime. If the principal witness has rendered the ordered services, the public prosecutor’s office shall discontinue the preliminary proceedings while reserving the conditional right to later prosecution.
If the criminal proceedings against the third party or parties have been discontinued with final effect or if the measures against the third party have been terminated due to the third party’s arrest, the public prosecutor’s office shall finally discontinue the proceedings against the principal witness, provided that the principal witness has performed the ordered services or the set probationary period has expired. If further investigation reveals that the requirements are not met, the public prosecutor’s office shall continue the proceedings against the principal witness and notify him or her accordingly. In such a case, the requirements of the small principal witness rule may be met.
1.3. What are the most recent changes?
Before the most recent revision of Section 209a StPO, there had been uncertainty as to whether principal witness status could also be obtained by approaching the criminal police rather than the public prosecutor’s office. Indeed, had a potential principal witness approached the criminal police and had the latter not immediately coordinated with the public prosecutor’s office, principal witness status could not have been obtained.[v]
The amended text of Section 209a StPO now eliminates this uncertainty by clarifying that, in addition to the public prosecutor’s office, principal witnesses may also contact the criminal police. The further proceedings, however, remain in the hands of the public prosecutor’s office.
2. The Principal Witness Rule in Austrian Antitrust Law
2.1. When was the principal witness rule introduced into Austrian antitrust law?
Also in the field of antitrust law, Austria is obliged to ensure the applicability of a principal witness rule under Article 23 of Directive (EU) 2019/1 (the ECN+ Directive).
The principal witness rule has been part of Austrian antitrust law since 1 January 2006. The relevant provisions can be found in Section 11b of the Austrian Competition Act (Wettbewerbsgesetz – WettbG) and, on 1 January 2011, a corresponding provision entered into force in Section 209b StPO.
2.2. When does the Principal Witness Rule apply?
The principal witness rule in antitrust law allows the Federal Competition Authority (Bundeswettbewerbsbehörde) to refrain from imposing a fine on a cooperating company in case of certain antitrust violations.
Employees of such companies should also be given the opportunity to escape punishment as principal witnesses. To this end, the following conditions must be met:
- The Federal Competition Authority refrains from imposing a fine on the company, or the European Commission or the competition authorities of other Member States apply the principal witness rule;
- The Federal Cartel Prosecutor (Bundeskartellanwalt) considers that the employees who participated in the company’s infringement should not be punished for a related criminal offense and reports this to the public prosecutor’s office;
- The company’s employees must disclose to the public prosecutor’s office and the court all knowledge they have about their actions and facts that are important for the clarification of the criminal offenses.
If the requirements are met, the public prosecutor’s office shall discontinue the proceedings against the employees concerned, while reserving the conditional right to later prosecution.
2.3. What are the most recent changes?
The prior formulation of Section 209b (1) StPO had focused on the contribution of the company to the investigation of cartels. The revised rule is intended to additionally focus on the contribution of individual employees. As a result, the Federal Cartel Prosecutor will be able to differentiate between the contributions of individual employees, allowing only actively cooperating employees, but not those who refuse to cooperate with the Austrian Federal Competition Authority, to benefit from principal witness status.
This change serves to incentivize employees to reveal all their knowledge at an early stage of the investigation. The Federal Cartel Prosecutor inevitably can only draft a report to the public prosecutor’s office at a rather late stage in the proceedings, namely after the Federal Competition Authority has completed its investigation of a company. As a consequence, parallel criminal investigations conducted by the public prosecutor’s office can only be concluded after all facts have been disclosed. The earlier that employees reveal all their knowledge, the earlier criminal investigations can be concluded.[vi]
The active cooperation of individual employees is to be evaluated according to the cooperation of the employee that is possible based on the level of knowledge of the individual employee and the stage of the proceedings. If an employee only has partial knowledge that merely serves to uncover part of the unlawful conduct, but the employee nevertheless actively cooperates and reveals their entire knowledge in a timely manner, the employee should nevertheless be able to avail themselves of the principal witness protections as long as all other conditions are satisfied.[vii]
It has also been clarified that the extent of cooperation of the company itself is to be considered in the Federal Cartel Prosecutor’s notification to the public prosecutor’s office.
Section 209b (2) StPO has been revised to allow the public prosecutor’s office to stop its investigation of individual employees only when they have already revealed their knowledge. Previously, investigations could be stopped conditionally, subject to the employees’ commitment to reveal their knowledge. Again, this revision serves to encourage employees to reveal what they know at the earliest possible stage.
In general, it may be considered positive that the Austrian legislator has attempted to increase legal certainty by clarifying that principal witness status can be obtained also by approaching the criminal police and by taking steps to accelerate Section 209b StPO proceedings. It remains to be seen whether these amendments will increase the principal witness rules’ practical relevance, which – in the area of general criminal law – has been rather limited to date.
It is questionable whether the decision to restrict the rules’ applicability again (for a third time) is prudent to allow for a further period of evaluation and reform, or merely adds to uncertainty for potential principal witnesses. As has been pointed out elsewhere,[viii] the Austrian legislator limited the appraisal period to a mere two weeks during the autumn vacations before enacting the latest revisions. It seems rather counterproductive to continuously restrict the rules’ period of applicability in the name of further evaluation and reform, while simultaneously curtailing the appraisal period that allows for stakeholder input.
[i] OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, preamble.
[ii] ErlRV 1175 BlgNR XXVII. GP, p. 1 (Legislative Notes, available in German at https://www.parlament.gv.at/PAKT/VHG/XXVII/I/I_01175/index.shtml).
[iii] Schroll/Kert in Fuchs/Ratz, WK StPO § 209a mn 3.
[iv] ErlRV 1175 BlgNR XXVII. GP, p. 1 (n ii supra).
[v] Id., p. 2.
[vi] Id., p. 3.
[viii] Astrid Ablasser-Neuhuber, 3 Fragen an Astrid Ablasser-Neuhuber, AnwBl 2022/22, p. 14 (available in German at https://rdb.manz.at/document/rdb.tso.LIanwbl20220111?execution=e5s1).