Market participants in almost every industry need to be prepared to follow the state’s regulations concerning their respective business. Regardless of whether your business is a global food producer, a construction company, or a cab company: your business has to follow the rules of the trade, otherwise there will be consequences.

But what are the consequences of not following the rules of your trade in Austria? Learn more in our three-part series on the importance of regulatory compliance.

Part 1: Fines

A violation of regulatory provisions will primarily result in a fine. These fines typically appear not to be particularly high. The minimum fine (if any) is often set at only a few hundred Euros and maximum penalties are rarely imposed. At first glance a first offender might not face massive financial consequences. However, these fines are typically imposed for every single violation.

Example: an authority might impose a fine not for mislabelling a food product but a fine for mislabelling every item of this product found in any supermarket. Or the fine might not be imposed for not (“generally”) keeping working time records of the company’s employees but impose a fine for every instance these records were not kept for every single employee. In summary, you may not be facing one five hundred euro fine, but several five hundred euro fines many times over.

Also know that in the vast majority of cases the fines will be imposed on the responsible person and not on the company. Persons responsible are generally (all of) the company’s executives or the responsible trade manager, unless the business has structured its operations specifically and validly appointed a responsible person (verantwortlicher Beauftragter). In any case the business will be liable for the payment of the fines (and the costs of the proceedings).

At Sabadello Legal we have extensive experience in defending businesses and managers in proceedings relating to alleged non-compliance with regulatory provisions. Aside from defending our clients in civil and public-law litigation, we have a strong track record in advising our clients on how to set up effective compliance and control systems to prevent transgressions.

Contact and questions:

RA Mag. Andreas Sabadello +43 1 9971037 office@sabadello.legal