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European Union initiates infringement procedure against Austria
In 2019, the European Union enacted a directive on the protection of persons reporting violations of EU law. The directive deals with the reporting of violations against explicitly mentioned areas such as money laundering or corporate taxation offenses. In principle, the member states were obliged to implement a national law for the protection of whistleblowers by 17.12.2021. Austria has not yet implemented this law, which is why the EU Commission has now initiated an infringement procedure against Austria.
16. February 2022
Consumers to be repaid debit interest for deferred loans
In order to provide financial relief to consumers who had become unemployed or were on short-time work as a result of the pandemic, a statutory deferral of loan installments for consumer credit agreements was passed at the beginning of 2020 (cf. Section 2 2nd COVID-19-Justice Accompanying Act). Nevertheless, some banks continued to charge their customers debit interest even during the deferral period. Subsequently, the Association for Consumer Information (Verein für Konsumenteninformation) filed a lawsuit against this practice. This lawsuit has now been upheld by the Austrian Supreme Court (OGH). According to the ruling, there should be no burden on consumers during the deferral period. The banks now have three months to refund the overpaid interest. (3Ob189/21x)
2. February 2022
Amendment of the Covered Bond Act
As of 08.07.2022 and implementing the EU Covered Bonds Directive (EU-CB-Directive), Austria’s new Covered Bond Act (PfandBG) will enter into force. The amendment is intended to increase the attractiveness of the Austrian covered bond market and eliminate distortions of competition within the EU. The regulations on covered bonds currently scattered over various national provisions (HypoBG, PfandbriefG and FBSchVG) will be unified. One of many innovations is the possibility for authorized credit institutions to now issue all forms of covered bonds. (Federal Law Gazette I No. 199/2021)
18. January 2022
No state liability vis-à-vis bank customers
The Austrian Constitutional Court ruled that the Republic of Austria is not liable for damages suffered by customers of an insolvent bank even if these damages were caused by poor supervision by an authority. Around 30 customers of Commerzialbank Mattersburg had filed for damages against the federal government. However, the relevant provision of the law is constitutional. The regulation and supervision of banks are aimed at protecting the functioning of the financial market, not individual investors. (Constitutional Court of 16.12.2021, file G 224/2021 et al.)
7. January 2022
No surrender of the fixed cost subsidy (Fixkostenzuschuss) to the landlord
In a recent decision, the Austrian Supreme Court dealt with the question of whether businesses have to surrender the fixed cost subsidy (Fixkostenzuschuss) to the landlord in the event of a COVID 19-related rent default. The Supreme Court answered in the negative with reference to the purpose of the subsidy. Accordingly, the fixed cost subsidy serves to maintain the solvency and liquidity of affected businesses and not to offset the loss of rent. Furthermore, since the fixed cost subsidy includes an obligation to mitigate damages, the tenant is even obligated to claim rent reductions from the landlord. (3 Ob 184/21m)
22. December 2021