Category: Austria

Schoenherr has advised RegTech start-up 360kompany AG and its shareholders on the sale to Moody’s Corporation.

360kompany AG is a RegTech platform for global business verification and business KYC for AML compliance. According to Schoenherr, 360komany’s clients include “global and international banking groups, FinTechs, Big Four accounting firms, law firms, Banking-as-a-Service and compliance platforms, and multinational corporations. 360kompany AG is headquartered in Vienna, Austria, with offices in London, New York, and Singapore.”

Moody’s is an integrated risk assessment firm providing data, analytical solutions, and insights. 

According to Schoenherr, “the purchase price will be funded with a combination of cash and shares from Moody’s Corporation’s common stock, and the deal value remains confidential. The transaction is subject to the satisfaction of customary closing conditions and expected to close in the first quarter of 2022.”

Schoenherr’s team included Partner Robert Bachner, Attorney Alfred Amann, and Associate Daniel Wadl.

Schoenherr did not reply to our inquiry on the matter.

Schoenherr has advised Uniqa Insurance Group AG on its EUR 375 million green tier two notes and concurrent repurchase of existing subordinated notes in the same principal amount. Freshfields advised dealer managers and joint bookrunners J.P. Morgan Bank AG and Raiffeisen Bank International AG.

According to Schoenherr, “as a result of the tender offer, Uniqa refinanced initial coupons of 6.000% and 6.875% of EUR 375 million existing subordinated notes maturing 2023 and 2026 respectively, through the placement of a new green bond with a significantly lower coupon of 2.375%. The new subordinated notes, which are rated BBB by Standard & Poor’s, are eligible as tier two basic own funds in accordance with regulatory requirements.”

Schoenherr’s team included Partners Ursula Rath, Christoph Moser, and Peter Feyl, Attorney Marco Thorbauer, and Associate Viktoria Stark.

Freshfields’ team included Partner Stephan Pachinger, Counsel Birgit Schulz, and Associate Benedikt Graf.

Dorda has advised Merkur Versicherung on its acquisition of Salzburg-based Nurnberger Verischerung Osterreich (NVO). KPMG Law advised NVO on the deal.

The transaction remains contingent on regulatory approval.

According to Dorda, “in the last 40 years, Salzburg-based NVO has been offering multiple award-winning insurance products in life insurance (especially unit-linked insurance), occupational disability, and long-term care pension insurance. The company employs 123 employees in Austria and the premium volume in 2020 was around EUR 110 million. The location in Salzburg and its employees will be retained as the Merkur Group aims to develop the location into a life insurance specialist hub.”

According to the firm, “Garanta Versicherungs-AG Osterreich, a specialist for individual insurance solutions in the area of motor vehicle, property and liability insurance, will remain as a branch of the Nurnberger Group in Germany, but will become a close cooperation partner of the Merkur Group in the future.”

Dorda’s team included Partners Felix Horlsberger, Christian Ritschka, Heinrich Kuhnert, Andreas Zahradnik, Attorneys Magdalena Nitsche, Alexandra Ciarnau, Elisabeth Reiner, Gunther Posch, Lisa Kulmer, and Patricia Backhausen, and Associates Mike Schaunig, Sarah Pichler, Anna Martseva, Markus Buchleitner, and Alexander Capka.

KPMG Law’s team included Partners Wendelin Ettmayer and Dieter Buchberger, Counsel Stephanie Sauer, Attorney Stephanie Heimel, and Associate Andreas Flaig.

In case you are wondering whether you are allowed to send that bottle of wine to your favourite client or donate to a charity, read below.

Can I send my client a small Christmas gift?

Yes, a modest gift such as a small box of chocolates or a small promotional product will always be ok.

What about a voucher for an all-day skiing trip?

This depends on your client, the value of the voucher and your actual motivation for making such a generous gift. In case your client is a public official, a voucher for an all-day skiing trip would most likely be considered undue. Thus, you will have to make sure that it is not granted (or may be perceived as being granted) in return for a specific official transaction or a specific legal act or with the intention of influencing the public official. Gifts given at the time of a tender or during a dispute could be perceived as being a bribe, no matter how innocent they actually are.

Is there a specific monetary threshold?

No, not according to the law. It will rather be considered whether the gift was in line with local customs, whether it was offered to all clients or just a specific public official and/or if you have received something in return, ie a permit you have been waiting for.

To what extent is there a duty to investigate whether the recipient of the gift is a public official?

If you are sending a Christmas gift to all of your clients, then there is no duty. If you have chosen a specific group, we recommend double checking if one of the recipients is a public official.

No Christmas parties this year. Is it ok to make a donation to a charity instead?

Yes, however you have to make sure that the donation will not be perceived as being granted in exchange for a certain act. Only recently the state prosecutor for economic crimes and corruption “WKStA” indicted several property developers claiming that the donations they made to a charity founded by a public official were in fact bribes to secure building permits and other favours.  Thus, prior to making a donation we recommend assessing the recipient and the actual timing of the donation.

Also, you should bear in mind that you are donating company money and not your own. When donating company money, there is a fine line between the use of discretionary powers to show corporate social responsibility, and breach of trust. When making a donation the management board has to document that its decision was guided by the potential benefit the donation could bring for the shareholders, the employees and the public rather than by personal interests of a board member, ie a personal passion for music or art.

By Klara Kiehl, Counsel, and Katharina Mydza, Associate, Schoenherr

The world is undergoing a digital transformation. Whether at work, play or socialising, it is hard to imagine even a day without the Internet. Recent challenges (eg, the covid-19 pandemic) have further accelerated digitalisation. The world is far from the end of this process. Many businesses, and countries, are increasingly focusing on the digital transformation. Recent examples include cloud computing, cryptocurrency or the “metaverse” which was recently announced by Mark Zuckerberg.

For the analogue world to keep up with the rapidly developing virtual world, an expansion of the technical infrastructure is required. Therefore, it is no wonder that the data centre market is booming. Centrally located countries like Austria are becoming more popular for large international tech companies because of their comparatively low environmental risks, good connections and high standards for data protection and data security. European countries welcome this rapid development because it promises economic growth, new jobs and a faster transition to a digitalised society.

This article provides a short overview of the permitting requirements for the construction of data centres in Austria and the environmental concerns therein.

Permitting requirements of data centres

Prior to the initiation of the permitting procedure itself, the first crucial step when it comes to constructing a data centre is finding:

• a suitable location; and
• an ideal structure in terms of size, components and other technical parameters.

Both the location and the structure can affect the data centre’s eligibility for approval. During the planning phase, project applicants should be sure that the correct zoning is declared in the zoning regulation and the development plan, which depend on the respective municipality. Also, the proximity to nature conservations and other protected areas play an important role in permitting procedures.

Before filing for project approval, an important question that every applicant must ask is whether the construction of a data centre falls under the Environmental Impact Assessment (EIA) regime.¹ Although data centres are not yet listed in the annex of the EIA Act, other aspects and plant components, such as groundwater extraction, clearings or energy supply facilities, may fulfil the criteria. Therefore, it is particularly important to define the project parameters carefully. If the EIA regime applies, the applicant can expect an extensive procedure with detailed document requirements and many interest groups. On the other hand, the EIA regime provides for a one-stop-shop procedure and no further permits will be required.

If the EIA regime is not applicable, it needs to be determined which permits under what (other) material laws on the state and provincial levels must be obtained for the construction and operation of the data centre. According to the principle of accumulation, several permits may have to be obtained from various authorities. Usually, the implementation of a data centre requires the following permits.

Building permit

A building permit for the construction of the data centre must be obtained. Each of the nine Austrian provinces has its own Building Code, which may lead to significant differences in the permitting prerequisites depending on the location of the data centre. Decisive issues may include compliance with the relevant zoning and development plans, as well as the conservation of the local townscape.

Operating licence

The second requirement is usually an operating licence under the Austrian Trade Act. An operating facility is “any locally tied facility for the operation of a business”. A permit is required if the emissions produced by the operating facility can affect neighbours or the environment. In the case of data centres, typical emissions include noise, exhaust air and waste water. To incentivise digitalisation, the Austrian legal system provides for an exemption from the obligation to obtain a permit for operating facilities for electronic data processing (ie, data centres) in which there are no combustion plants or in which combustion engines are kept exclusively for emergency power supply.

However, this exemption does not apply if the data centre falls under the Integrated Pollution Prevention and Control (IPPC)² or Seveso³ regimes. This may be the case if it includes large emergency power generators (which are more than 50 megawatts) and/or large fuel storage facilities (which usually hold more than five tonnes of fuel) for the operation of emergency power generators. Since electricity supply plays a central role in the operation of data centres (power failures must be avoided at all costs), the exemption from an operating licence requirement will usually not apply to large data centres with a correspondingly large emergency power supply. On the contrary, data centres with large emergency combustion plants may be required to fulfil further permitting prerequisites. Depending on the capacity of the installation, the applicability of the IPPC and EIA regimes as well as the Emission Certificate Act (and thus participation in the EU Emission Trading Scheme) must be considered.

Water Act permit

Servers are usually cooled with water. Depending on the particular use, treatment and return of the cooling water in the specific data centre, its implementation will usually require a permit under the Water Act. However, in individual cases this permit may be included in the operating licence under the Trade Act.

In special cases, other permits may also be required for certain measures or plant components of data centres, for instance under:

• the Electrical Engineering Act;
• the Aviation Act;
• the Road Traffic Act; or
• the relevant province’s Nature Conservation Act.

Further procedural challenges

Once the applicable permitting regime is determined, further challenges await. Since many Austrian authorities have only limited experience in permitting large data centres, every permitting procedure requires thorough preparation. To avoid lengthy and expensive additional demands or misunderstandings by the authority and its experts, the filed documentation must comply with all legal and technical requirements applicable in the specific case. Ideally, a flawless filing of documentation can more than make up for the lack of experience from authorities.

In addition, there are usually various interest groups involved in the respective permitting procedures. Although data centres are generally perceived positively in Austria, objections from neighbours or citizens’ initiatives can be expected in many of the necessary procedures. Further, if the environment could be broadly affected, environmental organisations can intervene and even contest the authority’s decisions. To avoid objections, key parties may be informed beforehand about the project, its characteristics and possible concerns.

Good communication with the relevant parties and authorities is crucial after the filing. For example, oral procedures under different laws (eg, the Building Code and the Trade Act) can often be consolidated by coordination between the competent authorities. Objections during the oral procedure can be avoided through continuous contact with the relevant parties (and eventually, minor adaptions to the project).

Comment

While permitting procedures can be needlessly long and in some cases even take years, accurate filing documentation, timely communication measures and perfectly executed procedure(s) may keep their duration in check.

Therefore, while the legal framework has a reputation for being extremely complex and allowing only for slow (and costly) permitting procedures, thorough preparation and coordination can help large data centre projects find their way through the permitting jungle.

Endnotes

¹ The EIA Act is currently undergoing a review. According to information, the EIA requirements for industrial projects on greenfield sites will be even stricter in the future. Whether data centres will also underly the EIA regime in the future remains to be seen.
² See EU Directive 2010/75 of the European Parliament and of the Council of 24 November 2010 on industrial emissions (integrated pollution prevention and control), OJL 334, 12 December 2010, pp 17–119.
³ See EU Directive 2012/18 of the European Parliament and of the Council of 4 July 2012 on the control of major accident hazards involving dangerous substances, OJL 197, 24 July 2012, pp 1–37.

By Christoph Cudlik, Attorney at Law, and Sarah Wolf, Associate, Schoenherr

Schoenherr has advised Sanofi on the acquisition of 100% of the shares in Origimm Biotechnology GmbH. Binder Groesswang and, reportedly, Squire Patton Boggs’ Frankfurt office advised the sellers on the deal.

Sanofi is a global life sciences company. Origimm – Origins of Immunity – is an Austrian biotech company with expertise in the discovery of vaccine antigens and drug targets for the prevention and treatment of diseases and infections associated with skin-colonizing microbes.

Schoenherr’s team included Partners Roman Perner, Michael Woller, and Christoph Haid, Counsels Teresa Waidmann and Stefanie Aichhorn-Woss, Attorneys Michael Marschall and  Marco Thorbauer, and Associates Alexander Pabst, Daniel Komarek, and Daniel Neuwirth-Riedl.

Binder Groesswang’s team included Partners Thomas Schirmer, Ivo Rungg, Clemens Willvonseder, and Johannes Barbist, Counsel Hellmut Buchroithner, and Attorneys Mona Holzgruber and Regina Kroll.

Editor’s note: After this article was published, Binder Groesswang announced that it advised Sanja Selak – founder, co-shareholder, and managing director of Origimm.

House searches have been all over the news in Austria recently. In case you have been wondering what happens to your phone, laptop and tablet when the prosecutor comes knocking – read below.

May I call my family and friends and inform them about the search?

Yes, there are no provisions in the Code of Criminal Procedure that prohibit this, however, the authorities could in some cases be of the opinion that the investigative action might be affected by contacting family and friends. Also note that you have the right to request a trusted person to come to the house search.

May I film officers for evidentiary purposes during a search of my home?

Yes, according to the jurisprudence of the Supreme Court (6 Ob 6/19d), police officers may be filmed during a sovereign operation with coercive force for preventive reasons (in particular because of possible unlawful assaults) and for evidentiary purposes.

Do I have to tell the police my passwords?

This depends on your status. If you are a witness, you have to provide the authorities with all passwords in accordance with your duty to testify. This is not true if you are worried about being implicated in a crime by providing the password and/or you are questioned as an accused: In that case you have the right to remain silent. Thus, you must hand over the respective data carrier but do not have to reveal any passwords.

What happens to my phone, laptop and tablet?

Objects may be seized for evidentiary purposes. In principle, this also includes electronic data carriers such as mobile phones and laptops. Whether the officers may also access them in the course of a house search depends on the respective scope of the search and seizure order; if such an order also includes laptops, notebooks and mobile phones, then the officers are authorised to do so. Wherever technically possible, the search of the carrier should be conducted on the spot, the data within the scope of the search warrant should be copied by the authorities and the data carrier should remain with the accused.

My phone was seized, may I keep my SIM card?

According to case law of the Supreme Court (e.g. 13 Os 96/06a), a SIM card is not a dependent accessory to a seized mobile phone but has its own legal “fate”. In this respect, the person concerned is in principle entitled to keep the SIM card. The situation will be different in cases where there is a suspicion that the SIM card contains data such as contact data (telephone numbers), which also serve evidentiary purposes.

May the prosecutor’s office copy correspondence with my attorney?

No, the Prosecutor’s office is not allowed to do that, unless the attorney itself is under investigation. Attorney’s correspondence is subject to attorney-client privilege, which may not be circumvented by seizure and confiscation of documents or data carriers.

Are officers allowed to automatically monitor my phone during a house search?

No. These are two different coercive measures; each of them must be ordered by the public prosecutor’s office and approved by the court if the legal requirements are met. A court-approved house search therefore does not automatically authorise the officers to monitor telephones.

May officials recover deleted text messages?

Yes, if technically possible, they may.

By Klara Kiehl, Counsel, and Katharina Mydza, Associate, Schoenherr

On September 9, 2021, CEE Legal Matters reported that Ibrahimovic & Co had advised Studen & Co Holding on an agreement with the Brcko District’s Government to build a free business zone in the district. CEE In-House Matters spoke with Natasa Pucar, Corporate Communication Director at Studen & Co Holding, to learn more about the matter.

CEEIHM: To start, tell us a bit about Studen& Co Holding and its operations in BiH.

Pucar: From Vienna as the parent position, through well-established business models, Studen Holding establishes its production and distribution companies in the food industry of B&H and the region. The strategic food industry, which includes the production of sugar and edible oils, is the focus of our activities. Studen Holding has founded the largest agro-industrial complex in B&H and developed companies that show positive economic changes.

As the largest foreign investor in the food industry, we recognize that meeting the food needs of the domestic and export markets is not the only need, so we actively working on a comprehensive investment cycle in the Brcko District. The project entitled “Business Initiative for Comprehensive Improvement of the Business Environment and Living Standards in the Brcko District of B&H” identifies projects that bring investments of more than 500 million BAM. The first project of Studen Holding includes the establishment of the first business zone in Brcko, which is a further topic of this interview.

CEEIHM: What does the agreement with the Brcko District’s Government entail and what were the main driving forces behind this deal from your perspective?

Pucar: The Assembly of the Brcko District of B&H adopted the Decision on Public Property through special agreements in June this year, and that is a precondition for the revitalization of economic and general life in the Brcko District through advocacy for economic development and serious work on the exploitation of economic potentials. We are aware that this is an opportunity for new jobs and also a long-term positive impact on the business environment in Brcko. So, the main driving force is economic growth.

CEEIHM: What were the most complex aspects of this deal from a legal perspective?

Pucar: It is important to point out that the Agreement was signed on the basis of the Special Agreement Decision unanimously adopted by the Brcko District Assembly, which is a precedent in the decision-making process so far, and a clear proof that foreign investments are undoubtedly in the general interest of the community.

Law firm Ibrahimovic & Co successfully negotiated all the elements of the Contract, so the Assembly adopted the proposed method of disposal. By signing the Agreement with the SCO Group, Brcko District and Bosnia and Herzegovina will get a chance for a new development momentum, but also send a message that Bosnia and Herzegovina becomes a new investment location where there are obstacles, but also the will and way to overcome them.

CEEIHM: What was Ibrahimovic& Co’s mandate on the matter?

Pucar: The law firm Ibrahimovic & Co was engaged from business idea to its realization and signing of the Agreement. With long experience in the economy of Brcko and acquisitions in the region, they conducted negotiations and represented our interests in the procedure that lasted throughout the year, but together we reached the desired goal, thanks to a good knowledge of regulations and business climate. With the support of this legal team – we are confident that every challenge is overcome.

CEEIHM: And why did you pick them specifically as your advisor on the deal?

Pucar: Our business and companies are changing rapidly and law firm Ibrahimovic & Co is leading the way in advancing change for our benefit. They provide specific advice required to get a deal done and solve all business challenges. Also, they have different theoretical backgrounds and know legal traditions in West Balkan’s countries with 20 years of experience.

Originally reported by CEE In-House Matters.

Schoenherr has advised the Liechtenstein Group as lead investor in a EUR 40 million financing round for Tesvolt.

The Liechtenstein Group is a group of companies owned by the Princely House of Liechtenstein and is internationally active in agriculture and food, forestry, renewable energy, and real estate. Tesvolt is an energy storage company operating in the commercial and industrial sectors.

According to Schoenherr, “a consortium of investors led by the Liechtenstein Group is providing Tesvolt with EUR 40 million in equity capital. This financing round will enable Tesvolt to accelerate its international activities and consistently drive forward the development of innovative products for energy storage solutions. The investment complements the Liechtenstein Group’s existing renewable energy portfolio.”

Schoenherr’s team was led by Partner Alexander Popp and included Partner Thomas Kulnigg, Counsel Gregor Petric, and Associate Daniel Wadl.

The firm did not respond to our inquiry on the matter.

Herbst Kinsky has advised PhagoMed Biopharma’s shareholders on the sale of the company to BioNTech.

As a result of the transaction, the acquired company has been renamed BioNTech R&D (Austria).

Founded in 2008, BioNTech is a German company specializing in patient-specific immunotherapies. The company’s suite of platforms includes mRNA therapeutics, engineered cell therapies, antibodies, and small molecule immunomodulators.

PhagoMed is an Austrian biotechnology company specializing in the development of a new class of antibacterials.

“Antimicrobial resistance (AMR) remains an urgent global threat and, as a society, we desperately need novel and more precise drugs,” former PhagoMed CEO Alexander Belcredi commented. “We’re proud that we can now continue our fight against AMR as part of BioNTech, for the benefit of millions of patients.”

The Herbst Kinsky team was led by Partner Christoph Wildmoser.

Herbst Kinsky did not respond to our inquiry on the matter.