Category: Austria

BPV Huegel has advised Microsoft venture fund M12 and Point72 Ventures on their USD 20 million investment into Blackshark.ai. KPMG Law advised Blackshark. Orrick, Herrington & Sutcliffe reportedly advised M12 as well.

According to BPV Huegel, M12 led the Series A funding round for Blackshark. “Google Earth co-founder Brian McClendon, former Airbus Defense and Space CEO Dirk Hoke, and CEO of Applied Intuition Qasar Younis join as advisors to the board of Blackshark.ai.”

Blackshark.ai is an Austrian startup and, according to BPV Huegel, the creator of a semantic 3D digital twin of the entire Earth.

BPV Huegel’s team included Partners Elke Napokoj, Michaela Pelinka, and Sonja Durager, Attorney Walter Niedermueller, and Associate Daniel Grimmer.

The KPMG Law team included Partner Wendelin Ettmayer, Attorney Pablo Essenther, and Associate Stefan Niederstrasser.

Schoenherr has advised European Rail Rent on its partnership with new co-shareholder Antin Infrastructure Partners. Bird & Bird advised ERR in Germany, while Freshfields Bruckhaus Deringer advised Antin on the deal.

Financial details were not disclosed. Closing is expected by the end of 2021, pending regulatory approval.

ERR is an asset manager for rail freight cars and is currently solely owned by its co-founders Rainer Kunze and Jurgen Bauer. Antin is an independent private equity firm focused on infrastructure investments.

According to Antin, “ERR, with the support of Antin, will invest in an efficient and modern wagon fleet and thus make a meaningful contribution to the decarbonization efforts in Europe. Rail is a safe and sustainable transport solution that uses six times less energy than road transport and has almost nine times lower greenhouse gas emissions. Shifting transport from road to rail thus supports the energy transition, with political support and infrastructure developments driving this trend.”

Schoenherr’s team included Partner Miriam Simsa and Attorneys Michael Stimakovits and Philipp Kalser.

On 2 November 2021 the Austrian Financial Market Authority (FMA) published its long-awaited amended Online Identification Regulation (Online-Identifikationsverordnung, “Online-IDV“). The FMA herewith enables financial service providers subject to the KYC obligations of the Financial Market Anti-Money Laundering Law (Finanzmarkt-Geldwäschegesetz; “FM-GwG“) to use purely biometrical processes for remote identification of new customers. Biometrical identification processes are all procedures for online customer identification where the entire or parts of the online identification are carried out by an automated electronic procedure without the involvement of employees – there is no need for personal contact in the whole remote identification process anymore.

This is expected to make the customer identification process easier and faster as well as to significantly lower the costs compared to the current video identification process which so far required employees (instead of an algorithm) to carry out the identification. Other identification methods (including the video identification process) will remain possible.

Key requirements of the biometrical remote identification process

Pursuant to the amended Online-IDV the following key requirements need to be complied with when making use of the biometrical processes for remote identification:

1. State-of-the-art technology: The most sophisticated biometrical processes for remote identification are required and must be updated regularly. Furthermore, they must achieve a level of security comparable to online identification with involvement of employees (§ 4 (6) no 1 Online-IDV).
2. Documentation: The obligor has to document the whole biometrical process for remote identification properly. This includes in particular keeping records of the results of the checks conducted, including recording the liveness check.
3. (No) Photo copies of ID: Instead of keeping copies of the front and back of a photo ID, obliged parties may also only document and record the electronically signed ID data when checking electronically signed photo IDs (§ 4 (6) no 3 Online-IDV). However, for the time being it is advisable to in addition keep electronic copies of the front and back of the relevant ID document.
4. Liveness check: This is the key requirement of the new biometrical ID process. It is crucial that only a real person actively participates in the online ID process, thus not only a video (or similar historic recording) is used during the biometrical online ID process. The FMA does not detail the procedure of the liveness-check and required security features; obliged parties need to implement state-of-the-art security measures appropriate to their ID process (the FMA therefore regulates the process in a technology-neutral manner). The FMA suggests that the liveness check can, for instance, involve the person being identified reading out a sequence of characters or words specified during the ID process, having to repeatedly track an area randomly selected on the screen by means of head movements, or moving the head in different directions after being asked to do so. Regardless, a video recording (including audio) of the whole biometrical remote identification process needs to be made and stored (§ 4 (6) no 4 Online-IDV).
5. Electronic security chip (NFC-chip) / electronically signed photo IDs: For the biometrical remote identification process only photo IDs which are electronically signed by the issuing authority can be used. The obliged party has to verify the authenticity of the electronic signature/certificate and the integrity of the data (§ 4 (6) no 5 Online-IDV). This requires the reading of the electronic security chip (NFC-chip), e.g. via the NFC reader of a mobile phone. This requirement was criticised by certain market participants. During a transition period ending on 31 December 2022, the FMA will permit the use of IDs without electronic signature/certificate of an authority (and without reading the NFC-chip); in such case the ID needs to be checked visually (and a copy needs to be stored) (§ 9 (2) Online-IDV).
6. Customer consent: The customer has to agree to the biometrical identification in accordance with the GDPR (Regulation (EU) 2016/679).

Implementation of NFC technology and related difficulties

One of the most discussed issues in connection with the new fully-automated biometrical remote identification process is the requirement to verify the electronic signature/certificate of an ID document by reading the ID’s NFC-chip. While e.g. Austrian passports have been equipped with an electronic NFC-chip since approx. 2007, other Austrian IDs or many foreign IDs (including in particular foreign passports of CEE/SEE countries outside the EU) are not equipped with such a NFC-chip (or have only included this feature very recently – thus many active and valid IDs (other than Austrian passports) lack an NFC chip). Furthermore not all smartphone models are technically capable of reading NFC chips. The requirement to read the NFC-chip (which applies from 1 January 2023) could thus lead to a situation where a large group of persons will not be able to make use of the biometrical identification process. To read the NFC chip with a smartphone it will generally be necessary to install a separate application which makes the customer onboarding process more complicated and lowers consumer-friendliness. Some market participants questioned whether the implementation of NFC technology in fact makes the identification process more secure.

The FMA is addressing these concerns with a transitional period and has decided not to require the use of the NFC technology in the biometrical identification process before 1 January 2023. It remains to be seen how the situation will develop, especially in technical terms.

Conclusion of the amendment to the Online Identification Regulation

The use of biometrical identification is becoming increasingly important during digital transformation and can support traditional financial institutions as well as FinTechs to implement an even easier, faster but equally secure customer onboarding process. The new amended Online-IDV of the FMA now brings this new identification process to Austria too. It can help strengthen the international competitiveness of Austrian financial service providers and the Austrian financial market, also considering that many other countries have not introduced such a biometrical identification processes yet. Therefore the introduction of the purely biometrical identification processes can be a game changer to Austrian customer identification/KYC procedures.

By Matthias Pressler, Counsel, Schoenherr

Cerha Hempel has advised Energy Exchange Austria and its cooperation with CCP Austria on the restructuring of the clearing of spot market trading in electric power products on the Vienna Stock Exchange and on the transfer of the central counterparty function from EXAA to CCP Austria.

CCP Austria is the central counterparty clearing house of Austria and is responsible for the clearing and risk management of all CCP-eligible transactions on the Vienna Stock Exchange.

According to the firm, “considerable adjustments [were] required as a result of changes to the settlement structure in the Austrian electricity trading spot market. The framework conditions for clearing as well as the settlement tasks and functions of the central counterparty were reviewed and revised both with regard to ordinary energy spot market products and with regard to the exchange of energy based on the uniform day-ahead market coupling.”

Cerha Hempel’s team was led by Partner Peter Knobl.

PHH, working with Freshfields Bruckhaus Deringer, has advised the shareholders of life sciences company Szabo-Scandic Handelsgmbh on its sale to the Nordic BioSite Group. Wolf Theiss and White & Case advised Nordic BioSite on the deal.

According to PHH, “Szabo-Scandic will remain an independent company in Austria, but will benefit from synergies with its international network.”

The PHH team included Partners Rainer Kaspar, Stefanie Werinos-Sydow, and Nicolaus Mels-Colloredo, Counsel Daniela Olbrich, Attorneys Matthias Fucik, Veronika Boehm, Leopold Opferkuch, and Michael Kutis, and Associate Dominic Zehetgruber.

Freshfields’ team included Partner Konrad Groeller and Associates Maria Trumpel and Mattias Koeck.

PHH has advised German digital transformation company Sidion on its acquisition of a 65% stake in the Austrian-based Hillside IT consulting group.

Hillside is an Austrian IT company offering enterprise service management, IT service management, information security management, IT controlling, and business integration platform services.

“The successful completion of a transaction between two companies focused on joint growth is particularly gratifying – we wish [them] every success!” PHH Partner Rainer Kaspar commented.

The PHH team was led by Partner Rainer Kaspar and Counsel Philip Rosenauer.

The firm did not reply to our inquiry on the deal.

Cerha Hempel has advised Abrdn on the acquisition of a residential project in Vienna from the Innsbruck-based project consortium Moser Immobilien and Bauwerk Immobilien. Grama Schwaighofer Vondrak advised the sellers.

Abrdn, formerly Aberdeen Standard Investments, is an active asset manager. Its investment arm manages assets valued at EUR 519.2 billion.

According to Cerha Hempel, “the development in Vienna’s 15th district was acquired for [Abrdn’s] Luxembourg-based Aberdeen Standard Pan European Residential Fund. A residential building complex with a total living space of 19,766 square meters – divided into 311 residential units – as well as 198 underground parking spaces and approximately 850 square meters of storage space for the tenants will be constructed on the 7,816 square-meter project site, making it one of the largest projects in the fund’s portfolio. The project is scheduled for completion in the spring of 2024.”

Cerha Hepel’s team included Partners Mark Krenn and Heinrich Foglar-Deinhardstein and Senior Associates Jakob Hartig, Marko Vladic, and Angelika Schussler-Datler.

Grama Schwaighofer Vondrak’s team included Partners Georg Zacherl and Andreas Schwaighofer.

Gas is of particular economic importance for Austria. In addition to production, infrastructure (including the Baumgarten gas hub), transportation, trade, and supply-secure coverage of gas demand play a major role. Yearly demand of roughly 80 to 90 terawatt-hours, constant over the last ten years, is generated by the manufacturing and energy sectors, non-energy consumption, agriculture, private households, power plants as conversion applications, transport, and the service sector. With a share of about 15%, gas also plays an important role in Austria’s electricity generation, primarily by providing flexible capacities that can be utilized at short notice to stabilize the power grid.

Due to its geographical location, Austria is a transit country for gas, and due to its relatively low domestic production (approximately 11% of domestic consumption), it is heavily dependent on imports.

The 2020 Coordinated Network Development Plan (KNEP) for the gas transmission infrastructure in Austria for 2021 – 2030 was approved by the regulatory authority on March 24, 2021. When preparing the KNEP, coherence with the European Ten-Year Network Development Plan 2020 (TYNDP) must be considered.

Infrastructure Standard

According to the KNEP, the infrastructure standard for Austria in the Market Area East, determined using a standardized method, is currently 140%, significantly above the target of 100% (according to Art 5 Regulation (EU) 2017/1938 concerning measures to safeguard the security of gas supply). Nevertheless, especially when international dependencies are considered, situations may arise where full gas supply can only be ensured by expanding capacities.

Cross-Border Projects

Some of the projects included in the KNEP are cross-border projects which were reported within the framework of the European TYNDP and have Project of Common Interest (PCI) status. PCIs are important, mainly cross-border infrastructure projects (gas, electricity, oil, SmartGrid) in the European Union with the aim to make affordable, safer, and sustainable energy available to all citizens in line with the Paris climate change tar-gets. These projects are eligible to receive public funds. The 4th PCI list includes only the Gas Connect Austria GmbH (TSO) project 2015/08 at the Murfeld entry/exit point, already approved to continue without any changes. In the past ten years, more than 90% of Slovenia’s domestic consumption and exports to Croatia were supplied via the Murfeld/Cersak cross-border transfer point. The project serves to cover the additional notified demand at the Murfeld entry/exit point.

A new GCA 2020/01 Czech-Austrian-Interconnector (CZATi) project for additional capacities was submitted. This project is required to support the North-South corridor, reduce market isolation, increase the security of supply for the Czech Republic and Austria, and provide transport routes for alternative gas sources. The planned investment costs amount to EUR 114 million. The implementation period was estimated at four-and-a-half years.

Regarding the economic efficiency of the investments included in the KNEP, it should be noted that the costs associated with the implementation of approved measures are included in the cost basis for setting the system charges pursuant to 69 GWG 2011, which is determined periodically by the regulatory authority. A final assessment of the reasonable costs associated with the implementation of measures envisaged in the network development plan will be made by the authority after the investment in the course of the cost determination.

Hydrogen

In the Hydrogen Map project, a vision for a possible dedicated hydrogen transmission network is being developed, in cooperation between the transmission system operators Gas Connect Austria and Trans Austria Gasleitung and the market area manager AGGM, based on the existing transmission network. The object of the study is to divide the existing gas network into separate networks for methane and hydrogen, in the case of a correspondingly changing capacity demand over time. Modifications will be necessary when gas pipelines are converted to pure hydrogen pipelines. The basic idea behind the development of a hydrogen pipeline network is to establish a hydrogen supply infrastructure that is as cost-effective as possible while continuing to operate an existing methane infrastructure in parallel.

By Bernd Rajal, Partner, and Arian Paul Farahmand, Associate, Schoenherr

This Article was originally published in Issue 8.8 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Brandl Talos has advised TriLite Technologies on its EUR 8 million Series A financing round.

The participants in the financing round included, amongst others, APEX Ventures, B&C Innovation Investments, Hermann Hauser Investment, TEC Ventures, and QC·Ventures.

TriLite develops ultra-compact projection displays for consumer augmented reality and mixed reality applications, such as augmented reality / mixed reality eyewear, as well as the corresponding software solutions.

The Brandl Talos team included partner Roman Rericha, Attorney Adrian Zuschmann, and Associate Elena Ciresa.

Brandl Talos did not reply to our inquiry on the matter.

Hengeler Mueller is advising Austria’s Greiner on obtaining the European Commission’s merger control approval in relation to its conditional voluntary public takeover offer to acquire a majority of Recticel shares, which was officially announced on October 06, 2021.

According to Hengeler Mueller, Greiner “had agreed to acquire Compagnie du Bois Sauvage’s entire stake of 27.03% in Recticel at a price of EUR 13.50 per share,” in May this year. Following the recent announcement, October 14, 2021 marked “the beginning of the initial acceptance period for Austrian Greiner AG’s conditional voluntary takeover offer for Belgian Recticel.” Greiner’s offer values Recticel at close to EUR 1.2 billion enterprise value. 

According to the Greiner announcement, the offer “is subject inter alia to a 50% acceptance condition (including the Compagnie du Bois Sauvage stake to be acquired by Greiner) and to the obtaining of regulatory Phase I approvals from competent merger control authorities in the European Union and other relevant jurisdictions. To date, Greiner has already received competition authority approvals in Serbia and Turkey and has submitted its filing in Morocco.”

Family-owned company Greiner is a plastics and foam solutions supplier active in 34 countries. Recticel is an international industrial supplier of engineered foams, thermal insulation, and bedding products. The two companies were previously involved in the Eurofoam joint venture, founded in 1992, which Greiner fully acquired last year (as reported by CEE Legal Matters on April 14, 2020).

The Hengeler Mueller team is being led by Brussels-based Partner Markus Roehrig.