The "EU Directive on Corporate Sustainability Due Diligence" (also known as the Corporate Sustainability Due Diligence Directive, CSDDD, EU Supply Chain Directive or EU Supply Chain Act) sets out human rights and environmental due diligence obligations as well as requirements for a climate plan. Its aim is to ensure that companies in the EU fulfil certain due diligence obligations in order to prevent negative impacts of their business activities on human rights and the environment in their supply and value chains within and outside Europe. The directive must be transposed into national law by the EU member states by 26 July 2026. New obligations under the EU Supply Chain Act The directive stipulates that companies within the scope of application must in future identify risks in their own business area and with regard to their subsidiaries and business partners, take preventive and corrective measures and report on them. Companies must pay attention to both the upstream and downstream chain (e.g. transport to the end customer). Companies must monitor and optimise their own activities and those of any of their direct and indirect business partners with regard to issues such as child labour, exploitation of workers, safe working conditions, loss of biodiversity and environmental pollution. Affected companies - large and small Companies with more than 1,000 employees and a worldwide net annual turnover of 450 million euros are covered by the scope of the directive. Companies from third countries may also be affected. What about the EU Supply Chain Act and SMEs? Small and medium-sized enterprises (SMEs) do not fall directly within the scope of the directive. Nevertheless, they should familiarise themselves with the EU Supply Chain Act in good time. This is because the companies concerned will pass on their due diligence obligations to their contractual partners if these are part of their upstream or downstream "chains of activity" - without the threshold values mentioned being relevant! This is because large companies will require their suppliers (often SMEs) to comply with human rights and environmental standards in order to act in accordance with the law themselves. This could mean that SMEs will have to fulfil new due diligence obligations in order to maintain their business relationships. The "chain of activity" refers to all activities in the upstream supply chain, the company's own business area and in the downstream supply chain - insofar as they are involved in the distribution, transport and storage of products. What obligations will be passed on to affected SMEs? SMEs will be required to carry out risk assessments: They must ensure that their suppliers do not commit human rights violations or breach environmental standards. SMEs need to take corrective action: If problems are identified in their supply chain, SMEs may need to take corrective action. SMEs have a reporting obligation: Many large companies will require reporting on the fulfilment of due diligence obligations in the supply chain. Challenges - Supply Chain Act and SMEs SMEs may need to introduce systems to monitor and report on their supply chains, which requires additional resources. Compliance with due diligence obligations can be associated with additional costs, e.g. for the adaptation of contracts, supplier assessments or training. SMEs need to better understand and manage risks in their supply chains, which is particularly challenging in complex, global supply chains (risk management). Accompanying measures The Supply Chain Directive provides for various measures to support SMEs in fulfilling the new requirements. The form in which Austria will organise this will be determined as part of the transposition of the EU Supply Chain Act into national law. Parliament has until 26 July 2026 to do so. Specifically, the Supply Chain Directive sets out the following requirements for member states to "protect" SMEs, which seem rather abstract and unrealistic and can probably be characterised as a further outgrowth of Brussels bureaucracy: To support SMEs, the Member States, with the help of the Commission, should set up user-friendly websites, portals or platforms to provide information and assistance. They can also support SMEs financially and help with capacity building. This support can also be made available to economic operators in third countries. Companies are encouraged to support SMEs in the fulfilment of due diligence obligations and to apply fair and proportionate requirements. Obligated companies should offer SMEs that are their business partners targeted support, such as access to training or modernisation, and provide financial assistance where necessary. This can take the form of direct financing, low-interest loans or guarantees to prevent SMEs from becoming insolvent. Contractual conditions with SMEs must be fair and non-discriminatory. The company should assess whether contractual assurances from SMEs are accompanied by suitable measures. The company bears the costs of audits by independent third parties. The SME can make the results of such reviews available to other companies. Step-by-step application In 2027 (three years after entry into force), the directive will apply to companies with more than 5,000 employees and more than 1.5 billion euros in turnover; in 2028 (four years after entry into force), the thresholds will be reduced to 3,000 employees and more than 900 million euros in turnover; in 2029 (five years after entry into force), companies with more than 1,000 employees and more than 450 million euros in turnover will be covered in the final step. Securing a competitive advantage for SMEs Initially, the EU Supply Chain Act means additional difficulties for small and medium-sized companies. However, SMEs that take measures to comply with human rights and environmental standards at an early stage can use the new regulations as a competitive advantage, as many large companies prefer to work with compliant suppliers. It can also strengthen consumer confidence. Seek advice in good time to ensure that your company is supply chain fit. Lawyer commercial law Dr Simon Harald Baier LL.M. advises on matters of business law, commercial law and European law.

The European Commission launched the Single European Sky (SES) initiative in 1999 to improve efficiency in air traffic management and air navigation services through greater integration of European airspace. The last significant legislative initiative under SES, SES 2, was completed in 2009. In 2013, a further update, SES 2+, followed, but this was not implemented. In September 2020, the Commission presented a revised version of the 2013 proposal, which led to intensive negotiations between the Commission, Council (and the Member States behind it) and European Parliament. These ended on 6 March 2024 with a provisional agreement (trilogue), which now forms the basis for the further legislative process. Objectives of the Single European Sky (SES) reform The aim of the reform is to increase the performance and capacity of the airspace, reduce costs and increase the adaptability of the system, while at the same time reducing the environmental impact of aviation. The central focus is on strengthening safety, meeting capacity requirements and reducing CO₂ emissions while maintaining cost efficiency. Key points of the Council position Member State sovereignty: The new regulation maintains the Member States' sovereignty over their airspace and excludes military operations. Monitoring of air navigation services: Each Member State appoints a national supervisory authority to monitor service providers' compliance with requirements, e.g. financial sustainability and organizational structures. Air navigation services may be provided within the same organization as the supervisory authority, provided that they are functionally separate. Member States may combine economic and safety monitoring in a single administrative authority in order to reduce bureaucracy. Opening up air navigation services to competition: On a voluntary basis, Member States may open up certain services, such as approach or airport control services, to market conditions. Performance review: The performance review of air navigation services is carried out in cooperation between the national supervisory authorities and the European Commission. The Commission is supported by an independent Performance Review Board (PRB), which acts as a permanent advisory body and is financed from the EU budget. Climate action: Measures have been proposed to improve the carbon footprint of aviation, including a possible mandatory modulation of en route charges to encourage airlines to use more environmentally friendly routes or implement alternative propulsion technologies. A feasibility study will assess the efficiency and impact of this modulation. Network management: the role of the network manager Eurocontrol will be strengthened by giving it additional, clearly defined tasks. The aim is to use airspace more sustainably and efficiently, while involving member states in strategic decisions. Next steps The Council's position will now be sent to the European Parliament. As the text fully reflects the compromise reached on 6 March 2024 between the Council, the Commission and the European Parliament, the Parliament is expected to accept the Council position without amendments. The new rules are due to enter into force 20 days after publication in the EU Official Journal. Lawyer avaition law Dr. Simon Harald Baier LL.M. advises on matters of Austrian and European aviation law , including the EASA Basic Regulation and SES2+.

In May 2023, the EU published the new General Product Safety Regulation (GPSR) 2023/988 in the Official Journal of the European Union. After an 18-month transition period, the regulation will replace Directive 2001/95/EC from 13 December 2024 and come into force directly in all EU member states.   The EU Product Safety Regulation aims to ensure that only safe products continue to be placed on the market in the EU. Due to increasing digitalisation and growing online trade, additional requirements have been introduced compared to Directive 2001/95/EC. Scope of validity of the EU Product Safety Regulation The regulation applies to all products that are placed or made available on the market in the EU, unless specific EU regulations such as CE directives govern product safety. Medicinal products, foodstuffs and animal feed, live plants and animals, plant protection products, means of transport and aircraft as well as antiques are excluded.   Extension of the personal scope of application Fulfilment service providers and providers of online marketplaces have been newly included in the regulation as economic operators. These actors have specific obligations, such as ensuring the traceability and safety of products.   Evaluation of product safety Article 6 of the EU product Safety Regulation sets out new criteria for the safety assessment of products, including product characteristics, interactions with other products, the presentation of the product, cybersecurity features and predictive functions.   New obligations for manufacturers Manufacturers must now carry out a risk analysis for each product and draw up technical documentation that must be kept for at least ten years. These obligations supplement the requirements already contained in Directive 2001/95/EC.   Significant change to a product The term "substantial modification" has been included in the regulation. Any person who modifies a product in such a way that it affects product safety is now considered a manufacturer. Such changes can be of a physical or digital nature and must be covered by a new risk assessment.   Traceability systems For certain products that pose a serious risk to health and safety, the Commission may introduce a traceability system. This system requires the collection and storage of data to identify the product and the actors involved in the supply chain.   Obligations in distance selling Economic operators offering products online must ensure that their offers contain certain information, such as the name of the manufacturer, its contact information and warnings and safety information in a language easily understood by consumers.   Notification of accidents Manufacturers are obliged to immediately report accidents caused by their products to the competent authorities via the Safety Business Gateway. Importers and distributors must inform the manufacturer if they become aware of an accident caused by a product they have supplied.   Obligations of online marketplaces Providers of online marketplaces must register with the Safety Gate portal and ensure that internal product safety procedures are in place. In the event of a recall, all affected consumers must be notified and personal data may be used for recalls and safety alerts.   Remedial measures for product safety recalls In the event of a recall, economic operators must offer consumers an effective, free and timely remedy, including repair, replacement or refund of the purchase price.   Regulation 2023/988 significantly expands the requirements for product safety and specifically addresses the challenges of the digital age and online trade in order to further ensure the protection of consumers in the EU. Lawyer for commercial law Find out about the legal provisions in good time! Lawyer Dr Simon Harald Baier will be happy to advise you on questions of product safety and the specific requirements of the GPSR.

On 12 January 2023, the EU Regulation on foreign subsidies distorting the internal market (Regulation (EU) 2022/2560, ‘Foreign Subsidies Regulation’, ‘FSR’) entered into force. The aim of this regulation is to close existing loopholes in EU rules on competition, trade and public procurement with regard to foreign subsidies that could distort the European single market and thus create a level playing field. The regulation will have a significant impact on investments and economic activities in the EU. Among other things, it introduces additional reporting obligations for mergers and public tenders if companies have received a certain amount of financial support from non-EU countries. Subsidies from non-EU countries must be scrutinised under the FSR These regulations are also relevant for European companies if they have received financial support from non-EU countries. Enforcement and surcharge bans apply, and non-compliance can result in high fines of up to 10% of the group's global annual turnover. In addition, the European Commission has the option of subsequently unbundling completed mergers, even if they have not exceeded the notification thresholds. Definition of ‘third country subsidy’ A ‘third country subsidy’ within the meaning of the Regulation must fulfil four criteria. It must: - be a financial contribution, - be granted directly or indirectly by a third country, - confer a benefit on a company operating in the internal market and - be limited to a single company, a specific economic sector or several companies or economic sectors. What can the Commission do under the EU foreign subsidies regulation? The Regulation introduces three new instruments for the European Commission: 1. an additional merger control regime that provides for a notification obligation for mergers where the turnover in the EU of one of the undertakings concerned, the target undertaking or the joint venture is at least €500 million and the sum of financial contributions from third countries for all undertakings concerned exceeds €50 million in the three calendar years preceding the notification. The Commission may prohibit a merger if a third-country subsidy distorts the internal market.    2. tenders in public procurement procedures must be notified if the estimated contract value is at least 250 million euros and the bidder has received total financial contributions of at least 4 million euros per third country in the last three calendar years. The award may be refused if third country subsidies distort or threaten to distort the award procedure.    3. Irrespective of thresholds and notification obligations, the Commission can initiate ex officio investigations and take remedial action against third-country subsidies that distort the internal market. This includes, among other things, the subsequent unbundling of a merger that has already been implemented, even if there was no obligation to notify. The Commission can also require ad hoc notifications of mergers and participations in public procurement procedures that do not reach the thresholds. The Commission examines whether a foreign subsidy distorts the internal market. This is the case if the subsidy is likely to strengthen the competitive position of a company in the internal market and thereby actually or potentially affect competition. The regulation contains a non-exhaustive list of criteria for this assessment, such as the amount, type and purpose of the subsidy. It also defines categories of third-country subsidies that are particularly likely to distort the internal market, such as subsidies for ailing companies or those that directly facilitate a merger. If the Commission comes to the conclusion that there is a distortion, it carries out a balancing exercise. In doing so, the negative effects are weighed against the positive effects of the subsidy on the development of the subsidised economic activity or other relevant objectives, in particular of the EU. Lawyer European law Dr Simon Harald Baier LL.M. advises on questions of international trade law  and European law .

In May 2023, the EU published the new Regulation 2023/988 on general product safety (GPSR), which will come into force after a transitional period from 13 December 2024 and replace the previous Directive 2001/95/EC. The GPSR aims to ensure that only safe products are sold in the EU and contains extended requirements, particularly for online trading. However, not all provisions of the GPSR apply to cosmetic products, as they are already subject to the Cosmetics Regulation (Cosmetics Regulation), which sets out specific safety requirements. The GPSR is therefore only relevant in areas that are not regulated by the Cosmetics Regulation. Scope of the GPSR for cosmetics The GPSR supplements the Cosmetics Regulation with regard to online sales and distance selling, in particular through Article 19, which sets out additional information requirements for distance sales. According to the GPSR, "economic operators" - manufacturers, authorised representatives, importers, distributors or fulfilment service providers - are responsible for complying with Article 19. However, the "responsible person" (RP) named in the Cosmetics Regulation, who ensures compliance with the cosmetics regulations, cannot - litterally interpreted - be directly bound by Article 19 of the GPSR, as they do not usually place products on the market themselves - since this is a prerequisite for the application of Article 19. Obligations under Article 19 GPSR If an economic operator offers cosmetic products online or at a distance, certain information must be provided clearly and visibly. This includes: - Name, trade mark, postal address and electronic address of the manufacturer - If the manufacturer is based outside the EU, the contact details of the "responsible person" must be provided. - Product identification data, including an image of the product and its characteristics. - Warnings or safety information in the language of the respective member state. The electronic address here means either an e-mail address or a website address. In the original German version of the GPSR, only an e-mail address was required; however, this was subsequently changed to provide flexibility. Article 19 (d) of the Cosmetics Regulation requires the labelling of " special precautionary information"; these are listed in Annexes III to VI of the Cosmetics Regulation; in addition, further safety instructions and warnings recommended by the product safety assessor in accordance with Annex I Part B.2 of the Cosmetics Regulation may be printed on the label under the responsibility of the responsible person under the Cosmetics Regulation. The above-mentioned information components must correspond to the information required in Article 19(1)(d) of the GPSR. This information serves the purpose of transparency and safety in online trading and is intended to ensure that the consumer receives the necessary information to assess the safety of a product. The role of the "responsible person" - under the Cosmetics Regulation and the GPSR The Cosmetics Regulation stipulates that for imported cosmetic products, each importer is the "responsible person" for the specific products he places on the market; the importer may, by written mandate, designate a person established within the EU as the responsible person who accepts the mandate in writing. "Responsible person" within the meaning of Article 19 of the GPSR is "the responsible person within the meaning of Article 16(1) of the GPSR or Article 4(1) of Regulation (EU) 2019/1020" (Market Surveillance Regulation) - it is therefore not clear whether the responsible person within the meaning of the Cosmetics Regulation and the responsible person under the GPSR are identical. The Market Surveillance Regulation stipulates that an importer or an authorised representative appointed by the manufacturer assumes these tasks within the scope of product safety. However, there is reason to interpret these rules that additional responsibilities that go beyond the requirements of the Cosmetics Regulation are assumed by these economic operators and not by the "responsible person" according to the Cosmetics Regulation. This view is also supported by the Commission's guidelines for economic operators and market surveillance authorities on the practical implementation of Article 4 of the Market Surveillance Regulation. Therefore, if the economic operator selling cosmetic products online is not a "responsible person" under the Cosmetics Regulation (e.g. if the economic operator is an importer and has designated a responsible person), the existing obligations of the "designated responsible person" designated under the Cosmetics Regulation and those new obligations of the economic operator regarding compliance with Article 19 of the GPSR will partially overlap. As the designated responsible person under the Cosmetics Regulation is already responsible for providing the required information and keeping it up to date, the importer should be responsible for ensuring that the information is provided/displayed at the point of sale. According to the above, the importer (economic operator) or an authorised representative would then have to be specified as the "responsible person" within the meaning of Article 19 of the GPSR, and consequently their electronic address would also have to be specified (and not that of the responsible person within the meaning of the Cosmetics Regulation). To add to the general confusion, two responsible persons would then have to be named - but this can be avoided by reaching an agreement with the designated responsible person that they themselves also assume the duties as authorised representative within the meaning of the Market Surveillance Regulation (and thus the GPSR); in practice, these should not be far apart anyway. Conclusion There are good arguments that the new GPSR does not introduce additional obligations for the designated "responsible person" under the Cosmetics Regulation. The obligations under the GPSR primarily affect economic operators such as importers and distributors who offer cosmetic products online or via distance selling. In order to avoid misunderstandings, clear agreements should be made between importers and designated "responsible persons" to ensure compliance with the provisions of both the Cosmetics Regulation and the GPSR. These contractual agreements help to minimise legal risks and ensure compliance with the new product safety requirements. Lawyer cosmetics law Dr Simon Harald Baier LL.M. advises on cosmetics law, customs law issues and all questions of international trade law. Disclaimer This article is intended only to provide general information and does not constitute specific legal advice. The content provided here has been researched to the best of our knowledge and belief, but it cannot replace individual advice from a qualified lawyer. Since the legal situation can change continuously, it is important to seek legal advice in the event of specific concerns. Only personal advice can take the specifics of your case into account appropriately.

On May 11, 2023, the European Court of Justice (ECJ) issued its judgment in Joined Cases C-156/22 to C-158/22, TAP Portugal v. flightright GmbH and Myflyright GmbH, on the interpretation of the European Air Passenger Rights Regulation (Regulation 261/2004) on the right of passengers to compensation following the cancellation of a flight due to the unexpected death of the co-pilot of the aircraft shortly before the flight's scheduled departure. Right away: The recent ECJ judgment in aviation is another decision to the disadvantage of the airlines On July 17, 2019, TAP was scheduled to operate a flight from Stuttgart to Lisbon, which was scheduled to depart at 6:05 am. However, at 4:15 a.m. the same day, the co-pilot who was to operate the flight was found dead in his hotel bed. Under the shock of this event, the entire crew declared themselves unfit to fly, and with no replacement personnel available outside the TAP base, the flight was canceled at 6:05 a.m. The flight was cancelled. As a result, a replacement crew left Lisbon at 11:25 a.m. for Stuttgart, arriving at 3:20 p.m. The passengers were then transported to Lisbon on a replacement flight scheduled for 16:40. According to Article 5(3) of Regulation 261/2004, an operating air carrier is not obliged to pay compensation if it can prove that the cancellation was due to extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken. Relying on this provision, the airline refused to pay flightright and Myflyright the compensation provided for in Regulation 261/2004. The proceedings continued and the appeals court decided to refer to the ECJ the question whether Art 5(3) of Regulation 261/2004 should be interpreted as meaning that an extraordinary circumstance exists when a flight from an airport outside the base of the operating air carrier is cancelled because a crew member (here: the co-pilot) deployed on that flight, who had passed the required regular medical examinations without any restrictions, suddenly and unforeseeably for the air carrier dies shortly before departure or falls so seriously ill that the flight could not be operated . The ECJ now answered this question as follows: Where, as in this recent ECJ judgment in aviation, the absence occurring shortly before departure is due to the unexpected death of a crew member indispensable to the operation of a flight, this situation, however tragic and final, is no different in legal terms from that of a flight that cannot be operated because a crew member unexpectedly falls ill shortly before departure. Thus, the absence of one or more crew members due to illness or death, as such, even if unexpected, and not the exact medical cause of that absence, is an occurrence that is part of the normal exercise of the air carrier's activities, so that the air carrier must anticipate such unforeseen events when planning the missions and work schedules of its employees . There was no extraordinary circumstance . The fact that such an unexpected absence occurred even though the crew member concerned had passed the regular medical examinations required by the applicable regulation without any restrictions did not change this. Any person, even if he or she has successfully passed regular medical examinations, may unexpectedly fall ill or die at any time, the court ruled. Lawyer aviation law at Law Dr. Simon Harald Baier LL.M. advises on all questions of aviation law and represents airlines in the defense of air passenger claims .

The protection and enforcement of intellectual property rights are critical to European competitiveness. The EU-Korea Free Trade Agreement (FTA) contains a separate chapter on intellectual property with provisions on copyrights, trademarks, geographical indications, designs, and patents . This chapter also includes an extensive section on IPR enforcement . Overview - IP rights protection through the EU-Korea FTA: 1. Copyrights Under the FTA, the term of copyright protection should generally not fall below the life of the author and should not continue for 70 years thereafter. Rights holders are also to receive appropriate remuneration for the use of their music or other artistic works more easily than before. Also covered is legal protection for technical processes used to protect copyrights - the FTA provides legal protection against circumvention of effective technical measures. 2. Trademarks The FTA provides that the EU and Korea will each provide a trademark registration system whereby the grounds for refusal of a trademark registration will be communicated in writing and may be transmitted electronically to the applicant; the applicant will be given the opportunity to appeal the refusal and to challenge a final refusal in court . The EU and Korea also create the possibility for interested parties to file oppositions against trademark applications. 3. Geographical indications A separate annex to the FTA lists the geographical indications protected by the agreement in each of the EU and Korea. The scope of protection covers agricultural products including foodstuffs and wines including aromatized wines and spirits . These geographical indications are protected against : (a) the use of any means in the name or presentation of a product that indicates or suggests, in a manner that misleads the public as to the geographical origin of the product, that the product in question originates in a geographical area other than the true place of origin, (b) the use of a geographical indication that identifies a good with a similar good that does not originate in the place indicated in the geographical indication in question, even if the true origin of the goods is indicated, or the geographical indication is used as a translation or transcription, or accompanied by expressions such as "kind", "type", "style", "imitation" or the like; or (c) any other use that constitutes an unfair act of competition . Austria has protected the following indications: Tiroler Speck Schinken Steirischer Kren Jägertee/Jagertee/Jagatee Inländerrum Korn/Kornbrand Under the FTA, a party's trademark that was applied for, registered, or established through use prior to the application for protection of the geographical indication may be used notwithstanding the protection of the geographical indication. However, if a trademark is applied for after a geographical indication for similar goods has already been applied for, the registration shall be refused or cancelled. 4. Designs and models (registered designs) Designs have recently become an economically important intellectual property right. According to the FTA, the term of protection of registered designs shall be at least 15 years . Unregistered appearances are now also protected to the extent that the challenged use is based on imitating the unregistered appearance of the corresponding product. Such use is to extend to the display, importation or exportation of goods. The term of protection for the unregistered exterior shall be at least 3 years. 5. Patents Special provisions for medicinal and plant protection products The FTA provides for the extension of the term of protection at the request of the patent holder, in order to compensate the patent holder for the reduction of the effective term of protection in the event of an official approval or registration procedure before being placed on their markets. The extension of the term of protection may not exceed 5 years. In addition, there are special provisions for the protection of data submitted with an application for marketing authorization for medicinal products or plant protection products. 6. Enforcement of Intellectual Property Rights As for the IP rights protection through the EU-Korea FTA, on the one hand, the FTA provides for civil actions to protect right holders (e.g., provisional and protective measures, rights to information, remedial and injunctive measures, damages). In the area of criminal law, each party to the FTA must provide for criminal procedures and penalties that apply at least in cases of intentional counterfeiting of trademarked goods and intentional unauthorized manufacture of goods protected by a copyright or related right on a commercial scale. The imitation of geographical indications and of designs and models is also relevant under criminal law. Measures such as seizure or confiscation are available. A special provision exists regarding the liability of online service providers . The FTA also provides for special border measures to protect intellectual property rights . A right holder who has reasonable grounds to suspect that the import, export, re-export, entry into customs transit, transhipment, entry into a free zone, entry into a customs suspensive procedure, or entry into a duty-free warehouse of goods infringes an intellectual property right may apply in writing to the judicial or administrative authorities for the customs authorities to suspend the release of such goods or to detain the goods . If the customs authorities have legitimate reasons in the course of their activities and prior to a right holder's request to that effect, they may suspend the clearance of the goods or seize the goods so that the right holder can file a request to that effect. Lawyer IP Law & FTA Dr. Simon Harald Baier LL.M. assists you in intellectual property law , especially in connection with the EU-Korea Free Trade Agreement .

There are a number of risks involved in international trade transactions between buyers and sellers. Some of these risks relate to payment delays, delivery difficulties and financing issues. Letters of credit have been introduced to address this issue by involving a third party – a bank – in the transaction to mitigate credit risks for exporters. What is a letter of credit? A letter of credit is a written document issued by the i mporter's bank ("issuing bank") on behalf of the exporter. By issuing the letter of credit, the exporter is assured that the issuing bank will make a payment to the exporter for the commercial transaction conducted between both parties. The importer is the applicant of the letter of credit, while the exporter is the beneficiary. In the case of a letter of credit, the issuing bank promises to pay the stated amount within the agreed period and upon presentation of certain documents. In doing so, it usually uses a receiving ("advising") bank – usually the exporter's house bank. A basic principle of a letter of credit is that the issuing bank makes p ayment solely on the basis of the documents presented and is not obliged to physically ensure the shipment of the goods. If the documents presented comply with the terms of the letter of credit, the bank is obligated to make payment. The beneficiary (normally the exporter) does not receive payment from the issuing bank until the letter of credit is due and all required documents are presented. Documents often required for a letter of credit are: - ship bill of lading - air waybill - commercial invoice - insurance certificate - certificate of origin - packing list - goods inspection certificate There are also special forms of the letter of credit. In the case of deferred payment letters of credit, for example, the second bank accepts the export documents that conform to the letter of credit, but no immediate payment is made. Only a payment claim of the exporter is documented, which he can assert with the bank after a defined period of time. For refinancing purposes, the exporter can apply to his bank for advance payment of the expected letter of credit amount. Another special form is, for example, the transferable letter of credit. Procedure for letters of credit in Austria Importers must follow a specific procedure when applying for letters of credit in Austria: After a purchase agreement has been drawn up and signed between the importer and the exporter, the importer applies to his bank for the issuance of a letter of credit in favour of the exporter. The more clearly and unambiguously the purchase agreement is drafted, the easier it is to handle a letter of credit. It is important to check and determine at this stage which documents must (and can) be provided and in what form. The terms of the letter of credit must correspond to those of the purchase contract. Have a draft of the letter of credit sent to you in advance so that you can have it checked yourself, by your lawyer or by your house bank for any necessary changes! The issuing bank (the importer's bank) will then draw up the letter of credit, which should comply with the terms of the purchase agreement, and send it to the exporter's bank. The exporter and his bank should also be sure to evaluate the creditworthiness of the issuing bank . Once this has been done and the letter of credit has been reviewed – particularly with regard to its compliance with the terms of the purchase agreement – the exporter's bank approves the document and sends it to the importer. Then the exporter manufactures and ships the goods according to the agreed schedule. A shipping company or a forwarder helps to deliver the goods. Together with the goods, the exporter also submits documents to his bank proving compliance with the purchase agreement. After approval , the exporter's bank sends these documents to the issuing bank. After reviewing the documents , the issuing bank releases payment to the exporter and sends the documents to the importer, who collects the shipment. What to consider before arranging a letter of credit An important point for exporters is the need to submit documents in strict compliance with the terms of the letter of credit. Any failure to comply with the letter of credit may result in non-payment or delays and disputes in payment. The more clearly and unambiguously the purchase agreement is formulated, the easier it is to deal with a letter of credit. It is important to check and determine at this stage which documents must (and can) be provided and in what form. The issuing bank should be a bank with a good standing . Another point that must be clarified before using a letter of credit is the bearing of costs . If costs are imposed on the exporter, the cost of recovery will increase. Apart from the cost bearing, the cost-benefit ratio of a letter of credit in comparison to other options (e.g. bank guarantee) should also be considered. Lawyer international trade law Dr. Simon Harald Baier LL.M. advises on issues of international trade law , in particular on international contract drafting and letters of credit .

In October 2022, the Secondary Residence and Vacancy Tax Act (StZWAG) of the Austrian province of Styria came into force. It allows Styrian municipalities to levy a tax on vacant apartments (housing vacancy tax) based on a resolution of the municipal council . At the end of March 2023, the municipal council of the Styrian tourist municipality of Schladming decided to levy the constitutionally questionable tax . Housing vacancy tax in Austria (Styria) The subject of the tax are premises suitably equipped for residential purposes , which can be used by the owner without significant modification to meet a housing need , even if only temporary (apartments), at which, according to the data of the Central Register of Residents, more than 26 calendar weeks in the year there is neither a report as a main residence nor as another residence . The following are explicitly exempt from the obligation to pay the tax : - apartments owned by a non-profit building, housing and settlement association; - apartments owned by local authorities; - buildings with up to three apartments, where the owners of the building have their main residence in one of the apartments; - dwellings used for business purposes, including those belonging to agricultural and/or forestry enterprises; - dwellings that are vacant for no more than 26 calendar weeks in a year on the occasion of necessary repair work; - dwellings which are no longer used as a residence by the owners for health or age-related reasons; - provident apartments for children, but not more than one provident apartment per child in Styria; - apartments that are not rentable due to official orders; - buildings with one or more apartments for which the Federal Office for the Preservation of Historical Monuments has issued a notice stating that they are listed buildings; - dwellings owned or used by a foreign state or by organizations established on the basis of state treaties or by persons recognized as extraterritorial, insofar as these dwellings are used for the accommodation of diplomatic missions or for residential purposes for persons recognized as extraterritorial. Who must pay the housing vacancy tax? The persons liable to pay the vacancy tax in Austria (Styria) are the owners of the dwelling , but in the case of a building lease, the persons entitled to the building lease . Caution: Obligation for self-calculation! Persons liable to pay the levy must calculate the levy themselves and notify the competent tax office of the self-calculated amount for each calendar year, the usable floor space of the dwelling and the calendar weeks without residence in the year by March 31 of the following year and pay it within four weeks of notification of the self-calculation. Reversal of the burden of proof The otherwise liable person must prove that one of the above exceptions applies. If the circumstances of the individual case make it unreasonable to expect the taxpayer to provide such proof, it is sufficient to establish prima facie evidence. With regard to the exception of provident housing , the person liable to pay the tax must prove that the tax has been paid for any other provisional housing for the same child in other municipalities in Styria for which there is a levy obligation in these municipalities. Preventive housing in municipalities in which no vacancy tax is levied shall not be taken into account. Amount of vacancy tax With regard to the amount of the levy, the Styrian legislator has also given the municipalities some leeway here; it may not exceed a maximum of EUR 1000 per calendar year for apartments with 100 m² of usable floor space and is to be reduced or increased accordingly depending on the actual size. In Schladming the local council has decreed the maximum value . Lawyer real estate law Attorney at Law Dr. Simon Harald Baier LL.M. advises on all questions in relation to a secondary residence , on business law and real estate law .

In October 2022, the Secondary Residence and Vacancy Tax Act (StZWAG) of the Austrian province of Styria (Steiermark) came into force. It allows Styrian municipalities to levy a tax on secondary residences based on a resolution of the municipal council . f an apartment is only used for tourism purposes and not as a secondary residence, for example, the burden of proof shifts to the owner . This should help to curb the emergence of more and more second homes, which are considered unsustainable for the development of communities in tourism regions. At the end of March 2023, the municipal council of the Styrian tourist community of Schladming decided to levy the tax . Secondary residence tax The subject of the levy is secondary residences – any residence that is not a principal residence (the latter is established where a person has settled with the demonstrable intention or the intention evident from the circumstances to create the center of his or her living relations) is considered a secondary residence if the person concerned occupies a dwelling there, provided that the circumstances indicate that he or she will retain and use the dwelling. For this purpose, dwellings are considered to be premises suitably equipped for residential purposes , which can be used by the owner without substantial modification to meet a need for living , even if only on a temporary basis. Explicitly excluded from the obligation to pay the levy are dwellings that are used - serve almost exclusively for professional purposes (commuting), educational purposes, purposes of study, apprenticeship, or military or civilian service; - serve agricultural or forestry purposes, such as the cultivation of alpine pastures or forestry crops; - are no longer used by owners as their main residence for health or age-related reasons; - Are used by caregivers or serve a care residence. Who must pay the secondary residence tax in Austria (Styria)? Those liable to pay secondary residence tax in Austria (Styria) are the property owners of the dwelling , but in the case of a building lease, the persons entitled to the building lease . However, if the dwelling is rented, leased or otherwise provided for an indefinite period or for at least six months, the other owners (such as tenants, leaseholders) are liable to pay the tax for the duration of the provision. The tax claim arises at the end of the respective calendar year. Caution: Obligation for self-calculation! Persons liable to pay the tax must calculate the tax themselves and notify the competent tax office of the self-calculated amount for each calendar year and the usable floor space of the dwelling by March 31 of the following year and pay it within four weeks of notification of the self-calculation. Reversal of burden of proof The person otherwise liable to pay the tax must prove that there is no secondary residence in a specific case ( e.g. because the apartment is used for tourism ) or that one of the exceptions listed above applies to an existing secondary residence. If the circumstances of the individual case make it unreasonable to expect the taxpayer to provide such proof, a prima facie case will suffice. Amount of tax With regard to the amount of the levy, the Styrian legislature has given the municipalities some leeway; it may not exceed EUR 1000 per calendar year for apartments with 100 m² of usable floor space and is to be reduced or increased accordingly, depending on the actual size. In Schladming , the municipal council has decreed the maximum value . Attorney for real estate law Attorney at Law Dr. Simon Harald Baier LL.M. advises on all questions in relation to a secondary residence , on business law and real estate law .

The Regulation on safeguarding competition in air transport Regulation on safeguarding competition in air transportSince 2019, the "Regulation 2019/712 on safeguarding competition in air transport" has been in place, which aims to prevent competitive disadvantages for European airlines . It is intended to enable the European Commission to take measures against unfair and discriminatory practices of non-Union airlines - among other things on the basis of a complaint by airlines or an association. This is because domestic airlines are often exposed to state-subsidised competitors or other unfair practices in global competition and suffer a corresponding competitive disadvantage. National or European competition rules often do not apply in such cases. What can an airline do against unfair or discriminatory practices? One or more EU airlines or an association of EU airlines - in addition to individual member states - has the right to lodge a complaint with the EU Commission . The EU Commission is obliged to initiate an investigation procedure if there is prima facie evidence of the following circumstances: - A distortive practice by a third country or a third country entity (which is, in simplified terms, any natural or legal person in a third country involved in the provision of air transport and related services, such as airlines, ground handlers, etc.) – these are cases of "discrimination" or subsidies ; - injury or threat of injury to one or more EU airlines; and - a causal link between the alleged practice and the alleged (threatened) injury. In principle, the Commission has a maximum of five months after a complaint has been lodged to decide whether to initiate proceedings. Discrimination is any differentiation by a third country or third country entity, not justified by objective reasons, in relation to the provision of goods or services (including public services) used for the operation of air transport services or in relation to their treatment by public authorities relevant to those services. This includes practices relating to air traffic control or airport facilities and services, fuelling, ground handling, security, computer reservation systems, slot allocation, charges and the use of other facilities or services for the provision of air transport services. Mostly, it will involve the application of different prices . In turn, a subsidy is a financial contribution or income or price support provided by a government or other public body of a third country. Investigation by the EU Commission Following the initiation of the investigation procedure, the Commission shall seek and verify all information it deems necessary for the purpose of the investigation. For the purpose of a determination of injury, all relevant factors shall be taken into account, in particular: - The situation of the EU carriers concerned, in particular in terms of service frequency, capacity utilisation, network effects, turnover, market share, profit, profitability, investment and employment; and - the general situation in the markets for the air services concerned, in particular with regard to price levels, capacity and frequency of air services or network utilisation. If the investigation is positive and there are no grounds for suspension or termination, remedies against the distortive practice are available (so-called "injury track"). Alternatively, if there is a violation of obligations under international air service agreements or other agreements containing provisions on air services, the proceedings may be suspended and the violation dealt with under the dispute settlement mechanism provided for in such an agreement (so-called "violation track"). Remedies are designed to remove the injury resulting from a practice that distorts competition. They are imposed on the airlines of a third country benefiting from this practice . The Commission may impose financial charges or operational measures to this end. The Commission must also always take into account the Union interest when making its decision - for example, if the other conditions for the imposition of remedies are met, but such imposition would be against the Union interest, the Commission must terminate the investigation without remedial action. The adoption, maintenance, amendment or repeal of remedies are decided through the so-called comitology by examination procedure – here the EU member states have a significant say . The Commission is thus dependent on them, and the effectiveness of the regulation must first pass its practical test. Attorney aviation law & competition law Dr. Simon Harald Baier LL.M. advises on all questions of aviation law and competition law .

National subsidy and support measures in favour of companies are subject to EU state aid law . If such activities may distort competition and affect interstate trade, they are in principle prohibited . The extent to which an aid measure fulfils the conditions of an exception must in principle be determined by the European Commission , which can approve certain aid. Unlawfully granted aid must be effectively recovered by the affected Member State from the aid recipient . In the aviation sector , in addition to direct state subsidies to airports or airlines, cases are also relevant in which public funds are available to an airport and these benefit an airline in a special form – for example, through arrangements on discounts on airport charges . The legal framework for such subsidies is examined in more detail below: Legal framework – advantages granted by airports to airlines State aid must generally (with a few exceptions) be approved. The European Commission , as the responsible supervisory authority, has drawn up guidelines for the assessment of state aid from airports to airlines. First, of course, it must be examined whether the advantages granted by airports to airlines constitute any state aid at all – an economic advantage – in favour of an airline. Only if such an advantage exists, can approval be required. The prerequisite is first that the measures granted by a public company are attributable to the state - this is the case with public airports . Whether a company (the airline) has subsequently received an economic advantage is examined on the basis of the so-called “market economy operator principle” . a) The market economy operator principle The Commission considers that agreements concluded between airlines and an airport may be considered to be in conformity with the market economy operator principle if, from an ex ante point of view, they contribute incrementally (i.e. build up gradually) to the profitability of the airport . The airport should demonstrate, when setting up an arrangement with an airline (e.g. individual contract or general airport charging scheme), that it is capable of covering all costs stemming from the arrangement , over the duration of the arrangement, with a reasonable profit margin on the basis of sound medium-term prospects . This should also consider the non-aeronautical revenues expected to be generated by the airline's activities. Similarly, any incremental costs likely to be incurred by the airport in relation to the airline’s activities at the airport should also be taken into account. For example, if the airport needs to build or expand a terminal or other facilities, in particular due to the needs of a specific airline, the corresponding costs should be taken into account in the calculation of the incremental costs. b) Start-up aid However, if the above test does not lead to cost recovery, and therefore state aid to an airline is present , it may still be permissible and approved as so-called “start-up aid” . Start-up aid is state aid to airlines for launching a new route with the aim of increasing the connectivity of a region . For it to be permissible, the following conditions must be met cumulatively : Contribution to a well-defined objective of common interest: E.g. aid to promote the economic development of areas where the standard of living is abnormally low or where there is serious underemployment. Need for state intervention: State aid may only be granted if it can bring about substantial improvements which the market cannot bring about itself. Appropriateness of State aid as policy instrument: The aid measure must be an appropriate instrument to achieve the objective of common interest (business plan). Existence of incentive effect: The aid must lead the undertakings concerned to change their behaviour and to engage in additional activities which, without the aid, they would not undertake or would undertake only to a lesser extent or in a different way or in a different location. Proportionality of the aid amount: Limitation of the aid to the minimum necessary. Avoidance of undue negative effects on competition and trade between Member States: The negative effects of the aid must be limited to a sufficient extent so that the overall balance of the measure is positive. Transparency of aid: Member States, the Commission, economic operators and the interested public must have easy access to all relevant rules and to relevant information on aid granted under them. Conclusions If concrete evidence is found that a public airport is granting aid to airlines, this could be considered admissible as “start-up aid” for the launch of new routes. However, this requires a prior notification to and examination by the Commission. Aid that is not approved would have to be repaid by the recipient of the aid! Whether the criteria of state aid are fulfilled at all is determined by the standard of the “market economy operator” : According to this, state aid would be present, for example, if a public airport were not in a position, during the term of the arrangement with the respective airline, to cover the costs from the arrangement with a reasonable profit margin on the basis of sound medium-term medium-term prospects. This calculation would have to take into account, in addition to the airport charges (net of any discounts, marketing support or incentive schemes), the non-aeronautical revenues expected to be generated by the airline’s activities and any incremental costs . Characteristics that speak in favour of compliance with the market economy operator standard would include risk reduction through diversification (expansion of the airport’s customer base), better allocation of resources, reduction of overcapacities and (free) advertising measures for the benefit of the airport. However, if the bottom line were not an economically reasonable plus, state aid would have to be assumed. Attorney aviation law & competition law Dr. Simon Harald Baier LL.M. advises on all questions of aviation law and competition law .