Population: 20,090,437 (Approx - July 2005)

Economy Overview:

Austria, with its well-developed market economy and high standard of living, is closely tied to other EU economies, especially Germany's. The economy features up-to-date industrial and agricultural sectors. Timber is a key industry, 47% of the land area being forested. Membership in the EU has drawn an influx of foreign investors attracted by Austria's access to the single European market and proximity to the new EU economies. Slow growth in Europe has held the economy to 0.7% growth in 2001, 1.4% in 2002, 0.8% in 2003, and 1.9% in 2004. To meet increased competition from both EU and Central European countries, particularly the new EU members, Austria will need to emphasize knowledge-based sectors of the economy, continue to deregulate the service sector, and encourage much greater participation in the labor market by its aging population. The aging phenomenon, together with already high health and pension costs, poses fundamental problems in tax and welfare policies.

General Business Practices

The Austrian economy operates on free market principles. The private sector of the Austrian economy traditionally consists of small and medium-size businesses. The large industrial concerns which were predominantly state owned are now beeing denationalized since Austria joined the European Union.

Because Austria?s domestic market is comparatively small, foreign trade is of major importance. The export of goods and services accounts for nearly 40 % of GDP. The largest trading partners are the EU countries, especially Germany. Austria has also traditionally significant business relations with the Eastern European countries.

a) The native language is german which is used in all domestic business transactions and in all court proceedings. In court most of the documents used have to be translated into german. In foreign business transactions the general language used is english.

b) The currency of Austria is the ?Schilling? which should change though in 1999 into the ?Euro?.

c) It is usual business practice to agree on general business terms between two contract partners. The only restrictions are, where the terms of contract are contrary to the provisions of Austrian law or public policy.

If the creditor wishes to enforce contractual conditions (terms of warranty, period of complaints, default interest, pre-legal collection costs, court of jurisdiction, agreement on court of arbitration, etc.) he must prove that these conditions were actually agreed upon. The best proof is, when these conditions were signed by both parties.

Collections - General Information

A. + B. Background of Industry

A valid licence, as definded by the Factory Act/Law 1973,revised 1993, is the basic requirement for debt collection in Austria. In order to obtain this licence one has to pass a special test given by the respective federal state authorities in Austria.

On general priciple only overdue and undisputed accounts can be accepted for collection.

All together there are about 60 active collection agencies in Austria most of them have only local importance. The bulk of the collection business is handled by 5 major agencies.

Approximately 400.000 to 500.000 collection cases per year are handled by collection agencies of which approx. 66 % are against private individuals and approx. 33 % on commercial accounts.

Lawyers also handle collection cases, the volume is not known at the present time.

C. General pre-legal collection proceedures

First of all a written demand letter is sent to the debtor the day the claim is received and a letter of acknowledgement is sent to the forwarder (or claimant). At the same time the claim is registered in our data bank.