Anti-Corruption 2019 Second Edition

Last Updated December 09, 2019

Switzerland

Law and Practice

Authors



Kellerhals Carrard has more than 200 professionals, with offices in Basel, Bern, Lausanne, Lugano, Sion, Zürich and Geneva, as well as representation offices in Shanghai and Tokyo. The law firm is one of the largest in Switzerland and boasts a rich tradition going back to 1885. Its continually expanding white-collar crime, investigation and compliance team has 15 professionals, who conduct internal and regulatory investigations, particularly in connection with the healthcare, pharma and life sciences sector, the public sector, anti-bribery and anti-money laundering compliance, as well as supervision in the financial services industry. In 2018, the Kellerhals Carard team led the highly publicised investigation into Postbus. The white-collar crime department has extensive experience in providing advice and court representation for a wide variety of business crime matters and the Kellerhals Carrard specialists have led major international legal assistance matters, related commercial litigation as well as asset-tracing and recovery matters. Kellerhals Carrard’s compliance specialists have broad experience in advising companies of various industries on proper measures to address any compliance deficiencies, including in the area of anti-bribery and anti-corruption.

Switzerland is signed up to the following international conventions relating to anti-bribery and anti-corruption:

  • the Organisation for Economic Co-operation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions of 21 November 1997;
  • the Council of Europe Criminal Law Convention on Corruption of 27 January 1999 as well as its Additional Protocol of 15 May 2003; and
  • the United Nations Convention against Corruption of 31 October 2003.

The main national legislation in the area of anti-bribery and anti-corruption in Switzerland is the Swiss Criminal Code (SCC). The provisions relating to anti-bribery and anti-corruption are governed by Articles 322ter to 322decies of the SCC, which are divided into four sections: bribery of Swiss public officials (Articles 322ter to 322sexies), bribery of foreign public officials (Article 322septies), bribery of private individuals (Articles 322octies and 322novies) and general provisions (Article 322decies).

All types of bribery include active and passive bribery. Bribery of Swiss public officials goes beyond active and passive bribery, which are governed by Articles 322ter and 322quater of the SCC, to the granting to and the accepting by Swiss public officials of an undue advantage (Articles 322quinquies and 322sexies of the SCC). Article 322decies of the SCC sets out the advantages that are not undue, as well as the equality between private individuals who fulfil official duties and public officials.

The provisions relating to anti-bribery and anti-corruption are interpreted and enforced by the Swiss courts. In addition, legal doctrine contributes to their interpretation.

The Swiss State Secretariat for Economic Affairs (SECO) published in 2017 in its third edition a brochure entitled "Preventing corruption – Information for Swiss businesses operating abroad". The brochure is designed to help Swiss companies operating abroad to cope with the pertinent regulations in Swiss criminal law, highlight the effects of corruption on their business and provide advice on how to prevent and combat corruption.

Prior to 1 July 2016, the criminal offences of active and passive bribery of private individuals were governed by Article 4a in conjunction with Article 23 para 1 of the Swiss Unfair Competition Act (SUCA). Since 1 July 2016, the offences of active and passive bribery in the private sector have been governed by Articles 322octies and 322novies of the SCC.

Bribery

In Swiss criminal law, no distinction is made between bribery and corruption. As outlined in 1.1.2 National Legislation, the relevant provisions in the Swiss Criminal Code are divided into the following four sections:

  • bribery of Swiss public officials;
  • bribery of foreign public officials;
  • bribery of private individuals; and
  • general provisions.

The provisions governing the bribery of Swiss public officials do not include only the active and passive bribery of Swiss public officials but also the granting to and the accepting by Swiss public officials of an undue advantage.

In accordance with the classification of the Swiss Criminal Code, the following discussion will distinguish between these four categories.

Preliminary Remarks

In abstract terms, the objective elements of active and passive bribery (Articles 322ter, 322quater, 322septies, 322octies and 322novies of the SCC), according to Swiss criminal law, consist of the following:

  • a bribing person;
  • a bribed person ‒ either a Swiss public official, a foreign public official or a private individual;
  • a bribe ‒ an undue advantage;
  • a prohibited act ‒ the offering, promising or giving of an undue advantage (active bribery) or the demanding, the securing of the promise of or the accepting of an undue advantage (passive bribery); and
  • a purpose ‒ the bribing person offers, promises or gives to the bribed person a bribe to cause the latter to carry out or to fail to carry out an act in connection with his or her official activity that is contrary to his or her duty or dependent on his or her discretion (principle of equivalence).

Subjectively, all types of bribery require that the offender act with intent; ie, the offender must carry out the act in the knowledge of what he or she is doing and in accordance with his or her will. Conditional intent (dolus eventualis) is sufficient. Thus, if the offender regards the realisation of the act as being possible and accepts this, he or she acts with conditional intent.

An undue advantage within the meaning of the provisions relating to anti-bribery and anti-corruption in Switzerland may be tangible or intangible. A tangible advantage is any measurable improvement, be it a cash payment, a payment in kind or a legal improvement. Intangible advantages are, for example, social or professional advantages. The advantage is undue if the offender is not authorised to accept it.

Active and passive bribery require that the undue advantage be offered, promised or given to cause the bribed person to carry out or to fail to carry out an act in connection with his or her official activity that is contrary to his or her duty or dependent on his or her discretion. Therefore, (i) the bribed person’s act has to be carried out or has to fail to be carried out in connection with his or her official activity, (ii) the act has to be contrary to the bribed person’s duty or dependent on his or her discretion and (iii) the undue advantage has to be offered, promised or given in order for the bribed person to carry out or to fail to carry out the act which is contrary to his or her duty (principle of equivalence).

A connection with the official activity of the bribed person exists where he or she is acting in his or her official capacity or violates official duties through the act in question. A breach of duty must be held to be established if the bribed person violates a provision under public law respectively under labour law and his or her employment contract describing his or her dutiful conduct. Alternatively, the respective condition is also met if the bribed person’s act is dependent on his or her discretion. Equivalence of the undue advantage and the bribed person’s determinable consideration is fulfilled if there is a sufficient connection between the bribed person’s behaviour and the undue advantage granted by the bribing person.

With respect to all types of bribery, the undue advantage does not need to be offered, promised or given to the bribed person, but can also be offered, promised or given to a third party. In addition, for the offender to be punishable, it is sufficient that the undue advantage is offered, promised or given to the bribed person without any requirement that the results expected by the involved persons actually occur.

Under Swiss criminal law, the failure to prevent bribery is not an offence. However, a company may also be punished for a bribery offence committed in the company, irrespective of the criminal liability of any natural persons, if the company did not undertake all requisite and reasonable organisational precautions required to prevent bribery (Article 102 para 2 of the SCC). In addition, principals can be held liable for having failed to prevent bribery committed by employees under their supervision.

Bribery of Swiss Public Officials

Under the heading "Bribery of Swiss public officials", four offences are to be distinguished: active bribery of Swiss public officials (Article 322ter of the SCC), passive bribery by Swiss public officials (Article 322quater of the SCC), the granting of an undue advantage to Swiss public officials (Article 322quinquies of the SCC) and the accepting of an undue advantage by Swiss public officials (Article 322sexies of the SCC). With respect to the constituent elements common to all types of bribery, reference is made to the preliminary remarks. The following discussion is limited to the elements specific to the bribery of Swiss public officials.

The notion of Swiss public officials encompasses members of a judicial or other authority, public officials, officially appointed experts, translators or interpreters, arbitrators, or members of the armed forces.

Public officials are the officials and employees of a public administrative authority or of an authority for the administration of justice, as well as persons who hold office temporarily or are employed temporarily by a public administrative authority or by an authority for the administration of justice or who carry out official functions temporarily (Article 110 para 3 of the SCC). In Swiss corruption law, the position of a public official is assessed on the basis of the functional notion of a public official. Employees of State-controlled companies are therefore included in this notion.

In contrast to active bribery, passive bribery does not include members of the armed forces. The same is valid for the accepting by Swiss public officials of an undue advantage. By mirroring the offering, promising or giving, the Swiss public official demands, secures the promise of or accepts the undue advantage.

The granting to and the accepting by Swiss public officials of an undue advantage (Articles 322quinquies and 322sexies of the SCC) differs from active and passive bribery in so far as the undue advantage is offered, promised or given in order that the Swiss public official carries out his or her official duties. Thus, in contrast to active and passive bribery, the offering, promising or giving of an undue advantage is not linked to a concrete or at least determinable consideration of the Swiss public official (principle of equivalence). Nevertheless, the granting of the undue advantage needs to be suitable for influencing the carrying out of the Swiss public official’s official duties.

In contrast to active and passive bribery pursuant to Articles 322ter and 322quater of the SCC, the granting to and the accepting by Swiss public officials of an undue advantage only refer to the future exercise of the public official's official duties.

It is noteworthy that the granting to and the accepting by Swiss public officials of an undue advantage (Articles 322quinquies and 322sexies of the SCC) only apply to Swiss public officials.

Facilitation payments, defined as smaller payments made to secure or expedite the performance of a routine or necessary action to which the payer has legal or other entitlement, could, in principle, fall within the scope of the offences of granting to and accepting by Swiss public officials of an undue advantage. However, negligible advantages that are common social practice do not constitute undue advantages (Article 322decies para 1(b) of the SCC).

Bribery of Foreign Public Officials

The active and passive bribery of foreign public officials is a punishable offence pursuant to Article 322septies of the SCC.

With respect to the constituent elements common to all types of bribery, reference is made to the preliminary remarks.

Within the meaning of active and passive bribery of foreign public officials, the undue advantage is offered, promised or given to, respectively demanded, secured the promise of or accepted by a member of a judicial or other authority, a public official, an officially appointed expert, translator or interpreter, an arbitrator, or a member of the armed forces who is acting for a foreign state or international organisation.

Bribery of Private Individuals

Since 1 July 2016, not only is the active and passive bribery of Swiss (Articles 322ter and 322quater of the SCC) and foreign public officials (Article 322septies of the SCC) forbidden, but also the active and passive bribery of private individuals (Articles 322octies and 322novies of the SCC). Pursuant to Article 322octies para 1 of the SCC, any person who offers, promises or gives an employee, partner, agent or any other auxiliary of a third party in the private sector an undue advantage for that person or a third party in order that the person carries out or fails to carry out an act in connection with his or her official activities that is contrary to his or her duties or dependent on his or her discretion is criminally liable.

As the constituent elements correlate with bribery of public officials, reference is made to the preliminary remarks.

It is nevertheless noteworthy that the offences of active and passive bribery of private individuals within the meaning of Articles 322octies and 322novies of the SCC are also applicable to the bribery of foreign private individuals. Furthermore, in minor cases, active and passive bribery of private individuals is only prosecuted upon complaint. Minor cases could be held to be established, in particular, in the following circumstances:

  • the sum in tort is not extensive;
  • the security and health of third parties are not affected by the offence;
  • there is no multiple, repeated or commission of the offence by a member of a group;
  • no document fraud has been committed in connection with the bribery.

General Provisions

The general provisions contained in Article 322decies of the SCC are applicable to every form of bribery in Swiss law. According to Article 322decies para 1 of the SCC, the following are not undue advantages: (i) advantages permitted under public employment law or contractually approved by a third party and (ii) negligible advantages that are common social practice.

Advantages that are negligible, but clearly aiming at a purpose of bribery, are not covered by Article 322decies para 1(b) of the SCC. The threshold for negligible advantages that are common social practice lies with the possibility of influencing the person accepting the advantage; ie, in general about CHF150.

In addition, pursuant to Article 52 of the SCC, the competent authority shall refrain from prosecuting the offender, bringing him or her to court or punishing him or her if the level of culpability and consequences of the offence are negligible.

Article 322decies para 2 of the SCC provides that private individuals who fulfil official duties are subject to the same provisions as public officials.

Money Laundering

Active and passive bribery of Swiss or foreign public officials (Articles 322ter, 322quater and 322septies of the SCC) qualify as felonies and are thus predicate offences to money laundering, according to Article 305bis of the SCC.

In contrast, active and passive bribery of private individuals (Articles 322octies and 322novies of the SCC) are qualified as misdemeanours and are thus not predicate offences to money laundering. The same is true for the granting to and the accepting by Swiss public officials of an undue advantage (Articles 322quinquies and 322sexies of the SCC).

Influence-peddling

By trading in influence, a person misuses his or her influence over a decision-maker (typically a public official) for a third party in return for any undue advantage.

Swiss law does not detail a specific offence with respect to trading in influence. However, if the intermediary is a public official, he or she could be held liable for passive bribery or the accepting of an undue advantage if he or she accepts an undue advantage to influence another public official. The third party giving the undue advantage could be held liable for active bribery or the granting of an undue advantage. However, the undue advantage must be linked to the official activity of the intermediary. It is important to note that, under Swiss law, the granting to and the accepting by public officials of an undue advantage only apply to Swiss public officials.

If the intermediary is a private individual and the public official whose decision is to be influenced participates in the corruptive scheme and at least implicitly accepts the undue advantage for the intermediary, active and passive bribery could be fulfilled. Depending on the explicit or implicit agreement between the parties, the third party could be held liable for complicity or incitement to active bribery, the intermediary for active bribery (or complicity to active bribery) and the public official for passive bribery.

Financial Record-keeping

Under Swiss criminal law, it is a punishable offence if a debtor fails to comply with a statutory obligation to which he or she is subject to keep and preserve business accounts or draw up a balance sheet, with the result that his or her financial position is not ascertainable or not fully ascertainable, if, inter alia, bankruptcy proceedings are commenced against him or her (Article 166 of the SCC). Moreover, any person who wilfully or through negligence fails to comply with the statutory duty to keep proper accounts or to preserve accounts, business correspondence and business telegrams is criminally liable (Article 325 of the SCC).

Forgery of documents is covered by Article 251 of the SCC, which punishes the production and the use of a false or falsified document. If the offender is a public official or a person acting in an official capacity, Article 317 of the SCC (forgery of a document by a public official) is applicable.

Public Officials

Under Swiss law, there are several provisions relating to the criminally relevant behaviour of public officials.

Pursuant to Article 313 of the SCC (overcharging of taxes), any public official who, for unlawful gain, levies taxes, fees or other charges that are not due or that exceed the statutory rates, is criminally liable.

Likewise, any member of an authority or public official who, in the course of a legal transaction and with a view to obtaining an unlawful advantage for himself or herself or another, damages the public interests that he or she has a duty to safeguard is liable to prosecution for misconduct in public office (Article 314 of the SCC).

A public official is criminally liable for the appropriation of moveable property belonging to another but entrusted to him or her, as well as for the unlawful use of financial assets entrusted to him or her for his or her own or another's benefit (Article 138 of the SCC).

Finally, any member of an authority or a public official who abuses his or her official powers to secure an unlawful advantage for himself or herself or another, or to cause prejudice to another, is liable to prosecution for abuse of public office (Article 312 of the SCC).

Intermediaries

As previously mentioned under the heading of Bribery in 1.2 Classification and Constituent Elements, Articles 322ter to 322novies of the SCC explicitly provide that the undue advantage does not need to be offered, promised or given to the public official, but can also be offered, promised or given to a third party. Apart from that, the general provisions concerning complicity, incitement and assistance are applicable, as the case may be.

Swiss criminal law distinguishes between the limitation of prosecution rights and the limitation period for the execution of a sentence. Whereas the former has the effect of hindering the authorities in prosecuting, the latter prevents a sentence from being executed.

Limitation of prosecution rights depends on the maximum sentence provided for in the respective offence. According to Article 97 para 1(b) of the SCC, the right to prosecute is subject to a time limit of 15 years if the offence carries a custodial sentence of more than three years. This is the case for active and passive bribery of a Swiss or foreign public official (Articles 322ter, 322quater, 322septies of the SCC). The right to prosecute is subject to a time limit of ten years for the offences of granting to and accepting by Swiss public officials of an undue advantage pursuant to Articles 322quinquies and 322sexies of the SCC, and for active and passive bribery of private individuals pursuant to Articles 322octies and 322novies of the SCC (Article 97 para 1(c) of the SCC).

If a judgment is issued by a Court of First Instance before expiry of the limitation period, the time limit no longer applies (Article 97 para 3 of the SCC).

Depending on the sentence imposed, the right to execute a sentence in connection with a bribery offence is subject to a limitation period of five, 15 or 20 years (Article 99 para 1 of the SCC).

According to Article 3 para 1 of the SCC, any person who commits an offence in Switzerland is subject to the Swiss Criminal Code. Article 8 para 1 of the SCC clarifies the notion of the place of commission by stating that an offence is considered to be committed at the place where the person concerned commits it or unlawfully omits to act and at the place where the offence has taken effect.

It is sufficient for the Swiss authorities to assert jurisdiction if the offence is only partly committed in Switzerland. With respect to bribery, Swiss jurisdiction can arguably be held to be established if the bribe money has been transferred to or from a bank account in Switzerland, irrespective of whether the bribing or the bribed person has been to Switzerland.

Notwithstanding the above, Swiss legislation has extra-territorial reach under certain conditions. A person who commits an offence abroad that Switzerland is obliged to prosecute in terms of an international convention is subject to the Swiss Criminal Code provided that (i) the act is also liable to prosecution at the place of commission or no criminal law jurisdiction applies at the place of commission and (ii) the person concerned remains in Switzerland and is not extradited to the foreign country (Article 6 para 1 of the SCC).

Furthermore, a person who commits an offence abroad where the requirements of, in particular, Article 6 of the SCC are not fulfilled is subject to the Swiss Criminal Code if:

  • the offence is also liable to prosecution at the place of commission or the place of commission is not subject to criminal law jurisdiction;
  • the person concerned is in Switzerland or is extradited to Switzerland due to the offence; and
  • under Swiss law, extradition is permitted for the offence, but the person concerned is not being extradited (Article 7 para 1 of the SCC).

If the person concerned is not Swiss and if the offence was not committed against a Swiss person, Article 7 para 1 of the SCC is applicable only if the request for extradition was refused for a reason unrelated to the nature of the offence (Article 7 para 2(a) of the SCC).

As explained under the heading of Bribery in 1.2 Classification and Constituent Elements, under Swiss criminal law, according to Article 102 para 2 of the SCC, a company is penalised for an offence committed in the company by an individual irrespective of the criminal liability of any natural persons, provided the company has failed to take all the reasonable organisational measures that are required to prevent such an offence.

A successor entity is only liable to prosecution instead of the entity within which an offence has been committed if there is identity between the two entities, which is the case if the assets of the actually liable entity (i) exist separately from the assets of the successor entity, (ii) are used in an identical or similar manner as before and (iii) form an important part of the total assets of the successor entity.

This condition is not met in the case of a merger of two entities of the same size.

Generally speaking, a person or corporation accused of bribery can raise defences relating to the objective and subjective requirements of the relevant provision (see 1.2 Classification and Constituent Elements). In particular, it can be challenged that:

  • a gift qualifies as an undue advantage;
  • in the case of Article 322septies of the SCC, whoever was offered or demanded the undue advantage has the status of a foreign public official;
  • the undue advantage has been offered "in order to cause" the public official to act contrary to his or her duties (lack of "equivalence link");
  • the public official who was offered or demanded the undue advantage had any influence on the carrying out of the relevant official act;
  • the offender acted with intent or at least conditional intent (dolus eventualis) in relation to all objective requirements of the offence;
  • in the case of corporate liability, the corporation has not taken all reasonable organisational measures required to prevent the offence; or
  • in the case of insufficient organisational measures, the lack of such measures enhanced the commitment of the offence.

There are no exceptions to the defences mentioned under 2.1 Defences.

As outlined in 1.2 Classification and Constituent Elements, Article 322decies para 1(b) and 52 of the SCC set out certain de minimis exceptions.

There are no sectors or industries exempted from the offences previously discussed.

Swiss law does not contain specific provisions to reward spontaneous reports of irregularities by natural persons or corporations. However, self-reporting followed by co-operation during proceedings may be taken into account by the criminal authorities when determining a sentence (Article 102 para 3, 47 and 48 of the SCC).

Also, according to Article 53 of the SCC, if an offender has made reparation for the loss, damage or injury, or made every reasonable effort to right the wrong that he or she has caused, the competent authority shall refrain from prosecuting him or her, bringing him or her to court or punishing him or her if the requirements for a suspended sentence are fulfilled and the interests of the general public and of the persons harmed in prosecution are negligible.

Alternatively, if the above requirements are not met, but the facts are acknowledged in a spontaneous report or during the subsequent investigation, the offender may apply for a so-called accelerated proceeding and thus avoid a long trial. Typically, the sanctions imposed in such accelerated proceedings are of a lesser severity.

The maximum penalty for an individual convicted of active or passive bribing of (either Swiss or foreign) public officials is five years’ imprisonment and/or a monetary penalty. The maximum penalty for granting or accepting an undue advantage is three years' imprisonment and/or a monetary penalty. Bribery in the private sector carries sentences of up to three years of imprisonment or a monetary penalty. The maximum monetary penalty is CHF540,000. Depending on the circumstances of the case, penalties may also include a ban on exercising professional activities or a revocation of a residence permit for foreigners. A legal entity may be sanctioned with a fine of up to CHF5 million.

As a significant sanction, the court may order the forfeiture of illegal profits obtained through corrupt acts or assets intended to induce or to reward the offender (Article 70 of the SCC). If the assets subject to forfeiture are no longer available, the court may uphold a claim for compensation by the State in respect of a sum of equivalent value (Article 71 of the SCC). There is no cap on the amount of money for such a forfeiture or compensation claims.

Often bribery will include parallel violations of accounting or bookkeeping obligations, or falsification of accounting documents, and sometimes tax offences. Such violations may lead to the same or similar criminal sanctions as bribery (imprisonment or monetary sanctions) as well as to administrative sanctions in certain regulated sectors. Lastly, Swiss criminal procedure law provides that an individual who has suffered harm from bribery or corruption may file a civil claim as a private claimant in the criminal proceedings.

Swiss Criminal Law does not provide for general guidelines applicable to the assessment of appropriate penalties. Rather, based on the Swiss Criminal Code, the authorities have broad discretion in determining the appropriate sanction. Factors to be considered include the degree of fault, previous convictions, the personal circumstances of the offender and the impact of the sanction on his or her life (Article 47 of the SCC). To determine the amount of the monetary penalty for an individual, the court particularly takes into account the offender’s personal and financial circumstances at the time of conviction (Article 34 of the SCC). To determine the amount of the fine in the case of a conviction of a corporation, the court takes into account the seriousness of the offence, the degree of the organisational inadequacies, the damage caused and the economic capability of the company (Article 102 para 3 of the SCC).

Repeated offences will lead to an increase of the sentence for the most serious offence up to 50% (Article 49 para 1 of the SCC). Although Swiss law does not contain provisions to reward spontaneous reports of irregularities generally, self-reporting followed by co-operation during criminal proceedings may be taken into account when the sentence is determined (see 5.4 Discretion for Mitigation).

Swiss law does not explicitly provide for duties to prevent corruption, in particular by setting up a compliance programme. However, corporate criminal liability exists, if a felony or misdemeanour is committed in a corporation and if it is not possible to attribute such an act to any specific natural person due to the inadequate organisation of the corporation (Article 102 para 1 of the SCC). Furthermore, a company may also be punished irrespective of the criminal liability of any natural persons if the enterprise did not undertake all requisite and reasonable organisational precautions required to prevent bribery (Article 102 para 2 of the SCC). Such precautions may consist of risk analysis, training, internal controls and internal policies. Accordingly, if a company lacks an adequate compliance programme, the company may become criminally liable. In any case, and depending on the circumstances, an effective compliance programme may at least help to mitigate the criminal liability of the corporation.

Swiss anti-money laundering legislation contributes to the detection of bribery in so far as all Swiss financial intermediaries are required to inform the Money Laundering Reporting Office Switzerland (MROS) immediately when they are aware or have “reasonable grounds” to suspect that assets involved in a business relationship fall under at least one of the criteria set out in the Anti-Money Laundering Act (AMLA), including if they originate in a predicate offence to money laundering (Article 9 AMLA). Corruption of public officials, in contrast to corruption in the private sector, qualifies as a felony and is thus a predicate offence for money laundering (Article 305bis of the SCC). In fact, it is one of the predicate offences that most frequently underpin reports of suspect transactions to the MROS. Once the cases have been processed by the MROS, the cases are forwarded to the Federal Office of the Attorney General (OAG) or cantonal attorneys general offices as appropriate. The MROS is the most frequent source of information leading to criminal proceedings for international corruption, followed by international mutual legal assistance.

Suspected or actual misconduct in the business domain of a corporation requires senior management (board of directors, executive committee) to initiate an internal investigation and if the internal investigation results in evidence of misconduct, the corporation has to decide whether to self-report the misconduct. There is, however, no duty to disclose violations of anti-bribery and anti-corruption provisions in Switzerland, and neither does Swiss law explicitly provide for credit or leniency during a criminal investigation. Self-reporting followed by co-operation during criminal proceedings may be taken into account when the sentence is determined.

There is no specific protection afforded to whistle-blowers in the private sector under Swiss law. Rather, the competent courts decide on a case-by-case basis whether the reporting of irregularities is legitimate. Swiss courts assess in each individual case, applying a balancing of interests' test, whether the employee's notification of an irregularity to the employer, the authorities or the media was lawful in the concrete case, and examine the facts of the case primarily under the aspect of the employee's duty of loyalty.

In September 2018, the Swiss Federal Council published a draft legislation that aims to set out clear procedures and rules for the reporting of “irregularities” in the private sector. The proposal would allow employees to report irregularities internally to their employer, under certain circumstances to the competent authorities and, as a last resort, to the media without breaching their duty of loyalty to their employer. According to the draft legislation, Swiss-based companies with a whistle-blowing system that fulfils certain requirements would benefit from the assumption that reporting to the employer is effective, which, in turn, means that an employee is not allowed to report irregularities directly to the competent authority. The deliberations in the Swiss parliament so far, however, showed that it is doubtful whether this piece of legislation will ever enter into force any time soon.

As regards the public sector, in accordance with the Federal Personnel Act (and relevant provisions in many cantons), many Swiss officials, although subject to obligations of official secrecy, are required to report crimes and offences to their supervisors. At the federal level, whistle-blowers must report certain offences directly to the criminal prosecution authorities, their supervisors or the Swiss Federal Audit Office (Article 22a Federal Personnel Act). This requirement is accompanied by a general prohibition on retaliation.

Lastly, many cantons have introduced whistle-blower platforms. For example, an office to combat corruption has been established within the cantonal office of the Ombudsman in Zurich.

There are no specific incentives for whistle-blowers to report bribery or corruption in Switzerland.

In practice, many corporations have established mechanisms for employees to report suspected or actual misconduct to an independent person and corporations sometimes encourage or oblige employees to report suspicions of bribery: for example, to the compliance department, to an external lawyer or to a specific whistle-blower portal. Upon such reporting, an employer may choose to waive its right to take civil action against the reporter even if he or she is involved in the bribery or corruption. An employer’s waiver, however, does not protect the employee from prosecution by the criminal authorities.

Today, under Swiss law, there is no specific protection afforded to whistle-blowers in the private sector (for the public sector, see 4.4 Incentives for Whistle-blowers). If the new legislation on whistle-blower protection in the private sector were to be adopted, the new rules would be incorporated by way of a partial revision of the Swiss Code of Obligations.

Anti-bribery and anti-corruption laws are in principle enforced by criminal authorities and, to a certain extent and less directly, by administrative bodies such as the Swiss Financial Market Supervisory Authority (FINMA) and the Money Laundering Reporting Office (MROS) (see 5.2 Enforcement Body).

Furthermore, an individual who has suffered harm from bribery or corruption may file a civil claim for compensation of damages or surrender of profits based on the Federal Law on Unfair Competition. He or she can file the civil claim in separate civil proceedings or as a private claimant in the criminal proceedings (see 3.1 Penalties on Conviction).

In principle, the enforcement of anti-bribery and anti-corruption offences lies with the prosecutor’s office at the cantonal or federal level. The Office of the Attorney General of Switzerland (OAG) will lead the investigation if the offence has been committed to a substantial extent abroad or in two or more cantons, with no single canton being the clear focus of the criminal activity. An agreement is in place between the cantonal prosecution authorities and the OAG governing the question of jurisdiction. Remaining conflicts of competence are decided by the Swiss Federal Criminal Court.

In relation to banks and other financial intermediaries, FINMA is authorised to enforce its supervisory powers independently from any criminal investigation led by the prosecution authorities. In a landmark case, FINMA ordered a bank to terminate its activities in view of the bank’s involvement in corruption. In other cases, the procedures led to sanctions such as the confiscation of illegal proceeds, naming and shaming, restriction or termination of activities, or a ban on practising for several years for individuals. FINMA and the competent prosecution authorities have broad competences to co-operate and exchange the information that they require in the context of their collaboration.

MROS also plays an important role in the enforcement process. It receives suspicious activity reports from financial intermediaries and, after analysis, forwards them to the criminal authorities for follow-up action. Such suspicious activity reports may in particular relate to corruption as a predicate offence of money laundering (see 4.2 Disclosure of Violations of Anti-bribery and Anti-corruption Provisions).

In a criminal investigation for bribery , the prosecution authorities may use all coercive measures provided for by the Swiss Criminal Procedure Code (SCP). In particular, they may order interrogations of witnesses and suspects, house searches or, against non-suspect third parties (eg, banks and other financial intermediaries), the disclosure of documents and/or information. The right against self-incrimination (principle of nemo tenetur se ipsum accusare) provides a ground for refusing to co-operate (including the right to remain silent or to disclose documents) with the prosecution authorities. In addition, documents covered by an attorney-client privilege or obtained by illegal means are not admissible in criminal proceedings. It is noteworthy, however, that the attorney-client privilege does not extend to in-house counsels. In the case of doubt, documents may be sealed and a judicial authority must rule on their admissibility (Article 248 of the SCP).

In contrast, based on Article 29 of the Federal Act on the Swiss Financial Market Supervisory Authority (FINMASA), financial intermediaries supervised by FINMA are obliged to provide FINMA with all documents and information FINMA deems necessary to fulfil its supervisory duties.

The enforcing bodies act ex officio and are thus obliged to investigate and sanction bribery without exception. Swiss law does not provide for plea agreements, deferred prosecution agreements and non-prosecution agreements exactly equivalent to such instruments in other jurisdictions. However, Swiss law provides for the following mechanism to achieve similar results.

According to Article 53 of the SCC, the competent authority shall refrain from prosecuting or punishing an individual or corporation if the offender “has made reparation for the loss, damage or injury or made every reasonable effort to right the wrong" and the interests of the general public and of the person harmed are negligible, and the requirements for a suspended sentence are fulfilled. In such cases, the reparation requested can be discussed ex ante between the prosecution and the defence, and could, for example, consist of a payment to a charitable organisation.

Articles 352 et seq of the SCP provide that, if the offender admits the facts brought against him or her or if the facts are “otherwise sufficiently established,” the prosecution authorities may issue a summary penalty order, which can be appealed to the court and is thus, so to speak, a plea agreement offer by the prosecution authorities. The offer may be the result of discussions between the prosecutor and the defence.

Articles 358 et seq of the SCP provide that an offender who admits the relevant facts brought against him or her and accepts civil claims raised by damaged parties may apply for so-called accelerated proceedings, which may involve "sentence bargaining" between the prosecutor and the defence. The sentence is reduced and a long trial avoided in return for the offender admitting the relevant facts.

Finally, Article 48(d) of the SCC provides for mitigation of a sanction if the offender has shown sincere remorse for his or her actions and in particular has made reparation for the damage, in so far as this may be expected of him or her. This provision can be applied, for example, in the case of self-reporting and/or improvement of the company’s compliance and governance practice.

As regards FINMA investigations, FINMA has a wide discretion to mitigate sanctions with a view to the financial intermediary’s co-operation during the investigation, including efforts for reparation.

According to Article 3 of the SCC, the Swiss criminal authorities are competent to prosecute corruption committed in Switzerland. According to Article 8 of the SCC, a bribery offence is considered to be committed both at the place where the person concerned acts or unlawfully omits to act and at the place where the offence has taken effect.

The place of commission is broadly construed. Arguably, corruptive payments to or from a Swiss bank account suffice to create Swiss jurisdiction even though all persons involved act outside Switzerland.

In the case of corporate liability (Article 102 para 2 of the SCC), it is not necessary that the bribery offence itself was committed by a Swiss corporation in Switzerland; it is sufficient that a lack of organisation occurred (at least partially) in Switzerland, which may be the case in the situation of a subsidiary, affiliate or branch located in Switzerland that is responsible for the compliance of the group of companies.

FINMA is authorised to issue administrative orders relating to corruption against persons and entities that are required to be licensed, recognised or registered by FINMA.

Alstom Case

In November 2011, after three years of investigation, the OAG issued a summary punishment order against Alstom Network Schweiz AG for breach of Article 102 para 2 of the SCC in conjunction with Article 322septies of the SCC and fined the company CHF2.5 million and imposed a compensatory claim of CHF36.4 million. Alstom Network Schweiz AG, the company responsible for the compliance of the group but not otherwise involved in the bribe payments, was convicted of not having taken all necessary and reasonable organisational precautions to prevent bribery of foreign public officials in Latvia, Tunisia and Malaysia. The investigation into the parent company, Alstom SA, was closed without punishment based on Article 53 of the SCC in return for a reparation payment.

SIT Case

In November 2013, the OAG concluded a criminal investigation into the Swedish company Siemens Industrial Turbomachinery (SIT). The case concerned illegal payments to senior executives of Gazprom in relation to a contract for gas turbines for the pipeline linking Russia’s Yamal peninsula to Western Europe. The investigation was closed based on Article 53 of the SCC after SIT admitted inadequate enforcement of compliance regulations in relation to Yamal gas pipeline projects and paid reparation of CHF125,000 in the form of a donation to the International Committee of the Red Cross (ICRC). SIT also paid compensation of USD10.6 million for unlawfully obtained profits.

As for the individuals involved, the FCC two years later issued an acquittal on the grounds that the senior executives of Gazprom receiving the commissions were not public officials in the sense of Article 322septies of the SCC.

Fertiliser Case

By a summary punishment order of 31 May 2016, the OAG convicted the company of failure to take reasonable and necessary organisational measures to prevent corrupt payments to foreign public officials and ordered it to pay a fine of CHF750,000 for a corrupt payment of USD1.5 million to a senior Libyan official (Minister for Oil) in exchange for the right to build a fertiliser plant in Libya.

Construction 1 Case

The Construction 1 case concerns charges of bribery of foreign public officials against a former senior executive of a Canadian construction company. Inducements were given to the son of the late Libyan dictator in order to secure contracts which were valued at more than USD21 million and generated assets worth more than EUR70 million. The former executive was the beneficial owner of the companies which allegedly made illicit profits of over EUR30 million. After having launched a criminal investigation on 11 May 2011 against the former executive, the Office of the Attorney General (OAG) filed a simplified-procedure indictment against the Canadian group and its former executive on 18 July 2014. On 1 October 2014, the Federal Criminal Court upheld the judgment recommended by the OAG. With regard to another aspect of the procedure (retrocessions to the senior executive), the Canadian company was acknowledged as the injured party in this case. The Federal Criminal Court held that the former executive’s breach of his duty of due diligence had caused a damage to the company. The former executive was sentenced to three years' custody. Some of his assets were confiscated and he was ordered to pay damages in the amount of CHF12 million plus interest to the Canadian company, which passed this amount on to Switzerland.

Construction 2 Case

A businessman belonging to an eminent North African family had acted as intermediary in a corruption case in Libya involving a Canadian engineering group (see Construction 1 Case). He was convicted of complicity in the bribery of foreign public officials in a summary punishment order of the OAG dated 22 March 2016 and given a suspended pecuniary day-fine of 150 days at CHF2,500,ie, a total of CHF375,000. Assets in the amount of CHF425,264 were confiscated.

Port Infrastructure Case

In four summary punishment orders of 1 May 2017, the OAG convicted a Belgian company and its subsidiary, specialists in port infrastructure development, for failure to take reasonable and necessary organisational measures to prevent bribes to foreign public officials (Article 102 para 2 of the SCC). The investigation revealed a financial set-up whereby the Belgian subsidiary and two individuals paid funds to public officials in Nigeria, in part through companies whose beneficiaries were politically exposed persons (PEPs). These payments were moved through three letterbox companies domiciled in the British Virgin Islands. More than CHF20 million was allegedly paid in bribes between 2005 and 2013. The subsidiary was fined CHF1million and had to make a compensation payment of CHF36,741,473. The parent company was fined CHF1.

Odebrecht/CNO Case

In a summary punishment order of 21 December 2016, the OAG convicted the Brazilian company Odebrecht SA and its subsidiary Construtora Norberto Odebrecht SA (CNO) for not having taken all reasonable and necessary organisational measures to prevent bribery and money laundering in connection with the Petrobras affair. The conviction, which took the form of a summary punishment order, is part of a co-ordinated conclusion of the proceedings, initiated by Switzerland and also involving Brazil and the USA. Odebrecht and CNO were held jointly and severally liable by the OAG to pay to Switzerland CHF117 million in an equivalent claim; the subsidiary was sentenced to a fine of CHF4.5 million and the parent company Odebrecht SA to a fine of CHF0. The company Braskem SA had also paid bribes via the same channels as Odebrecht SA and CNO. Proceedings in Switzerland against Braskem SA have been abandoned as the company was being held accountable in the USA. However, the Swiss decision to abandon the proceedings involved the company paying compensation of CHF94.5 million in Switzerland. Altogether, the claims against the companies ‒ which were based in Brazil on civil proceedings, in the USA on a guilty plea and in Switzerland on the summary penalty order ‒ amounted to around USD2 billion.

Banknotes Case

Company DD, a subsidiary of company D (a world leader in the manufacture of machinery for the printing of banknotes), self-reported to the OAG on 19 November 2015 a possible breach of Article 102 para 2 in conjunction with Article 322septies SCC in connection with a deal in Nigeria. This spontaneous initiative was followed in April 2016 by the reporting of further suspicions concerning other deals in Morocco, Brazil and Kazakhstan. The value of the contracts secured by the company in these four countries was CHF626 million and the total paid in bribes was CHF24.6 million. In a summary punishment order of 23 March 2017, company DD was convicted and fined CHF1. It was also required to make a compensation payment of CHF35 million, of which CHF5 million was paid into a fund for the improvement of compliance standards in the banknotes industry.

Gunvor Case

In a summary penalty order from October 2019, the OAG convicted the Geneva commodities trader Gunvor of failing to take all the organisational measures that were reasonable and necessary to prevent its employees and agents from bribing public officials (Article 102 para 2 in conjunction with Article 322septies of the SCC). The investigation revealed that Gunvor’s employees and agents bribed public officials in the Republic of Congo and Ivory Coast to gain access to their petroleum markets. The company failed to prevent these acts of corruption due to serious deficiencies in its internal organisation. Gunvor was fined CHF4 million, which took into account the efforts that had been made since 2012 to improve their compliance and governance practice. In addition, Gunvor must pay compensation of almost CHF90 million, which corresponds to the total profit that Gunvor made from the business in question in the Republic of Congo and Ivory Coast.

Based on the Swiss Criminal Code, the authorities have broad discretion in determining the appropriate sanction. Factors to be considered include the degree of fault, previous convictions, personal circumstances of the offender and the impact of the sanction on his or her life (Article 47 of the SCC). Taken as an example, in the Port Infrastructure case discussed in 5.6 Recent Landmark Investigations or Decisions Involving Bribery or Corruption and featuring a bribe of more than USD20 million, the accused individuals were convicted to suspended day-fines of between CHF8,500 and CHF360,000. In addition, the OAG confiscated from the accused individuals an amount equivalent to their bonuses.

As for the sanctions imposed on legal entities, reference is made to the cases discussed in 5.6 Recent Landmark Investigations or Decisions Involving Bribery or Corruption. While the maximum fine for companies is limited to CHF5million, a significant sanction comes from the fact that the court may order the forfeiture of illegal profits obtained through corrupt acts or assets intended to induce or to reward the offender (Article 70 of the SCC). If the assets subject to forfeiture are no longer available, the court may uphold a claim for compensation by the State in respect of a sum of equivalent value (Article 71 of the SCC). There is no cap on the amount of money for such forfeiture or compensation claims.

In 2000, Switzerland signed up to the OECD Convention on Combating Bribery of Foreign Public Officials and in 2006 to the Council of Europe’s Criminal Law Convention on Corruption (see 1.1 Legal Framework for Offences). Against this background, Switzerland has revised the criminal provisions related to the bribing of foreign and domestic officials as well as bribery in the private sector.

In September 2017, Switzerland was assessed by the OECD Working Group (referred to as phase four country monitoring) and in March 2018, the OECD published a country monitoring report concerning Switzerland. The OECD Working Group details the specific achievements and challenges of Switzerland regarding bribery in international business transactions. As positive progress, it outlined the rise in the number of prosecutions and the significant level of enforcement by the Federal Office of the Attorney General. The OECD Working Group expressed its appreciation of the work of the Money Laundering Reporting Office Switzerland for its role in detecting cases of foreign bribery in connection with money laundering and the proactive policy on seizure and confiscation. Also positively mentioned was the active involvement of Switzerland in mutual legal assistance and the measures taken to improve co-operation, such as proactive mutual legal assistance.

The OECD Working Group expects Switzerland to improve its enforcement in the context of bribery of foreign public officials. Negatively assessed was that several court decisions have favoured a restrictive interpretation of bribery offences and the provisions on corporate liability and also that a large number of cases have been resolved outside court proceedings. Furthermore, the OECD Working Group regrets that the Anti-Money Laundering Act does not apply to lawyers, notaries, accountants and auditors.

The OECD Working Group made various recommendations; inter alia, to initiate a legal and institutional framework to protect whistle-blowers in the private sector, to provide the MROS with the resources it needs to be even more effective in combating bribery of foreign public officials, to amend the Anti-Money Laundering Act and grant powers to the MROS, to demand more information from financial intermediaries due to a request from another financial intelligence unit (even without a report in Switzerland) and to increase the statutory maximum fine for legal persons convicted of foreign bribery.

Furthermore, in August 2017, the fourth interim report regarding the conformity of Switzerland with the Council of Europe’s Criminal Law Convention on Corruption was published. This report is based on the third-country review from 2011, which covered both the penal provisions against corruption and the financing of political parties. With the entry into force of the revised Criminal Law on Corruption in 2016, all GRECO recommendations on criminal law were fully implemented. However, the recommendations on the transparency of party financing remained open, which is why Switzerland was transferred to the so-called non-conformity procedure. At its General Assembly in June 2019, GRECO decided that the non-compliance proceeding against Switzerland could now be terminated. In its sixth interim report, GRECO comes to the conclusion that Switzerland's current efforts with regard to transparency in party financing are heading in the right direction and that Switzerland has made progress. Accordingly, the non-compliance procedure will be terminated.

In April 2019, the Interdepartmental Coordination Group on Combating Money Laundering and Terrorist Financing published a report on corruption as a predicate offence to money laundering. The expert group comes to the conclusion that the risk of money laundering from domestic corruption does not seem to be non-existent, but is nevertheless well controlled. The expert group analyses that corruption in Switzerland is very low and is usually limited to attempted corruption. The greatest corruption-related risk of money laundering for the Swiss financial centre emanates from the corruption of foreign public officials, in particular from South America and Western Europe. The Swiss financial centre is presumably mainly used for the transfer of assets. Banks are therefore particularly susceptible to this risk of money laundering. Switzerland intends to take various measures to reduce the risk further. For example, the attractiveness of Swiss domiciliary companies is to be reduced by abolishing tax privileges. It should also be mentioned that the advisers are to be subject to the Federal Act on Combating Money Laundering and Terrorist Financing (see 6.2 Likely Future Changes to the Applicable Legislation or the Enforcement Body).

The Federal Council of Switzerland adopted in September 2018 a legislative message to amend the Swiss Code of Obligations and to introduce clear rules and procedures for whistle-blowers (see 4.4 Incentives for Whistle-blowers). In the vote in June 2019, however, the National Council rejected the law. The Council of States, on the other hand, approved the Federal Council's legislative proposal in December 2019. Should the National Council reject the legislative proposal a second time, the protection for whistle-blowers in Switzerland will probably remain inadequate for the next few years.

On 31 October 2017, the popular initiative for more transparency in policy financing was formally launched. The aim is to insert a new Article into the Federal Constitution on the disclosure of the financing of political parties and election and voting campaigns. The Federal Council had recommended that Parliament reject the initiative.

On 22 January 2019, however, the State Political Commission of the Council of States decided to draw up legal regulations providing for the disclosure of the financing of political activities. This draft is intended to establish transparency regulations for parties, election and voting committees at the legislative level. It was approved by the Council of States in December 2019. According to this draft, the parties represented in the Federal Assembly should be required once a year to disclose their income and contributions, which amount to more than CHF 25,000 per person and year. The popular initiative is, however, also rejected by the Council of States. The draft will be debated in the National Council.

Also worth mentioning is the draft amendment to the Federal Act on Combating Money Laundering and Terrorist Financing, which was published in June 2019. In particular, it provides that advisers who carry out activities in connection with, for example, the establishment of domestic and foreign domiciliary companies, must comply with the due diligence obligations of the AMLA. The amendments are not expected to enter into force until 2021 at the earliest.

Kellerhals Carrard

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+41 58 200 39 00

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Law and Practice

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Kellerhals Carrard has more than 200 professionals, with offices in Basel, Bern, Lausanne, Lugano, Sion, Zürich and Geneva, as well as representation offices in Shanghai and Tokyo. The law firm is one of the largest in Switzerland and boasts a rich tradition going back to 1885. Its continually expanding white-collar crime, investigation and compliance team has 15 professionals, who conduct internal and regulatory investigations, particularly in connection with the healthcare, pharma and life sciences sector, the public sector, anti-bribery and anti-money laundering compliance, as well as supervision in the financial services industry. In 2018, the Kellerhals Carard team led the highly publicised investigation into Postbus. The white-collar crime department has extensive experience in providing advice and court representation for a wide variety of business crime matters and the Kellerhals Carrard specialists have led major international legal assistance matters, related commercial litigation as well as asset-tracing and recovery matters. Kellerhals Carrard’s compliance specialists have broad experience in advising companies of various industries on proper measures to address any compliance deficiencies, including in the area of anti-bribery and anti-corruption.

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