Contributed By Kellerhals Carrard
Switzerland is signed up to the following international conventions relating to anti-bribery and anti-corruption:
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 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 SCC, to the granting to and the accepting by Swiss public officials of an undue advantage (Articles 322quinquies and 322sexies SCC). Article 322decies 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 shall 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 are governed by Articles 322octies and 322novies SCC.
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:
The provisions governing the bribery of Swiss public officials do not only include 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.
In abstract terms, the objective elements of active and passive bribery (Articles 322ter, 322quater, 322septies, 322octies and 322novies SCC), according to Swiss criminal law, consist of the following:
Subjectively, all types of bribery require that the offender acts 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 is offered, promised or given to cause the public official to carry out or to fail to carry out an act in connection with his official activity that is contrary to his duty or dependent on his discretion. Therefore, (i) the public official’s act has to be carried out or failed to be carried out in connection with his official activity, (ii) the act has to be contrary to the public official’s duty or dependent on his discretion and (iii) the undue advantage has to be offered, promised or given in order for the public official to carry out or to fail to carry out the act being contrary to his duty (principle of equivalence).
A connection with the official activity of the public official exists where he is acting in his official capacity or violates official duties through the act at stake. A breach of duty must be held to be established if the public official violates a provision under public law describing his dutiful conduct. Alternatively, the respective condition is also met if the public official’s act is dependent on his discretion. Equivalence of the undue advantage and the public official’s determinable consideration is fulfilled if there is a sufficient connection between the public official’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 public official, 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 public official 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 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 SCC), passive bribery by Swiss public officials (Article 322quater SCC), the granting of an undue advantage to Swiss public officials (Article 322quinquies SCC) and the accepting of an undue advantage by Swiss public officials (Article 322sexies 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 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. 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 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 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 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 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) SCC).
Bribery of Foreign Public Officials
The active and passive bribery of foreign public officials is a punishable offence pursuant to Article 322septies 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 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 active and passive bribery of Swiss (Articles 322ter and 322quater SCC) and foreign public officials (Article 322septies SCC) is forbidden, but also active and passive bribery of private individuals (Articles 322octies and 322novies SCC). Pursuant to Article 322octies para. 1 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 official activities that is contrary to his duties or dependent on his 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 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 on complaint. Minor cases could be held to be established, in particular, in the following circumstances:
Active and passive bribery of Swiss or foreign public officials (Articles 322ter, 322quater and 322septies SCC) qualify as felonies and are thus predicate offences to money laundering according to Article 305bis SCC.
In contrast, active and passive bribery of private individuals (Articles 322octies and 322novies 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 SCC).
The general provisions contained in Article 322decies SCC are applicable to every form of bribery in Swiss law. According to Article 322decies para. 1 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 bribery purpose, are not covered by Article 322decies para. 1(b) 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 SCC, the competent authority shall refrain from prosecuting the offender, bringing him to court or punishing him if the level of culpability and consequences of the offence are negligible.
Article 322decies para. 2 SCC foresees that private individuals who fulfil official duties are subject to the same provisions as public officials.
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 could be held liable for passive bribery or accepting of an undue advantage if he accepts an undue advantage to influence another public official. The third party giving the undue advantage could be held liable for active bribery or granting of an undue advantage. However, the undue advantage must be linked to the official activity of the intermediary. If the intermediary is a private individual and the public official whose decision shall 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.
Under Swiss criminal law, it is a punishable offence if a debtor fails to comply with a statutory obligation to which he is subject to keep and preserve business accounts or draw up a balance sheet, with the result that his financial position is not ascertainable or not fully ascertainable, if, inter alia, bankruptcy proceedings are commenced against him (Article 166 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 SCC).
Forgery of documents is covered by Article 251 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 SCC (forgery of a document by a public official) is applicable.
Under Swiss law, there are several provisions relating to the criminally relevant behaviour of public officials.
Pursuant to Article 313 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 another, damages the public interests that he has a duty to safeguard is liable to prosecution for misconduct in public office (Article 314 SCC).
A public official is criminally liable for the appropriation of moveable property belonging to another but entrusted to him as well as for the unlawful use of financial assets entrusted to him for his own or another's benefit (Article 138 SCC).
Finally, any member of an authority or a public official who abuses his official powers to secure an unlawful advantage for himself or another, or to cause prejudice to another, is liable to prosecution for abuse of public office (Article 312 SCC).
As mentioned in 1.2.1 Bribery, Articles 322ter to 322novies SCC explicitly foresee 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.
According to Article 3 para. 1 SCC, any person who commits an offence in Switzerland is subject to the Swiss Criminal Code. Article 8 para. 1 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 must be held to be established if the bribe money has been transferred to 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 (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 SCC).
Furthermore, a person who commits an offence abroad where the requirements of, in particular, Article 6 SCC are not fulfilled is subject to the Swiss Criminal Code if:
If the person concerned is not Swiss and if the offence was not committed against a Swiss person, Article 7 para. 1 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) SCC).
As explained in 1.2.1 Bribery, under Swiss criminal law, according to Article 102 para. 2 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.
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 foreseen in the respective offence. According to Article 97 para. 1(b) 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 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 SCC, and for active and passive bribery of private individuals pursuant to Articles 322octies and 322novies SCC (Article 97 para. 1(c) 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 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 SCC).
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:
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 and 52 SCC set out certain de minimis exceptions.
There are no sectors or industries exempted from the offences discussed above.
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 SCC).
Also, according to Article 53 SCC, if an offender has made reparation for the loss, damage or injury, or made every reasonable effort to right the wrong that he has caused, the competent authority shall refrain from prosecuting him, bringing him to court or punishing him 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. 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 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 SCC). There is no cap on the amount of money for such 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 foresees 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, personal circumstances of the offender and the impact of the sanction on his or her life (Article 47 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 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 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.
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 act to any specific natural person due to the inadequate organisation of the corporation (Article 102 para. 1 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 SCC). 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. 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 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.
However, 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 shall 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 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. It remains to be seen to what extent and when these legislative proposals on whistle-blowing protection in the private sector will come into force.
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 4.3 Protection Afforded to Whistle-blowers). If the new legislation on whistle-blower protection in the private sector should 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 MROS (cf 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 can file the civil claim in separate civil proceedings or as a private claimant in the criminal proceedings (cf 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 OAG will lead the investigation if the offence(s) have 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 (cf 4.2 Disclosure of Violations of Anti-bribery and Anti-corruption Provisions).
In a criminal investigation for corruption, 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. In the case of doubt, documents may be sealed and a judicial authority must rule on their admissibility (Article 248 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 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 SCP provide that if the offender admits the facts brought against him 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 SCP provide that an offender who admits the relevant facts brought against him 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 in court omitted in return for the offender admitting the relevant facts.
Finally, Article 48(d) 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.
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 SCC, the Swiss criminal authorities are competent to prosecute corruption committed in Switzerland. According to Article 8 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, payments to or from a Swiss bank account suffice to create Swiss jurisdiction even though all persons involved act outside Switzerland. However, there is no case law on the subject yet.
In the case of corporate liability (Article 102 para. 2 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.
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 SCC in conjunction with Article 322septies 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 SCC in return for a reparation payment.
In November 2013, the OAG concluded a criminal investigation into the Swedish company Siemens Industrial Turbomachinery (SIT). The investigation was closed based on Article 53 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.
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.
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 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 20 million was allegedly paid in bribes between 2005 and 2013. The subsidiary was fined CHF1 million and had to make a compensation payment of CHF36,741,473. The parent company was fined CHF1.
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.
In a summary punishment order of 21 December 2016, the OAG convicted the Brazilian company Odebrecht SA and its subsidiary 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 CNI 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.
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 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 USD21 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 is limited to CHF5 million, 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 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 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. Since 2012, Switzerland has convicted six individuals and five companies for bribery of foreign public officials and a large number of bribery cases were under investigation in 2018. Furthermore, the OECD Working Group outlined 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. The OECD Working Group recommends that cases be published and the context disclosed to the fullest extent possible. The OECD Working Group regrets that a large number of cases have been resolved outside court proceedings and that the Anti-Money Laundering Act does not apply to lawyers, notaries, accountants and auditors, which is why they are not in a position to contribute to the detection of bribery.
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. The Group of States against Corruption (GRECO) concluded that Switzerland has not implemented the recommendations of GRECO regarding transparency for funding political parties.
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 September 2018, the Federal Council of Switzerland also issued a draft regulation regarding the prevention of terrorism: MROS shall receive the power to approach a financial intermediary solely on the basis of a request from a foreign financial intelligence unit or in connection with spontaneously shared information.
In June 2018, the Federal Council of Switzerland published a legislative draft concerning an amendment of the Anti-Money Laundering Act. The scope of the Act shall be extended and due diligence obligations shall be introduced for certain services that concern the establishment, management or administration of companies and trusts (except operating companies in Switzerland). The amendments would concern all advisers (especially lawyers and notaries).
It is not yet clear when all the legislative amendments will enter into force and to what extent.
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