The Swiss Criminal Code (SCC) provides for three categories of offences. A felony is an offence carrying a custodial sentence of more than three years, whereas a misdemeanour carries a custodial sentence not exceeding three years or a monetary penalty. Lastly, a contravention is an act that is punishable by a fine (Article 10 and 103 SCC).
Unless otherwise provided in the law, a monetary penalty may amount to CHF1,080,000 (Article 34 SCC) and a fine of up to CHF10,000 (Article 106 SCC).
In order for an offence to be punishable, intent – ie, knowledge and will – is necessary unless the law expressly provides otherwise. Intent is recognised as the offender's realisation and acceptance of the act as being possible (Article 12 SCC).
A person may also be held liable for attempting to commit an offence, although the court may reduce the penalty in light of the circumstances (Article 22 SCC).
The right to prosecute is subject to a time limit of (Article 97 SCC):
The limitation period begins (Article 98 SCC):
The limitation period stops running if a judgment is issued by a Court of First Instance before its expiry.
Swiss criminal authorities are primarily competent to prosecute an offence when the offence has been committed in Switzerland (principle of territoriality).
An offence is considered to be committed both at the place where the person concerned commits it and where the offence has taken effect (principle of ubiquity, Article 8 SCC).
The place of commission in cross-border white-collar offences is rather largely interpreted, resulting in a relatively broad interpretation of Swiss jurisdiction.
As an example, bribery offences are considered as being committed in Switzerland as long as:
In order to trigger Swiss jurisdiction, it is moreover sufficient that the act is only partially committed in Switzerland. Even an attempt is sufficient, although mere preparatory acts are not.
Swiss jurisdiction in the context of cross-border corporate criminal liability is also rather broadly admitted, and may cover situations where the actual offence committed by the individual within the company is not, itself, subject to Swiss jurisdiction. According to Swiss legal authors, the place of commission in relation to corporate criminal liability is both the place where the initial offence occurred, as well as the place where the compliance measures taken by the company were inadequate – ie, where adequate measures to prevent the commission of the offence should have been taken.
Companies with their seat in Switzerland will thus always be subject to Swiss jurisdiction, irrespective of where the actual offence was committed. However, companies with their seat outside Switzerland will only be subject to Swiss jurisdiction if the offence is committed in Switzerland, or when the lack of adequate compliance measures may be attributed to a department or a branch of the enterprise active in Switzerland.
Finally, Swiss criminal authorities also have extraterritorial jurisdiction in some specific cases (see Articles 4, 6 and 7 SCC).
The SCC provides for two forms of corporate criminal liability.
Subsidiary Liability (Article 102 §1 SCC)
If a felony or misdemeanour is committed in a company in the exercise of commercial activities in accordance with the objects of the company and if it is not possible to attribute this act to any specific natural person due to the inadequate organisation of the company, then the felony or misdemeanour is attributed to the company. Inadequate organisation must be the reason why criminal authorities could not determine which natural person actually committed the offence. Therefore, as a subsidiary liability, companies may only be found guilty if no natural person may be prosecuted.
Primary Liability (Article 102 §2 SCC)
A company may be held criminally liable irrespective of the criminal liability of any natural persons, provided it is responsible for failing to take the reasonable organisational measures required to prevent such an offence. If a specific individual can be identified as the offender, both the offender and the company may be held liable. This provision is limited to the following offences: criminal organisation, financing of terrorism, money laundering, bribery of Swiss public officials, granting an advantage, bribery of foreign public officials and private bribery.
In both subsidiary and primary liability, the company is liable to a fine of up to CHF5 million.
Furthermore, managers and directors of an enterprise might be held personally liable for the offences committed within the enterprise if:
Victims of a white-collar offence may claim compensation for their loss under Article 41 of the Swiss Code of Obligations before the criminal court competent to try the case.
Victims must have formally announced their claim before the end of the criminal investigation (Article 118 §3 Swiss Criminal Procedure Code, or SCPC) and must quantify and justify it before the end of the trial (Article 123 §2 SCPC).
On the merits, compensation might be granted provided that:
Under certain conditions, such as in the event that the civil claim would cause unreasonable expense and inconvenience, the criminal court may make a decision in principle on a civil claim but refer it to the civil court for the quantification (Article 126 SCPC).
Class actions to claim compensation are not available under Swiss law. The Swiss legislator was until recently considering a draft law to create group transaction proceduresbut the draft law caused so much controversy that the discussionof it in parliament was postponedsine die.
Recent Legislative Developments
On 1 July 2019, a modification of Article 53 SCC came into effect, limiting the possibilities for an offender to avoid prosecution or punishment by making a compensation payment (see 2.2 Initiating an Investigation). This modification is the result of a process initiated in 2010 after certain cases raised concern about an apparent facility to escape punishment for those who could afford it.
According to the amended version of Article 53 SCC, the criminal authority may now renounce the need to open an investigation, to convict an offender or to sentence an offender, if the offender has repaired the loss, damage or injury, or made all reasonable efforts to compensate for the damage caused, provided that a maximum sentence of one year is suitable (versus two years in the old version), the interest in prosecution is negligible and the offender has admitted the offence (a condition that did not exist before).
Recent Case Law
In October 2019, the Office of the Attorney General of Switzerland (OAG) announced that the company Gunvor had been convicted for failing to take all the organisational measures reasonable and necessary to prevent its employees and agents from bribing public officials in order to gain access to the petroleum markets in the Republic of Congo and Ivory Coast (Article 102 §2 SCC). The Geneva commodities trader has been ordered to pay almost CHF94 million, including compensation of almost CHF90 million, which corresponds to the total profit that Gunvor made from the business in the Republic of Congo and Ivory Coast.
The public prosecutor is responsible for the uniform exercise of the state's right to punish criminal conduct. It conducts investigations, pursues offences within the scope of the investigation and, where applicable, brings charges before the tribunal and acts as prosecutor during the trial (Article 16 SCPC).
In principle, this competence lies with the public prosecutor's office of the canton where the offence was committed.
However, for a limited list of financial offences – ie, participation in or support for a criminal organisation, financing of terrorism, money laundering, insufficient diligence in financial transactions, and bribery – the material competence lies with the OAG if:
Furthermore, when a white-collar offence is committed within a regulated financial institution (ie, banks, insurance companies, exchanges, securities dealers, collective investment schemes, and their asset managers and fund management companies, distributors and insurance intermediaries), it might fall under the regulatory and administrative jurisdiction of the Swiss Financial Market Supervisory Authority (FINMA).
FINMA has a specific enforcement division competent to investigate suspected violations of supervisory law and, if necessary, to initiate enforcement proceedings. When those violations fall under criminal law, FINMA may file a complaint with the competent criminal authorities (the Federal Department of Finance, the OAG or the cantonal public prosecutors’ office) and exchange information with them.
Criminal investigations may be initiated by the police or by the public prosecutor (Article 300 SCPC).
The police might initiate enquiries based on a complaint filed with them, instructions from the public prosecutor or their own findings (Article 306 SCPC). Such initiation does not require a formal decision, but the SCPC provisions, in particular the usual procedural rights of defence, apply from the outset of the police enquiries.
The public prosecutor opens a formal investigation if there is reasonable suspicion that an offence has been committed based on information and reports from the police, a criminal complaint filed directly with it or its own findings, or if it intends to order coercive measures. The investigation is formally opened with a non-contestable written ruling (Article 309 SCPC).
The public prosecutor is in principle obliged to commence and conduct proceedings that fall within its jurisdiction where it is aware of or has grounds for suspecting that an offence has been committed (Article 7 SCPC). It may, however, renounce to open an investigation and immediately issue a no-proceedings order if the offence’s constituent elements are clearly not fulfilled, if there are procedural impediments (eg, lack of jurisdiction, time-barred offence), or if:
In white-collar crime matters, the opening of an investigation is often triggered by a denunciation received from the Money Laundering Reporting Office Switzerland (MROS). The MROS functions as a relay and filtration point between financial intermediaries, such as banks, and the competent public prosecutor. Under the Anti-Money Laundering Act (AMLA), financial institutions have an obligation to report to the MROS suspicious activities in connection with money laundering, financing of terrorism, money of criminal origin or criminal organisations. Failure to comply with this obligation is a criminal offence. The MROS analyses these reports and if it considers that there are reasonable grounds to suspect that an offence has been committed, it communicates these to the public prosecutor for follow-up action.
Investigative authorities may use all legal means of evidence that are relevant and appropriate to establish the truth. The use of coercion, violence, threats, promises, deception and methods that may compromise the ability of the person concerned to think or decide freely are prohibited when taking evidence, even if the person concerned consents to their use (Article 140 SCPC).
When necessary, the public prosecutor, the tribunal and in some cases, the police, may order coercive measures. These must be necessary and proportionate, and there must be a reasonable suspicion that an offence has been committed (Article 197 SCPC). Coercive measures include the following:
Obtaining Documents and Information from a Company under Investigation
Request to produce documents
The competent authority may request the company to produce specific documents.
In principle, it may not accompany this request with any threat of penalty. As an accused, the company benefits in principle from the same defence rights as a natural person, including the privilege against self-incrimination. The company may therefore not be compelled to incriminate itself and is entitled to refuse to co-operate in the criminal proceedings (Article 113 SCPC).
The application of the privilege against self-incrimination to companies has been limited by case law in relation to companies that are regulated financial institutions, and thus subject to certain record-keeping obligations under supervisory law. According to Switzerland's Supreme Court, the assertion of this privilege must not be a means to circumvent the criminal authorities’ legal right to access documents that those financial institutions are obliged to establish and store under the legislation on money laundering.
Search and seizure of company documents
Irrespective of its privilege against self-incrimination, the company must submit to the coercive measures provided for by the law (Article 113 SCPC). If it refuses to collaborate, the competent authority may order the above-mentioned coercive measures, including the search and seizure of the companies’ records and recordings.
Searches must be authorised by written warrant. In cases of urgency, they may be authorised orally, but must be confirmed subsequently in writing (Article 241 SCPC).
Companies have an obligation to tolerate the search and cannot obstruct it.
When the search concerns documents or other records, including electronic data, their owners – ie, the company managers and the employees concerned – have the right, before the search, to express their views on their content and to indicate to the officials what documents and records cannot be searched or seized.
This is in particular the case for documents and records that:
If no agreement can be reached with the officials, the owner can request the sealing of the documents (Article 248 §1 SCPC). However, the officials might still proceed with a summary examination (eg, reading the title of the documents) in order to determine whether they want to seize them.
The seals must be requested immediately or, at the latest, at the end of the search.
If they still want to use the sealed documents, the criminal authorities must file a request within 20 days before a tribunal to remove the seals. Failing that, the sealed records and property shall be returned to their owner (Article 248 §2 SCPC).
Questioning of persons
Criminal authorities may question any person as long as their questioning is relevant and appropriate to establish the truth.
The rights and obligations of these persons will depend on their status:
Swiss law contains neither rules obliging companies to conduct internal investigations, nor specific rules on the way to conduct them.
Companies are, however, subject to obligations stemming from various legal sources that indirectly require them to conduct such investigations.
In particular, companies may be held criminally liable when they have failed to take adequate organisational measures allowing them to identify the author of an offence or to prevent the commission of offences within their entity (Article 102 SCC). While Swiss law does not specify what those adequate organisational measures are, the implementation of efficient internal investigation processes is usually considered to be part of it.
Furthermore, regulated financial intermediaries are subject to investigation and reporting duties under the Anti-Money Laundering Act. The duty to report suspicious activities to MROS (Article 9 AMLA) requires a company to conduct the necessary investigations to be able to report any suspicions immediately. Failure to comply with this duty is sanctioned with a fine (Article 37 AMLA).
Obligations to FINMA
Regulated financial intermediaries have a duty to provide FINMA with all the information and documents that it requires to carry out its supervisory tasks (Article 29 §1 Financial Market Supervision Act, or FINMASA). They must also immediately report to FINMA any incident that is of substantial importance to this supervision (Article 29 §2 FINMASA). The wilful provision of false information to FINMA is sanctioned by a custodial sentence of up to three years or a monetary penalty, or by a fine of up to CHF250,000 in the case of negligence (Article 45 FINMASA). Failure to comply with the duty to co-operate is not in itself punishable, but it may lead FINMA to open an enforcement investigation and appoint an independent agent to conduct an internal investigation within the company. If the violations of supervisory law are confirmed, FINMA may apply serious sanctions.
Financial intermediaries are thus indirectly obliged to conduct the necessary internal investigations to be able to provide FINMA with correct information, prevent intrusive investigative measures and avoid sanctions.
Active and passive international mutual legal assistance is governed, in the first place, by the applicable international or bilateral treaty between Switzerland and the requesting or requested state.
Switzerland is a party to numerous international treaties, including, the European Convention of 20 April 1959 on Mutual Assistance in Criminal Matters (ECMA) and the European Convention of 3 December 1957 on Extradition (CEExtr). It has also concluded numerous bilateral mutual assistance treaties with foreign states such as the USA, Australia and Canada.
In the absence of such a treaty, the conditions under which mutual assistance may be granted are set out in the Act on International Mutual Assistance in Criminal Matters (IMAC). A foreign request will generally only be granted by Switzerland if the requesting state guarantees reciprocity (Article 8 IMAC).
The Federal Office of Justice is competent to receive requests from foreign authorities and, if the request meets the formal requirements, it will be forwarded to the appropriate executing authority; ie, either the cantonal public prosecutor’s office or the OAG.
Mutual Assistance Measures
These include the interviewing of witnesses and suspects, the seizure and handing over of evidence and documents as well as objects and assets, the search of premises and the seizure of property as well as the arrest of persons for the purpose of extradition. Coercive measures may only be ordered if the offence prosecuted abroad is also punishable in Switzerland (principle of dual criminality).
Mutual legal assistance will notably be refused in the following cases:
Extradition requests from foreign states are governed by the applicable international or bilateral convention and, in particular, the above-mentioned CEExtr and/or the IMAC, which contain similar provisions. According to them, extradition might be granted for white-collar offences provided that the relevant offence is punishable by deprivation of liberty for a maximum period of at least one year both under the law of Switzerland and under the law of the requesting state, and is not subject to Swiss jurisdiction (Article 2 CEExtr).
If, at the end of its investigation, the public prosecutor regards the grounds for suspicion as sufficient, it will bring charges before the competent criminal tribunal of first instance. The indictment is non-contestable (Article 324 SCPC).
Unless the conditions under Articles 52, 53 or 54 SCC are met (see 2.2 Initiating an Investigation), the public prosecutor is in principle obliged to bring charges. The abandonment of proceedings is only possible if the impunity of the accused’s acts is clear or if the conditions of a criminal action are obviously lacking. The principle in dubio pro reo does not apply at this stage; if the legal or factual situation is not clear, it is for the trial judge to decide on the accused’s culpability (in dubio pro duriore).
Deferred prosecution agreements (DPAs) do not currently exist under Swiss law. The OAG suggested the introduction of such a mechanism for companies in the SCPC in 2018, but this proposal was rejected by the Swiss legislator in August 2019. The introduction of DPA mechanisms in Switzerland in the near future therefore seems unlikely (Swiss Federal Council message, FF 2019 6375).
In the past, Swiss criminal authorities have used the discretion offered by Article 53 SCC as an alternative mechanism to resolve a criminal investigation without a trial (see 2.2 Initiating an Investigation). As an example, the Geneva public prosecutor opened an investigation into the bank HSBC for aggravated money laundering in 2015. The bank quickly agreed to pay a specified amount to fix the illicit acts. The Geneva public prosecutor eventually agreed to abandon the proceedings against HSBC pursuant to Article 53 SCC, in exchange for the payment of CHF40 million in favour of the Geneva state.
Swiss law provides two procedures that allow a certain level of negotiation between the public prosecutor, the claimant and the accused.
Accelerated Proceedings (Article 358 et seq SCPC)
At any time prior to indictment, the accused may ask the public prosecutor to conduct Accelerated Proceedings, provided the following conditions are met:
If he or she accepts Accelerated Proceedings, the public prosecutor will discuss the verdict, the sentence and the civil compensation with the parties.
If all parties reach an agreement, the public prosecutor will draft the indictment and send it to the criminal tribunal of first instance (Article 360 SCPC).
The latter’s role is then limited to verifying whether the conditions of the Accelerated Proceedings are met: the tribunal does not conduct any investigations (Article 361 SCPC). It either confirms the indictment or sends it back to the public prosecutor to start an ordinary procedure (Article 362 SCPC).
Summary Penalty Order
The public prosecutor might issue a Summary Penalty Order if:
Unless it is challenged by one of the parties within ten days, the Summary Penalty Order becomes a final judgment and the case does not reach the trial phase.
Although the Summary Penalty Order is not supposed to be a negotiated procedure, criminal authorities tend to use it as such as it allows flexibility. Companies also favour this instrument to settle their case as this permits them to avoid a public hearing.
Swiss law does not specifically deal with criminal company law and corporate fraud offences, but the following general offences may be committed in a corporate context.
Fraud (Article 146 SCC)
Article 146 SCC punishes any person who, with a view to securing unlawful gain for themselves or another, maliciously induces an erroneous belief in another person by false pretences or concealment of the truth, or reinforces an erroneous belief, and thus causes that person to act to the prejudice of their or another's financial interests.
The offender faces a custodial sentence of up to five years – ten if they acted for commercial gain – or a monetary penalty.
Criminal Mismanagement (Article 158 SCC)
Article 158 SCC punishes any person who has been entrusted with the management of the property of another or the supervision of such management, who in the course of and in breach of their duties causes that other person to sustain financial loss.
The person acting in the same manner in their capacity as the manager of a business, but without specific instructions, is liable to the same penalty.
The offender faces a custodial sentence of up to three years – five if they acted for commercial gain – or a monetary penalty.
Misappropriation (Article 138 SCC)
Article 138 SCC punishes any person who, for their own or for another’s unlawful gain, appropriates moveable property belonging to another but entrusted to them, or unlawfully uses financial assets entrusted to them.
The offender is liable to a custodial sentence of up to five years or a monetary penalty.
Forgery of Documents (Article 251 SCC)
Article 251 SCC punishes any person who, with a view to causing financial loss or damage to the rights of another or in order to obtain an unlawful advantage for themselves or another, produces a false document, falsifies a genuine document, uses the genuine signature or mark of another to produce a false document, falsely certifies or causes a fact of legal significance to be falsely certified, or makes use of a false or falsified document in order to deceive.
The offender is liable to a custodial sentence of up to five years or a monetary penalty.
Active and Passive Bribery of Swiss Public Officials
Swiss criminal law prohibits the active bribery of Swiss public officials, which is the act by which a person offers, promises or gives a public official an undue advantage, for the person's own benefit or for the benefit of any third party, in order to cause that public official to carry out or to fail to carry out an act in connection with an official activity that is contrary to their duty or dependent on their discretion (Article 322ter SCC).
Passive bribery – the act by which the public official demands, secures the promise of or accepts such an undue advantage within the same circumstances – is similarly punishable (Article 322quater SCC).
Offenders face a custodial sentence of up to five years or a monetary penalty.
Active and Passive Bribery of Foreign Public Officials
Switzerland extended the prohibition of bribery to foreign public officials by introducing the offence of active bribery of foreign public officials in 2000, and passive bribery of public foreign officials in 2006 (Article 322septies SCC).
The material conditions and sanctions are the same as for offences of bribery of Swiss public officials.
Active and Passive Bribery in the Private Sector
Active and passive bribery in the private sector is also punished under Swiss law (Article 322octies and 322novies SCC). Bribery of private persons presupposes a tripartite relationship in which one person connected to another by a relationship of trust and loyalty – such as an employee, an agent or a partner – receives an undue advantage from a third party in order to act or fail to act, within the context of their professional or commercial activities, in breach of their duties of trust and loyalty to their employer, principal or partner. The prohibition of private bribery aims to protect trust and loyalty in business relationships by sanctioning the breach of private-law duties.
Offenders face a custodial sentence of up to three years or a monetary penalty.
Granting and Acceptance of an Advantage (only for Swiss Public Officials)
Swiss law makes a distinction between “bribery” and “granting of an advantage”. Both active and passive behaviour are prosecuted (Article 322quinquies and 322sexies SCC).
Unlike bribery, an undue advantage is not connected to a specific act or omission of a bribed public official, but is rather given or accepted in order for the public official to carry out their official duties. While the payment of bribes implies an exchange of favours, with undue advantage, the granting of an advantage refers to unjustified favours given or accepted without any concrete consideration in return. It includes facilitation payments or undue advantage given with a general view to establishing a positive climate for the future execution of official duties.
Unlike the offence of bribery, the offence of granting an undue advantage is prosecuted neither with regard to foreign officials nor in the private sector.
Offenders face a custodial sentence of up to three years or a monetary penalty.
Swiss law does not provide for specific obligations to prevent bribery, nor to maintain a compliance programme. However, since Article 102 §2 SCC sanctions companies that fail to take all reasonable organisational measures to prevent bribery, companies often implement anti-bribery programmes to mitigate the risk of criminal liability.
Insider dealing and market abuse are governed by the Financial Market Infrastructure Act (FMIA) and subject to federal jurisdiction (Article 156 FMIA).
Exploitation of Insider Information (Article 154 FMIA)
Article 154 FMIA sanctions the exploitation of insider information to gain a pecuniary advantage for oneself or for a third party by:
The sentence depends on the way the insider obtained the information:
Market Manipulation (Article 155 FMIA)
Article 155 FMIA sanctions the substantial influence of the price of securities admitted to trading on a trading venue in Switzerland with the intention of gaining a pecuniary advantage for oneself or for another by:
Market manipulation is subject to a custodial sentence of up to three years – five if the pecuniary advantage exceeds CHF1 million – or a monetary penalty.
Swiss tax law distinguishes between tax evasion and tax fraud.
Tax evasion is the intentional or negligent reduction of a tax claim to the detriment of the state; eg, by not declaring tax-relevant facts or filing incomplete declarations. It is subject to a fine and is an administrative infringement, subject to the competence of the tax authorities.
Tax fraud is a qualified form of tax evasion implying the use of falsified documents. It is sanctioned with a custodial sentence of up to three years or a monetary penalty of up to CHF1,080,000 and is a criminal offence subject to the competence of the criminal authorities.
Swiss law does not provide for a specific obligation to prevent tax evasion.
Since 1 January 2016, however, qualified tax evasion may be a predicate offence to money laundering if:
As a result, an obligation to prevent tax fraud indirectly ensues from Article 102 SCC, as the company failing to take the reasonable organisational measures required to prevent money laundering may be held criminally liable.
A similar indirect obligation ensues from Article 9 AMLA, according to which, financial intermediaries have investigation and reporting duties when they suspect that assets involved in the business relationship are the proceeds of aggravated tax fraud. Non-compliance is punishable by a fine not exceeding CHF500,000, or CHF150,000 in the case of mere negligence (Article 37 §2 AMLA).
Companies must keep and preserve records of their accounts in order to reflect their financial standing. The exact requirements vary depending on the size of the company. Financial records must be kept for ten years.
The main offences related thereto are:
Cartels are governed by the Federal Act on Cartels and other Restraints of Competition (CartA).
The CartA provides for the following offences:
Offenders can be charged a fine of up to 10% of the turnover achieved by the company in Switzerland in the preceding three years (Article 49a §1 CartA).
The CartA is enforced by the Swiss Competition Commission (ComCo), which is competent to impose administrative sanctions on companies. No charge may be brought against individuals underthe CartA.
Unfair competition is governed by the Unfair Competition Act (UCA), which contains criminal law provisions.
According to Article 23 UCA, intentional unfair competition may be sanctioned with a custodial sentence of up to three years or a monetary penalty. The provision covers various behaviours, such as, unfair advertising and sales methods (Article 3 UCA), inducement to breach or termination of contract (Article 4 UCA), exploitation of the achievements of others (Article 5 UCA), violation of manufacturing or trading secrets (Article 6 UCA), non-compliance with working conditions (Article 7 UCA) and use of abusive Conditions of Business (Article 8 UCA).
There is no proper consumer law in Switzerland. Provisions related to the protection of consumers are scattered in numerous acts, such as the Act on Consumer Information, the Act on Product Liability, the Act on Product Safety and the Act on Consumer Credits.
Each of these acts provides for administrative and criminal sanctions in the event of non-compliance.
The SCC sanctions the following computer-related offences:
The Federal Act on the Implementation of International Sanctions (Embargo Act, EmbA) governs coercive measures enacted by Switzerland to implement sanctions ordered by the United Nations, by the Organization for Security and Co-operation in Europe, or by Switzerland's most significant trading partners, which serve to secure compliance with international law, and in particular respect for human rights.
A “simple” breach of EmbA provisions is punishable by a custodial sentence of up to one year or a monetary penalty of up to CHF540,000. A “qualified” breach is punishable by either a custodial sentence of up to five years or a monetary penalty of up to CHF540,000. In the case of negligence, a monetary penalty of up to CHF270,000 may be issued.
Moreover, the Federal Act on the Control of Dual-Use Goods, Specific Military Goods and Strategic Goods (Goods Control Act, GCA) sets forth provisions relating to export restrictions. Breaches of these provisions can lead to a custodial sentence of up to three years or a fine of up to CHF1,000,000, and in severe cases, to a custodial sentence of up to ten years and a fine of up to CHF5 million.
Article 160 SCC sanctions any person who takes possession of, accepts as a gift or as the subject of a pledge, conceals, or assists in the disposal of goods that they know or must assume have been acquired by way of an offence against property. Intent is required. The concealment predicate offence may be any offence that has the effect of removing a good from the estate to which it belonged.
Unlike in the case of money laundering, the author of a predicate offence may not be held liable for both the predicate offence and the concealment.
If a predicate offence is prosecuted only on complaint, concealment is prosecuted only if a complaint was filed in respect of the predicate offence.
Concealment is sanctioned with a custodial sentence of up to five years – ten if the offender acted for commercial gain – or a monetary penalty. If the sentence applicable to the predicate offence is lighter, that sentence is applicable to concealment too.
The accessory participation in an offence, also liable to prosecution, coversincitement (Article 24 SCC) and complicity (Article 25 SCC).
The wilfulincitement of another to commit a felony or a misdemeanour, provided the offence is committed, is subject to the same sentence as the commission of the offence. The attempt to incite someone to commit an offence is only punishable if the offence is a felony – ie, if it carries a custodial sentence of more than three years – and is subject to the same sentence as the attempt to commit that felony (Article 24 SCC).
The wilful assistance of another to commit a felony or a misdemeanour (“complicity”) is, however, subject to a reduced penalty (Article 25 SCC).
Money Laundering (Article 305bis SCC)
Money laundering is the act aimed at frustrating the identification of the origin, the tracing or the forfeiture of assets that one knows or must assume originate from a felony or aggravated tax misdemeanour. Constituent elements of money laundering are thus the following:
The offence is aggravated, in particular, where the offender:
Money laundering is subject to a custodial sentence of up to three years – five in an aggravated case – or to a monetary penalty.
Insufficient Diligence in Financial Transactions (Article 305ter SCC)
Article 305ter SCC introduces a legal duty for professionals working in the financial sector to identify their beneficial owner and sanctions the failure to do so.
Any person who, as part of their profession, accepts, holds on deposit, or assists in investing or transferring outside assets and fails to ascertain the identity of the beneficial owner of the assets with the care that is required in the circumstances is liable to a custodial sentence of up to one year or to a monetary penalty (Article 305ter SCC).
Further Obligations to Prevent Money Laundering under Supervisory Law
As seen above, regulated financial intermediaries are subject to investigation and reporting duties under the AMLA when they know or have reasonable grounds to suspect that assets involved in a business relationship are the proceeds of a felony or an aggravated tax fraud, or are subject to the power of disposal of a criminal organisation (Article 9 AMLA).
Failure to comply with the duty to report suspicious activities to MROS is punishable by a fine not exceeding CHF500,000; respectively, CHF150,000 if the failure is due to negligence (Article 37 AMLA).
There are no specific defences for white-collar offences in Switzerland.
The standard defence is therefore to argue that the constituent elements of the concerned offence have not been fulfilled.
In this regard, the existence of an effective compliance programme may be an efficient defence in the context of corporate criminal liability, as it proves a certain degree of organisation within the company’s structure. It may thus support the company's affirmation that it did take all the reasonable organisational measures required to prevent such an offence, so that one of the constituent elements of Article 102 SCC – ie, lack of adequate organisation – is lacking.
With regards to offences against property, the offender is liable only on complaint and the maximum sanction is a fine when the offence relates only to an asset of "minor value" or where only a minor loss is incurred (Article 172ter SCC). Case law has set the limit of a minor value at CHF300.
Similarly, in cases of bribery, advantages are not regarded as undue when they are permitted under the regulations on the conduct of official duties or when they are negligible advantages that are common social practice (Article 322octies §2 SCC). Small gifts may thus be regarded as lawful, as long as such a social practice may be proved in the context. The notion of “negligible” is debated but it is generally admitted that it may not exceed CHF300.
More generally, Article 52 SCC provides that Swiss authorities may decide not to prosecute an offender if the degree of culpability and the consequences of the offence are negligible.
Self-disclosure and full co-operation with the criminal proceedings might under some circumstances be considered as grounds for exemption from punishment under Article 53 SCC (see 2.2 Initiating an Investigation) or a mitigating factor under Article 48 letter d SCC, justifying the reduction of the sentence.
Further specific leniency programmes exist in various matters, such as:
Specific measures regarding whistle-blowers were introduced in the Federal Personnel Act in 2011 with regards to employees of the confederation. The Act provides for specific channels to disclose suspected wrongdoings at work, depending on the seriousness of the matter.
Swiss law does not, however, set forth specific provisions protecting whistle-blowers in the private sector. Each case is therefore judged in accordance with the general labour provisions contained in the Swiss Code of Obligations. According to the latter, the right for an employee to report suspected wrongdoings at work outside the workplace must be weighed against the different interests at stake. In any case, the employee must first talk to their employer, then to the competent authority, and only if said authority does not act, to the public.The dismissal of an employee whose report of wrongdoings was lawful is abusive. In such a case, the dismissal remains valid – the employee cannot reclaim their employment – but the employer may be condemned to pay the employee an indemnity of maximum six months’ salary, the usual sanction for an abusive dismissal.
With regards to business organisation, Swiss company law does not provide an obligation to set up an internal reporting procedure. Such an obligation may indirectly ensue from other provisions, such as Article 102 §2 SCC and the necessity to avoid criminal liability.
Likewise, labour law obliges an employer to take all the necessary and feasible measures to protect the employees. The Swiss Supreme Court has confirmed that the appointment of a person of trust, within or outside the company, to whom employees can report potential abuses could be imposed on a company on this legal basis.
Every person is presumed to be innocent until they have been convicted in a judgment that is final and legally binding. The tribunal freely assesses the evidence based on its inner conviction formed over the entire proceedings. Where there is insurmountable doubt as to whether the factual requirements of an alleged offence have been fulfilled, the tribunal shall proceed on the assumption that the circumstances more favourable to the accused occurred (in dubio pro reo) (Article 10 SCPC).
During the investigative phase, the criminal justice authorities investigateex officio all circumstances relevant to the assessment of the criminal act and the accused. They investigate incriminating and exculpating circumstances with equal care (Article 6 SCPC).
In the trial phase, the burden of proof lies with the public prosecutor, which has to prove the relevant facts beyond reasonable doubt to obtain the conviction of the accused.
There are no specific rules governing the assessment of penalties in white-collar crime and the usual principles apply.
According to these, the tribunal determines the sentence according to the culpability of the offender. It takes the previous conduct and personal circumstances of the offender into account, as well as the effect that the sentence will have on them. Culpability is assessed according to the seriousness of the damage or danger to the legal interest concerned, the reprehensibility of the conduct, the offender's motives and aims, and the extent to which the offender, in light of the personal and external circumstances, could have avoided causing the danger or damage (Article 47 SCC).
Full co-operation of the offender may qualify as a mitigating circumstance justifying the reduction of the sentence (Article 48 letter d SCC).
With regards to the white-collar offences committed by companies, the financial standing of the company, as well as organisational measures taken by the company, are elements that are taken into consideration by the tribunal.
Administrative Criminal Law under the Spotlight
In the Swiss legal system, administrative law plays a predominant role. This can be explained by the ever-increasing intervention of the state in social and economic life, conferring rights on private individuals and, in return, imposing obligations on them.
Administrative law very often includes criminal provisions that make it possible to punish transgressions when specific conditions are met. In this case, we speak of administrative criminal law (lato sensu), which covers all the criminal provisions set forth in laws other than the Swiss Criminal Code (SCC).
In view of the variety of situations covered by administrative criminal law, the legislator deemed it necessary to unify this field of law to some extent. Thus, the Federal Act on Administrative Criminal Law (ACL), adopted by the Swiss parliament on 22 March 1974, came into effect on 1 January 1975. In particular, the ACL sought to achieve the following objectives:
Since it came into force, the ACL has not undergone any substantial revision and now seems obsolete in various respects. In particular, the procedural provisions of the ACL have only been adapted to a very limited extent following the introduction of the Swiss Criminal Procedure Code (CrimPC) in 2011. There is no longer any doubt that administrative criminal law is strictly speaking criminal law, with all the consequences that this entails in terms of respect for fundamental rights and procedural guarantees that the accused can avail themselves of, and which the ACL usually does not deal with. Thus, delicate questions of articulation arise between the ACL and the Swiss Criminal Code (SCC) on the one hand, and between the ACL and the CrimPC on the other.
The purpose of this report is to familiarise the readers with Swiss administrative criminal law and some of its particularities, in order to enable them to grasp a topic which is under the spotlight and which is becoming increasingly important in practical terms.
Scope of application
The scope of application of the ACL depends primarily on the subject matter of the criminal investigation and the authority in charge of it. In substance, the ACL comes into play when:
For example, the criminal provisions set forth in the Swiss financial markets laws (which include, among others, the Federal Act on Combating Money Laundering and Terrorist Financing – AMLA) are subject to the ACL and the competence to prosecute and to judge them lies with the Federal Department of Finance (FDF).
In another topic area, violations of the Federal Act on the Application of International Sanctions (Embargo Act – EmbA) are also subject to the ACL and fall within the competence of the State Secretariat for Economic Affairs (SECO).
Conversely, the ACL generally does not apply when the competence for prosecution lies with a cantonal public prosecuting authority, unless the relevant law refers to the ACL for specific matters.
In addition, some federal administrative laws refer either to the jurisdiction of a cantonal authority or to that of a federal administration (in which case, the ACL will apply), depending on the offence in question.
As an example, the Federal Act on the Federal Direct Tax (LIFD) refers to the jurisdiction of the Federal Tax Administration (FTA) for the exclusive prosecution of certain serious tax offences, such as (a) the continuous evasion of large amounts of tax; (b) the use of false, falsified or inaccurate documents with the intent to mislead the tax authority; and (c) the misappropriation of tax at source.
The administrative criminal procedure mainly involves the competent federal administration and the accused, whether they are a natural or a legal person. The investigation is carried out by an "investigating officer", ie, a member of the criminal department of the administration in question.
In addition, in the event that:
then the procedure also involves a court, ie, an independent and impartial judicial authority within the meaning of Article 6 ECHR.
When a case is sent for trial before a court, the file is transferred to a cantonal or, as the case may be, a federal public prosecutor's office, which has the possibility to attend the trial or even to support the prosecution alongside the federal administration before the court.
Administrative criminal procedure
The administrative criminal procedure is divided into two main phases – the investigation phase and the judicial phase – to which must be added the complaint procedure, whenever acts and/or decisions of the investigating officer are challenged in the course of the investigation.
The first stage of the administrative criminal procedure, ie, the investigation phase, is conducted under the lead of the federal administration (via its investigating officer) and its purpose is to collect the relevant evidence and establish the facts. The investigating officer has powers and means of coercion similar to those of a public prosecutor. The accused are often notified about the investigation upon its opening and thereafter, are involved in its progress, although the accused are under no obligation to actively participate in the establishment of the facts.
Upon completion of the investigation, the investigating officer may either propose the issuance of a dismissal order, should he or she feel that the case for a criminal offence is not met, or he or she may issue a final protocol setting out the requirements of the relevant offence should he or she feel these have been fulfilled. The final protocol is notified to the accused who can then exercise their right to be heard by inspecting the file or by requesting further investigation measures. It should be noted that neither the final report, nor the potential refusal of the federal administration to proceed with further investigation measures, are subject to complaint.
After the accused have had an opportunity to fully exercise their right to be heard, the administration to which the investigating officer belongs will either issue a dismissal order, in which case the proceedings will stop, or a repression warrant and/or a confiscation order if he or she believes that assets should be forfeited, regardless of the guilt of the accused.
The accused have the possibility to oppose the repression warrant and/or the confiscation order within 30 days of their notification. The federal administration reconsiders the contested decision and then issues a criminal ruling and/or a new confiscation order, unless it decides to terminate the proceedings.
The second stage of the administrative criminal procedure corresponds to the judicial phase, ie, before the court. This phase takes place when the accused face a custodial sentence or when the accused have requested to be tried by a tribunal within ten days of service of the criminal ruling and/or the confiscation order.
The case is transferred to the cantonal court or to the Federal Criminal Court, depending on their respective competences and the case at hand. From that point on, the general rules of the CrimPC apply, unless otherwise provided in the ACL.
The accused may withdraw their request to be tried by a court – and escape the risk of a more severe penalty imposed by the court (principle of reformatio in pejus) – until the notification of the first instance judgment. Once the judgment has been notified, an appeal is open, before a possible appeal to the Federal Supreme Court.
The principle according to which criminal liability lies primarily with the individual(s) who committed the offence is also applicable in administrative criminal law.
Under certain conditions however, the ACL allows criminal liability to be extended to the superior of the offender and/or to the principal of the company, if they can be accused of not having prevented the commission of the offence by their subordinate, in violation of a guarantor's obligation.
The principle of the criminal liability of natural persons within a company is nevertheless subject to an exception. Under certain restrictive conditions, the company may be sued instead of the natural persons at the origin of the offence: the fine must not exceed CHF5,000 and the investigation against the natural persons responsible for the offence would require disproportionate investigation measures compared to the penalty incurred.
Numerous federal administrative laws have increased the maximum fine that can be imposed on the company instead of the natural persons. For example, the Federal Act on the Swiss Financial Market Supervisory Authority (FINMASA) provides for an amount up to CHF50,000, while the Federal Customs Act raises the maximum amount to CHF100,000.
It should be noted that the SCC also provides for the subsidiary criminal liability of the company, but this is subject to different conditions. The offence must:
The fine incurred by a company under the SCC can amount to up to CHF5 million.
The criminal liability of a company under ordinary criminal law can, in certain cases, be transposed to administrative criminal law, even if the relationship between the two regimes is a controversial topic and has not yet been definitively decided by case law.
Revision of the ACL
As mentioned above, the ACL has not been substantially revised since it came into effect in 1975. It is now outdated in several respects, including the rights of the accused.
Following a parliamentary motion at the end of 2014 to modernise administrative criminal law, work has recently been launched by the Federal Office of Justice to examine the nature and scope of the changes to be made to the ACL.
This process will take some time; we do not expect the new regulations to come into force for two to three years, depending also on how far the revision of the ACL goes.