Financial crime in Switzerland: overview

A Q&A guide to financial crime in Switzerland.

The Q&A gives a high level overview of matters relating to corporate fraud, bribery and corruption, insider dealing and market abuse, money laundering and terrorist financing, financial record keeping, due diligence, corporate liability, immunity and leniency, and whistleblowing.

To compare answers across multiple jurisdictions, visit the Financial and Business Crime Country Q&A tool.

This Q&A is part of the multi-jurisdictional guide to financial crime law. For a full list of jurisdictional Q&As visit www.practicallaw.com/financialcrime-guide.

Contents

Fraud

Regulatory provisions and authorities

1. What are the main regulatory provisions and legislation relevant to corporate or business fraud?

The Criminal Code prohibits fraud in general. A perpetrator is liable if he carries out any of the following actions with a view to securing an unlawful gain for himself or another (Article 146, Criminal Code):

  • Wilfully induces an erroneous belief in another person by false pretences or by concealment of the truth, thereby causing that person to act in a manner that prejudices his or another's financial interests.

  • Wilfully reinforces an existing erroneous belief, thereby causing that person to act in a manner that prejudices his or another's financial interests.

If the perpetrator acts for commercial gain, a more severe penalty applies.

 

Offences

2. What are the specific offences relevant to corporate or business fraud?

General fraud

Article 146 of the Criminal Code prohibits general fraud (see Question 1). There are no specific statutory provisions governing corporate or business fraud.

For a fraud to be committed, the perpetrator must:

  • Deceive another person. For example, by making false representations, concealing facts or by reinforcing an erroneous belief.

  • Act maliciously. A perpetrator acts maliciously where he prevents the defrauded party from verifying false information or where such verification does not take place due to a particular relationship of trust or the presence of clear rules or reassurances. Malice is presumed where the perpetrator constructs a web of lies in order to deceive the other person. However, merely providing false information that the counterparty could verify without great effort does not constitute malicious behaviour.

  • Act with intent. The perpetrator must act with intent regarding all elements of the crime and must act with the intention of unlawfully enriching himself or a third party.

  • Cause an error. A finding of fraud further requires that the above actions or omissions cause an error as a result of which:

    • the defrauded party acts to the detriment of his or another's assets; and

    • suffers a corresponding damage.

Fraud in connection with the sale of securities

Fraud in connection with the sale of securities is primarily punishable under the crime of general fraud under Article 146 of the Criminal Code (see above, General fraud).

In addition, a fraudulent sale of securities usually involves the distribution of incorrect documentation. Depending on the circumstances of the case, the preparation or use of such documentation could constitute an illegal misstatement of material facts, which constitutes a form of forgery of documents.

An illegal misstatement of material facts is an incorrect written statement that violates generally valid and objective guarantees regarding the truthfulness of the document.

This is particularly relevant where either:

  • The person issuing the document has statutory duties of care in relation to the document.

  • Statutory law determines the contents of a document.

In connection with the sale of securities, incorrect statements in a prospectus may amount to a forgery of documents.

Fraud in connection with the sale of securities may also fall under the criminal provisions of the Collective Investment Schemes Act (CISA). The CISA contains provisions applicable to the sale of securities, such as the requirement to:

  • Obtain regulatory permits.

  • Have proper accounts.

  • Establish true and complete financial reports and prospectuses.

In addition, fraud in connection with the sale of securities may also breach the provisions of the Stock Exchange Act (SEA).

Accounting fraud

Accounting fraud is punishable pursuant to the general fraud provisions (see above, General fraud). However, accounting fraud frequently also involves the preparation of incorrect accounts and other financial documents. Depending on the circumstances of the case, this may constitute a forgery of documents.

For more information on directors and managers' duties and liabilities see the Practical Law Corporate Governance and Directors' Duties Multi-jurisdictional Guide.

 

Enforcement

3. Which authorities have the powers of prosecution, investigation, and enforcement in cases of corporate or business fraud? What are these powers and what are the consequences of non-compliance?

Authorities

The competent authority responsible for investigating corporate/business fraud is the Public Prosecutor's Office (PPO) of the competent Swiss canton. The PPOs of a number of cantons have specific units dedicated to the investigation of economic crimes.

For more information on the PPOs, see box: The regulatory authorities.

Prosecution powers

The prosecuting powers rest with the relevant PPO. In the case of corporate or business fraud, the cantonal PPO has jurisdiction, except for very specific cases, such as fraud committed by federal officials where the prosecution powers rest with the Office of the Attorney General of Switzerland (OAG). The PPO is frequently assisted in their investigations by specialised business crime units of the criminal police. The PPO is also responsible for bringing formal charges against the accused in the relevant criminal courts.

Powers in general

The relevant PPO has a wide range of powers at its disposal for gathering information, including the power to do the following:

  • Question accused persons, potential witnesses and other informants.

  • Involve experts.

  • Obtain access to further evidence such as objects, documents, reports and written information.

  • Conduct inspections.

The relevant PPO also has coercive powers at its disposal. These include the power to:

  • Request the attendance of persons for questioning and summon them if they do not appear voluntarily.

  • Search for suspects, detain them and keep them in pre-trial custody if the prerequisites are met.

  • Issue search warrants and search records, persons and objects.

  • Seize objects and assets, conduct secret surveillances (including the interception of mail and telecommunications), monitor bank accounts and conduct sting operations.

In some cases, such coercive measures must be ordered by the competent courts.

If the case at hand requires interaction with foreign authorities or regulators, the relevant PPO interacts with such authorities making use of the options available under the rules applicable to mutual legal assistance.

Powers of interview

The PPO has the right to summon and question any suspects, witnesses or so-called persons giving information. Where so provided by the cantonal laws, the PPO may also delegate interviews to the criminal police. The police can also initiate an investigation of a crime on its own motion, and question suspects and persons giving information. During the trial phase, the court can also question the accused, witnesses and persons giving information, although the courts rarely do so extensively, and tend to rely instead on the interrogation protocols already on record.

Powers of search/to compel disclosure

The relevant PPO can issue search warrants and search records, persons and objects, and may also seize objects and assets. The PPO can also order the production of data and documents instead of conducting a search, but will only do so if there is no risk that the owner of such data or documents may destroy them.

Court orders or injunctions

In principle, the relevant PPO can issue the compulsory measures that it deems appropriate. However, particularly severe compulsory measures need to be approved by a court order, including investigatory or pre-trial detention, the unsealing of confiscated data and documents (where the owner has requested their sealing), DNA profiling in the broader population, secret surveillance of communications, surveillance of bank accounts, and covert operations. Such court approval requires a short application in writing of the PPO which is usually granted within days.

Protections available

Orders and procedural acts of the PPO and the police, and court orders on coercive measures can, in principal, be appealed to the competent courts.

 

Penalties

4. What are the potential penalties or liabilities for participating in corporate or business fraud?

Civil/administrative proceedings or penalties

Fraud may lead to regulatory investigations and enforcement if it is committed in connection with an entity subject to regulatory supervision (for example, securities fraud engaged in by a bank may result in enforcement action by the Swiss Financial Market Supervisory Authority) (FINMA) (see box, The regulatory authorities).

Administrative sanctions include the following:

  • Disgorgement.

  • Occupational bans.

  • The withdrawal of any necessary licences to conduct business.

Sanctions imposed by the FINMA may be published (naming and shaming).

Criminal proceedings or penalties

Penalties. The following criminal sanctions apply:

  • Fraud: Custodial sentence of up to five years, or a monetary penalty.

  • Fraud committed for commercial gain: Custodial sentence of up to ten years, or a monetary penalty of not less than 90 daily penalty units.

A monetary penalty is calculated based on "daily rates". A daily rate is a monetary amount that is based on the specific perpetrator's financial situation. The number of daily rates depends on the perpetrator's degree of culpability.

Any individual can be liable for fraudulent offences, as can any person who aids or abets another in the commission of fraud. Corporations also face criminal liability, although only in very limited circumstances (see Question 27).

Right to bail. An accused may request to be released on bail from investigatory or pre-trial detention, if the reason for the detention is a risk of flight. The amount deposited may not only be used to ensure the presence of the accused at the trial, but also to cover any monetary penalty, fine, procedural costs or damages awarded to the injured party. There is no right to bail as such, the court will determine in its discretion whether bail is granted. In practice, bail is not very frequent.

Civil suits

An injured party can bring a civil lawsuit against the perpetrator to recover the damage and losses it suffered as a result of a crime.

Civil lawsuits are often brought before and adjudicated by the competent criminal court as part of the criminal proceedings. The criminal court may, however, refer complex civil suits to the civil courts. This option is frequently used by the criminal courts in cases involving white collar crimes.

Swiss law does not provide for class actions.

 

Bribery and corruption

Regulatory provisions and authorities

5. What are the main regulatory provisions and legislation relevant to bribery and corruption?

Criminal bribery and corruption offences are set out in the Criminal Code, which prohibits the following:

  • Active and passive bribery (Articles 322ter and 322quater).

  • Granting or accepting an undue advantage (Articles 322quinquies and 322sexies).

  • Bribery of foreign officials (Article 322septies).

The Unfair Competition Act prohibits bribery and corruption by private businesses and provides for both civil claims and criminal sanctions. Other than those provisions, there are no Swiss mandatory regulations or guidelines governing bribery and corruption. However, in practice a number of guidelines are regularly observed by businesses (such as the Organisation for Economic Co-operation and Development (OECD) Good Practice Guidance).

Bribery and corruption is investigated by the Swiss Office of the Attorney General (OAG), which investigates bribery and corruption offences where the offenses are:

  • Committed by or against federal authorities.

  • Substantially committed abroad.

  • Committed in several cantons, provided that there is no unambiguous focus in one canton.

In all other cases, the Public Prosecutor's Offices (PPOs) are responsible for investigating bribery and corruption.

For more information on the OAG and PPO, see box: The regulatory authorities.

 
6. What international anti-corruption conventions apply in your jurisdiction?

Switzerland's anti-corruption laws are in line with the relevant international conventions, the following of which Switzerland is a signatory to:

  • OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions 1997.

  • Council of Europe Civil Law Convention on Corruption 1999 (Civil Law Convention on Corruption).

  • UN Convention against Corruption 2003 (Corruption Convention).

 

Offences

7. What are the specific bribery and corruption offences in your jurisdiction?

Foreign public officials

Bribing foreign officials is prohibited, and both the bribing person and the foreign official accepting the bribe are liable under Swiss criminal law (Article 322septies, Criminal Code). According to this provision, it is a crime for:

  • Any person to offer, promise or grant a foreign official a bribe.

  • Any foreign official to solicit or accept a bribe.

A bribe is defined as the offer, promise or grant of an undue advantage. The bribe must be both:

  • In exchange for an act (or omission) of the official in violation of his duties or in the exercise of his discretion.

  • In connection with the foreign official's official activities/duties.

The advantage that is offered, promised or granted can either go to the official himself or to a third party. It is irrelevant whether:

  • The official indirectly benefits from an advantage granted to a third party if there is a link between the granted advantage and the official's breach of duty.

  • The advantage is granted in advance or afterwards as a reward.

The advantage granted must not be "due". For example, the advantage is not undue where it is legally owed (for example, in the case of the payment of ordinary administrative fees). If an advantage is contractually agreed, the agreement must be entered into at arm's length. This applies in particular to:

  • Commission arrangements.

  • Advisory contracts.

  • Loans.

Domestic public officials

Bribing domestic public officials is prohibited (Articles 322ter and 322quater, Criminal Code). The requirements are the same as for the bribery of foreign officials, with the only difference being that the official bribed must be a Swiss official (see above, Foreign public officials).

There is also a more general prohibition of offering, promising or granting officials an undue advantage, and soliciting/accepting such an advantage, where the advantage relates to his official activities (Articles 322quinquies and 322sexies, Criminal Code). Unlike bribery, the granting of the advantage does not have to influence the official's activities. Therefore, the offence prohibits "grooming" or "sweetening" officials in general.

Private commercial bribery

Bribery in the private sector is a crime (Articles 4a and 23, Unfair Competition Act). Bribery is committed where:

  • An employee, member of a company, representative or another auxiliary of a third party in the private sector is offered, promised or granted an advantage.

  • The advantage relates to actions carried out in breach of the individual's duties or in the exercise of his discretion.

  • There is a link between the granting of the advantage and the employment or business activity.

  • The advantage is undue. An advantage is not undue where it was contractually agreed (negligible advantages or advantages that reflect common social practices do not qualify).

  • Granting the undue advantage leads to a market distortion.

As with the bribery of officials, the recipient of the advantage is equally punishable.

 

Defences

8. What defences, safe harbours or exemptions are available and who can qualify?

There is no defence of indirect bribery. Therefore, it is irrelevant whether:

  • The official indirectly benefits from an advantage granted to a third party, provided that there is a link between the granted advantage and the official's breach of duty.

  • The advantage is granted in advance or afterwards as a reward.

There is no exemption for facilitation payments, whether made to domestic public officials or foreign officials. However, the Criminal Code provides two specific exceptions for advantages granted to officials (Article 322octies, Criminal Code):

  • First, the applicable regulations governing the conduct of officials may permit the acceptance of certain minor advantages, such as gifts (usually of under a certain value).

  • Second, negligible advantages that constitute common social practices are not prohibited.

The distinction between acceptable, minor advantages and those that exceed the acceptable value is difficult in practice and must be analysed on a case-by-case basis. There are no uniform rules that apply throughout Switzerland, as there are many different cantonal and local rules.

 
9. Can associated persons (such as spouses) and agents be liable for these offences and in what circumstances?

Any individual can be liable for these offences, whether or not the bribing person directly benefits from the act. Therefore, any associated person and/or agent can become liable for bribing an official.

Under the general principles of criminal law, any person aiding and abetting or instigating bribery is also punishable (Articles 24 to 25, Criminal Code).

 

Enforcement

10. Which authorities have the powers of prosecution, investigation, and enforcement in cases of bribery and corruption? What are these powers and what are the consequences of non-compliance?

The regulator's powers of investigation, enforcement and prosecution are the same as with respect to fraud (see Question 3). For more information on the relevant Public Prosecutor's Office (PPO), see box: The regulatory authorities.

Prosecution powers

The jurisdiction for prosecuting bribery and corruption usually lies with the cantonal PPO. However, bribery and corruption of federal officials is subject to federal jurisdiction, as is bribery and corruption that is substantially committed abroad or where no unambiguous focus in one canton exists.

Powers of interview

See Question 3.

Powers of search/to compel disclosure

See Question 3.

Court orders or injunctions

See Question 3.

Protections available

See Question 3.

 

Penalties

11. What are the potential penalties for participating in bribery and corruption?

Civil/administrative proceedings or penalties

Bribery and corruption may give rise to regulatory investigations if they occur in a company subject to regulatory supervision.

Aside from regulated industries such as the financial services sector, civil remedies or state sanctions against individuals or corporate bodies are generally not recognised under Swiss law. However, in the case of private commercial bribery, any injured party can sue for damages and restitution/disgorgement.

Criminal proceedings or penalties

Penalties. The sanction for bribing a Swiss or a foreign official, or for a Swiss or foreign official accepting a bribe, consists of either a:

  • Custodial sentence of up to five years.

  • Monetary penalty.

The sanction for granting or accepting an advantage consists of either:

  • Custodial sentence of up to three years.

  • Monetary penalty.

The sanction for private commercial bribery is a custodial sentence of up to three years or a monetary penalty. The offence is only prosecuted on explicit demand from the victim or any other party that is entitled to file civil claims.

Under certain circumstances, enterprises can be fined up to CHF5 million.

Right to bail. See Question 4.

 

Tax treatment

12. Are there any circumstances under which payments such as bribes, ransoms or other payments arising from blackmail or extortion are tax-deductible as a business expense?

The tax-deductibility of bribery payments to officials is expressly excluded under Swiss law. However, this prohibition does not cover the deductibility of ransom, blackmail or extortion payments by corporate tax payers as a business expense. While there is no precedent for doing so, such deductions are likely to be possible.

 

Insider dealing and market abuse

Regulatory provisions and authorities

13. What are the main regulatory provisions and legislation relevant to insider dealing and market abuse?

Insider dealing and market manipulation are prohibited from a regulatory perspective (Articles 33e, 33f, Stock Exchange Act (SEA)) as well as criminally sanctioned (Articles 40, 40a, SEA).

 

Offences

14. What are the specific insider dealing and market abuse offences?

Insider dealing

Insider dealing relates to the abuse of confidential, correct information. The crime involves an insider intentionally obtaining a financial benefit by exploiting his knowledge of material non-public, price-sensitive, information on shares or options of listed companies in Switzerland.

Article 40 Stock Exchange Act (SEA) distinguishes three categories of insiders:

  • Primary insiders. These are persons with qualified access to insider information (such as members of the board or the executive management or persons having access to insider information in their capacity as shareholders).

  • Secondary insiders. These are persons who obtain insider information from a primary insider (tipees).

  • Accidental insiders. This can be another person that obtained insider information.

An intentional distribution and abuse of incorrect information is punishable as market abuse but not as insider dealing (see below, Market abuse).

Market abuse

The criminal law provisions governing market manipulation seek to protect market confidence and equality for investors in connection with securities listed on a Swiss stock exchange.

A person is guilty of market manipulation if he wilfully and knowingly either (Article 40a, SEA):

  • Distributes false or misleading information (market rigging) with the intent of both significantly influencing the price of securities and procuring an illegal profit.

  • Engages in sham transactions (such as wash sales or matched orders) with the intent of both significantly influencing the price of securities and procuring an illegal profit. Sham transactions are defined as executions of sales and purchases of securities that are directly or indirectly made on account of the same person or a number of people who are only associated for the (illegal) purpose (pool).

Other behaviour that influences the price of securities, either intentionally or unintentionally (such as other price stabilisation measures) is not covered by the Criminal Code.

The scope and application of the criminal law provisions against market manipulation are not clear, in particular as to the precise difference between legal market stabilisation and illegal market manipulation.

 

Defences

15. What defences, safe harbours or exemptions are available and who can qualify?

Criminal law does not provide for any statutory safe harbours or exemptions for insider dealing and market manipulation. However, the regulatory provisions contain certain exceptions (Articles 33e( 2) and 33f(2), Stock Exchange Act (SEA)). It is widely accepted that these exceptions also apply to the criminal law provisions.

These exceptions particularly concern transactions executed in preparation for a public tender. It is generally accepted that a person's decision to enter into a transaction does not create insider information in the sense of the insider dealing offence with respect to that person. This safe harbour is often referred to as the principle of "no one can be his own insider". For example, this principle would apply to a bidder purchasing securities of the target before publicly announcing its own public tender offer for the target's shares. Further exceptions concern transactions made for the purpose of price management and stabilisation, or in the course of repurchase programmes.

 

Enforcement

16. Which authorities have the powers of prosecution, investigation, and enforcement in cases of insider dealing and market abuse? What are these powers and what are the consequences of non-compliance?

Authorities

The competent authority responsible for criminal proceedings related to insider dealing or market abuse is the OAG. Violations of administrative regulations are prosecuted by the Financial Market Supervisory Authority (FINMA). For more information on the OAG and FINMA, see box: The regulatory authorities.

Prosecution powers

The public prosecutor's powers of investigation, enforcement and prosecution are the same as with respect to fraud (see Question 3).

FINMA may carry out inspections at a financial intermediary's business (see Question 21). Further, FINMA may request additional information, open formal proceedings against supervised entities, determine breaches of the law, issue professional bans, publish its decisions and, as the ultima ratio, withdraw the licence to operate the business (see Articles 29-37, FINMASA).

Wilful non-compliance with FINMA's orders may be punished with a fine of up to CHF100,000.

Anyone who wilfully provides false information to FINMA may be sanctioned with a custodial sentence of up to three years or monetary penalties of up to CHF1.08 million.

Powers of interview

SeeQuestion 3.

Powers of search/to disclosure

See Question 3.

Court orders or injunctions

See Question 3.

Protections available

See Question 3.

 

Penalties

17. What are the potential penalties for participating in insider dealing and market abuse?

Civil/administrative proceedings or penalties

FINMA has broad powers to investigate and sanction any breach of the insider dealing and market abuse provisions of the SEA, including obtaining the relevant evidence, determining regulatory breaches, publishing its decision and ordering the disgorgement of unlawful profits. These sanctions apply whether or not the involved persons are subject to regulatory supervision.

If the criminal acts are carried out within an enterprise subject to regulatory supervision, such as market traders regulated in accordance with the SEA or financial institutions supervised by FINMA, further sanctions may be ordered, such as

  • Occupational bans.

  • The withdrawal of licences necessary to conduct business.

Criminal proceedings or penalties

Penalties. The sanctions for insider dealing and market abuse are:

  • For primary insiders and market abuse:

    • a custodial sentence of up to three years; or

    • monetary penalties of up to CHF1.08 million.

  • For primary insiders obtaining a financial gain in excess of CHF1 million:

    • a custodial sentence of up to three years; or

    • monetary penalties of up to CHF1.08 million.

  • For secondary insiders:

    • a custodial sentence of up to one year; or

    • monetary penalties of up to CHF1.08 million.

  • For accidental insiders: a fine of up to CHF10,000.

Right to bail. See Question 4.

Civil suits

An injured party can bring a lawsuit against the perpetrator to recover the damage and losses it suffered as result of a crime. While civil claims may also be brought before the competent criminal court as part of the criminal proceedings, they are in practice usually referred to the civil courts for adjudication.

 

Money laundering, terrorist financing and financial/trade sanctions

Regulatory provisions and authorities

18. What are the main regulatory provisions relevant to money laundering, terrorist financing and/or breach of financial/trade sanctions?

Main regulatory provisions

Switzerland's legislation on money laundering and terrorist financing has been progressively expanded over the last decade and is currently among the most rigorous in the world. Its objectives include:

  • Protecting Switzerland's integrity and reputation as a financial centre.

  • Ensuring the fair fulfilment of the centre's economic functions.

The regulatory framework of Switzerland's fight against money laundering, terrorist financing and financial/trade sanctions consists of the following provisions:

  • Money laundering. Money laundering is prohibited. It is defined as an act aimed at frustrating the identification of the origin, the tracing or the forfeiture of assets which one knows or must believe originate from a felony (Article 305bis, Criminal Code).

    Persons who, on a professional basis, accept, keep on deposit or assist in the investment or sale of assets belonging to a third party, face criminal liability if they fail to establish the identity of the beneficial owner of the assets with sufficient diligence (Article 305ter, Criminal Code).

  • Terrorist financing. It is a crime to support a criminal organisation (Article 260ter, Criminal Code). In addition, there are criminal sanctions for accumulating or making available assets with the intent of financing a violent criminal act aiming to intimidate the population or to compel a state or an international organisation to perform or abstain from performing an act (Article 260quinquies, Criminal Code).

To prevent money laundering and terrorist financing, Switzerland introduced the Anti-Money Laundering Act (AMLA) and related implementing regulations under administrative law. The Act and the regulations introduced various due diligence obligations for financial intermediaries such as:

  • Strict know-your-customer rules.

  • A duty to report activities that are suspected of being for the purpose of money laundering and terrorist financing.

Financial intermediaries are defined to include (Article 2, AMLA):

  • Banks.

  • Securities dealers.

  • Fund managers that manage share accounts or distribute shares in collective investment schemes.

  • Insurance institutions that deal in direct life insurance or offer or distribute shares in collective investment schemes.

  • Casinos.

  • Other entities and persons operating in the non-banking sector, such as lawyers or hotel managers, provided they accept or hold on deposit assets belonging to a third party or assist in the investment or sale of assets belonging to a third party in a professional capacity.

As part of its implementing provisions, the AMLA also governs the Swiss supervision and self-regulation regime. Financial intermediaries that are not subject to a supervisory authority (such as financial intermediaries that are not banks or insurance companies) must either:

  • Obtain authorisation directly from the Swiss Financial Market Supervisory Authority (FINMA).

  • Become a member of a recognised self-regulatory organisation (SRO).

Each SRO is subject to FINMA regulation and supervision, which includes FINMA's approval of the regulations the SROs impose on their members.

A bank's board of directors and executives must ensure "irreproachable business conduct". This requires them to observe the due diligence provisions designed to combat money laundering and/or terrorist financing (Swiss Banking Act).

Financial/trade sanctions

The Federal Council may implement financial/trade sanctions which aim at securing compliance with international law, including in particular human rights, and which have been ordered by:

  • The United Nations.

  • The Organisation for Security and Cooperation in Europe.

  • Switzerland's most significant trading partners.

The Federal Council may further implement financial/trade sanctions to protect Switzerland's interests.

The State Secretariat for Economic Affairs (SECO) is responsible for enforcing the financial/trade sanctions laws.

 

Offences

19. What are the specific offences relating to money laundering, terrorist financing and breach of financial/trade sanctions?

Money laundering

Offences under the Criminal Code. Money laundering includes any act that conceals or disguises assets of criminal origin or that have been obtained through crime, by giving the impression that the funds have been obtained legally (see also Question 18).

The assets must originate from a felony in the sense of Article 10 of the Criminal Code (that is, an offence carrying a custodial sentence which exceeds three years). Criminal sanctions apply to persons who, on a professional basis, accept, keep on deposit, or assist in the investment or sale of assets belonging to a third party if they fail to ascertain the identity of the beneficial owner of the assets with due care (Article 305bis, Criminal Code). The due diligence obligations are specified in the AMLA.

Financial intermediaries must verify their customers' identity on the basis of documents with evidentiary value. If the customer is not the beneficial owner or if there is any doubt about the matter, the financial intermediary must obtain a written declaration from the customer indicating who the beneficial owner is. The same applies if the customer is a domiciliary company.

Offences under the Anti-Money Laundering Act (AMLA)/ Anti-Money Laundering Ordinance (AMLO). Financial intermediaries who operate without being subject to a supervisory authority and without being authorised by FINMA or affiliated with an SRO risk a criminal sanction under administrative law (Article 44, Financial Market Supervision Act (FINMASA)).

If a financial intermediary fails to submit a suspicious activity report to the MROS (as required under the AMLA) the intermediary will be subject to a fine (Article 37, AMLA). The report must be filed whenever a professional financial intermediary knows or has reasonable grounds to suspect that assets involved in the business relationship:

  • Constitute the proceeds of money laundering.

  • Originate from another crime under the Criminal Code.

  • Are subject to the power of disposal of a criminal organisation.

  • Serve the financing of terrorism.

Further, a report must be filed if the financial intermediary terminates negotiations aimed at establishing a business relationship because of a reasonable suspicion as defined above.

Finally, a financial intermediary commits an offence if it violates the following regulatory duties:

  • The duty to immediately freeze assets entrusted to the financial intermediary upon the filing of a suspicious activity report. The financial intermediary must continue to freeze the assets until it receives an order from the competent prosecuting authority, but for a maximum duration of five working days from the time at which the report is filed with the MROS.

  • The duty to clarify the economic background and purpose of unusual transactions. Clarification is also required if there are indications that assets are the proceeds of a felony or connected to a terrorist financing offence.

Terrorist financing

Financing terrorism is prohibited under Article 260quinquies of the Criminal Code. Financing terrorism is understood as any collection or provision of funds with a view to financing a violent crime that is intended to intimidate the public or to coerce a state or international organisation into carrying out or not carrying out an act.

No mens rea exists if the perpetrator does not know with certainty that the funds are to be used to finance terrorism.

Financial/trade sanctions

A breach of the laws issued by the Federal Council that implements trade/financial sanctions is subject to criminal prosecution pursuant to the Federal Act on the Implementation of International Sanctions.

 

Defences

20. What defences, safe harbours or exemptions are available and who can qualify?

In general, justifications such as necessity or legitimate self-defence only play a marginal role in money laundering and terrorist financing offences. However, certain specific exclusions apply.

Money laundering

Financial intermediaries are exempted from due diligence requirements in long-term business relationships if both (de minimis rule, Article 7a, Anti-Money Laundering Act (AMLA)):

  • The assets involved are low in value.

  • There is no suspicion or indication of possible money laundering or financing of terrorism.

Terrorist financing

There are specific statutory exemptions from terrorist financing offences where either (Article 260quinquies, Criminal Code):

  • The act is carried out with a view to (re)establishing a democratic regime or a state governed by the rule of law, or with a view to exercising or safeguarding human rights.

  • The financing is intended to support acts that do not violate the rules of international law on the conduct of armed conflicts.

 

Enforcement

21. Which authorities have the powers of prosecution, investigation, and enforcement in cases of money laundering? What are these powers and what are the consequences of non-compliance?

Authorities

For offences based on breaches of the Criminal Code, Swiss prosecutors are responsible for conducting investigations. The competent prosecutor is either:

  • The Swiss Office of the Attorney General (OAG).

  • The Public Prosecutor's Offices (PPOs).

For financial services providers, FINMA is the principal regulator/supervisor and is responsible for supervising their compliance with the due diligence obligations imposed by the AMLA.

For financial intermediaries operating in the non-banking and non-insurance sector, the organisation's SRO is responsible for general supervision. FINMA or the SROs consistently pursue all serious violations of obligations by either:

  • Initiating proceedings themselves within the scope of application of FINMA's Anti-Money Laundering Ordinance (AMLO).

  • Notifying the criminal prosecuting authorities responsible for pursuing such cases.

Parallel administrative and criminal proceedings are possible.

During the preliminary stage of its administrative proceedings, either FINMA or the SRO will decide whether the provisions of the Criminal Code have been violated. In doing so, they are not tied to the interpretation of the criminal courts, but can set more stringent regulatory standards.

The Money Laundering Reporting Office Switzerland (MROS) is responsible for receiving and assessing the reports of suspected money laundering by financial intermediaries. It effectively performs a preliminary assessment to dismiss reports lacking in substance and forwards the remaining cases of suspected money laundering on to the appropriate prosecuting authorities. The MROS is managed by the Federal Office of the Police.

See also box, The regulatory authorities.

Prosecution powers

To supervise the intermediaries' compliance with the financial due diligence obligations imposed by the Anti-Money Laundering Act (AMLA), the Financial Market Supervisory Authority (FINMA) may:

  • Carry out on-the-spot inspections at the financial intermediary's business premises or instruct an audit company to conduct the inspection.

  • For the self-regulatory authorities (SROs) of lawyers and notaries, instruct an audit company to carry out the inspections in the case of the SROs of lawyers and notaries. Such an audit company must observe the same professional secrecy obligations as the lawyers and notaries.

For the powers of the public prosecutors, see Question 3.

For the further powers of FINMA, see Question 16.

See also box, The regulatory authorities.

Powers of interview

SeeQuestion 3.

Powers of search/to compel disclosure

See Question 3.

Court orders or injunctions

See Question 3.

Protections available

See Question 3.

 

Penalties

22. What are the penalties for participating in money laundering, terrorist financing offences and/or for breaches of financial/trade sanctions?

Civil/administrative proceedings or sanctions

The Financial Market Regulatory Authority (FINMA) can issue tough sanctions that may include withdrawing the business licence from a supervised intermediary, which will result in the business being liquidated if the intermediary (Article 37, Financial Market Supervisory Act (FINMASA)):

  • Does not fulfil the necessary requirements for its activity or seriously violates the supervisory provisions.

  • Without proper authorisation, performs activities which require supervision from the FINMA.

In such cases, the financial intermediary will also be subject to criminal sanctions under the FINMASA (see below, Criminal proceedings).

If members of the board or top executive management of a FINMA-regulated intermediary are responsible for serious breaches of due diligence obligations or organisational inadequacies in combating money laundering, they risk being restricted in, or prohibited from, performing their current and/or future functions on behalf of an intermediary for a period up to five years (Article 33, FINMASA).

Money laundering

Criminal sanctions under the Criminal Code. The following criminal sanctions apply:

  • Money laundering (Article 305bis, Criminal Code):

    • custodial sentence of up to three years; or

    • monetary penalty of up to CHF1.08 million;

    In severe cases of money laundering (for example, if the perpetrator acts as a member of a criminal organisation or creates a large turnover or substantial profit) the custodial sentence may be of up to five years and must be combined with a monetary penalty of up to CHF1.5 million.

  • Insufficient diligence in financial transactions by financial intermediaries (Article 305ter, Criminal Code):

    • custodial sentence of up to one year; or

    • monetary penalty of up to CHF1.08 million.

In addition to a custodial sentence and a monetary penalty, Swiss courts can order the forfeiture of assets that have been acquired through, or are intended to be used in, the commission of a crime or as payment.

This also applies to all assets subject to the power of disposal of any criminal organisation, which is presumed in the case of the assets of a person who supports a criminal organisation, until the contrary is proven.

Any Swiss criminal prosecution for the violation of the Criminal Code is usually directed solely against the individual perpetrators, not against the legal entity (see Question 27).

Criminal sanctions under the FINMASA and the Anti-Money Laundering Act (AMLA). The following criminal sanctions apply where a:

  • Financial intermediary operates without a licence or without FINMA authorisation (Article 44, FINMASA):

    • custodial sentence of up to three years; or

    • monetary penalty of up to CHF1.08 million for individuals, or a fine of up to CHF5 million for legal entities;

  • Financial intermediary violates its duty to report suspicious transactions. This is punishable with fines of up to (Article 37, AMLA):

    • CHF500,000; or

    • CHF150,000, where the perpetrator acted negligently.

In cases of negligence, a fine of up to CHF250,000 can be imposed. Where there is a prior conviction and the offence is repeated within five years, the monetary penalty must be calculated based on at least 45 daily rates (see Question 4) and the fine must be at least CHF10,000.

In addition to the above sanctions, the FINMA can seize from the financial intermediary, its executives, or members of its board of directors any funds that were obtained through severe violations of supervisory regulations.

Right to bail. See Question 4.

Terrorist financing

Penalties. The following criminal sanctions apply:

  • Intentionally financing terrorism (Article 260quinquies, Criminal Code):

    • custodial sentence of up to five years; or

    • monetary penalty of up to CHF1.08 million.

  • Intentionally providing funds to a criminal organisation (Article 260ter, Criminal Code):

    • custodial sentence of up to five years; or

    • monetary penalty of up to CHF1.08 million. The court may impose a lower penalty if the perpetrator makes an effort to foil the criminal activity of the organisation.

Right to bail. See Question 4.

Financial/trade sanctions

Penalties. The following criminal sanctions apply:

  • Wilful breach of financial/trade sanctions provisions is punishable by a custodial sentence of up to one year or monetary penalty of up to CHF500,000 (Article 9, Federal Act on the Implementation of International Sanctions). In serious cases, a custodial sentence of up to five years applies, which may be combined with a monetary penalty of up to CHF100,000.

  • In case of a negligent breach of financial/trade sanctions, a custodial sentence of up to three months or a monetary penalty of up to CHF100,000 may be imposed.

  • Refusal to provide information, produce documents or grant access to business premises for inspections, or the provision of false or misleading information is punishable by a monetary penalty of up to CHF100,000 (Article 10, Federal Act on the Implementation of Internal Sanctions).

  • In case of a negligent commission of the offence, a monetary penalty of up to CHF40,000 may be imposed.

Right to bail. See Question 4.

 

Financial record keeping

23. What are the general requirements for financial record keeping and disclosure?

Anyone conducting commercial business must properly keep and preserve records of its accounts as necessary in order to properly reflect the financial situation of the business and determine liabilities and claims in connection with them.

More detailed and specific provisions apply to public and private limited companies, for example:

  • Financial records and underlying documents must be preserved for a period of ten years.

  • Financial statements must be disclosed to the company's shareholders and, in the case of listed companies, to the public.

In addition, a private company may be required to disclose financial records in criminal investigations and administrative proceedings.

 
24. What are the penalties for failure to keep or disclose accurate financial records?

Failure to keep or disclose accurate financial records may render the following persons civilly and criminally liable:

  • Responsible board members.

  • Responsible managers of the company.

  • The company itself.

Civil liability includes liability for damages. In addition, corporate resolutions based on inaccurate financial records may be declared void.

Potential criminal liability includes liability for failure to keep proper accounts and forgery of documents. The sanction consists of a custodial sentence of up to five years or a monetary penalty. Listed companies further risk sanctions from the stock exchange.

 
25. Are the financial record keeping rules used to prosecute white-collar crimes?

White-collar crimes, such as fraud and bribery, may involve the violation of financial record keeping rules. In addition, criminal offences such as the forgery of documents will likely be committed in connection with conduct qualifying as fraud or bribery. In such a case, the perpetrator will be liable for both:

  • Fraud or bribery.

  • Forgery of documents (see Question 2).

However, unlike in certain jurisdictions, the financial record keeping rules are not intended to serve as catch-all provisions to remedy evidentiary difficulties in the prosecution of white-collar crimes.

 

Due diligence

26. What are the general due diligence requirements and procedures in relation to corruption, fraud or money laundering when contracting with external parties?

Corruption and fraud

Swiss companies are generally required to implement and monitor reasonable organisational measures necessary to prevent criminal activities from being committed within the company or by the company (Article 102, Criminal Code). In particular, these crimes include corruption and money laundering.

In this regard, criminal conduct may, under certain circumstances, be qualified as being committed "within the company" if the relevant acts are committed (in whole or in part) on behalf of the company (including by external consultants). Therefore, necessary and reasonable organisational measures will generally include the requirement that reasonable due diligence be carried out when contracting with external parties (among other things).

Swiss authorities rely on international compliance standards to assess whether a company has implemented and monitored the necessary and reasonable organisational measures (see Question 5).

Money laundering

More specific provisions apply to the prevention of money laundering. In particular, financial intermediaries must ascertain the identity of the beneficial owner of the asset (Article 4, Anti-Money Laundering Act (AMLA); Article 305ter, Criminal Code). In addition, a person must not accept an asset if he knows or suspects that it has originated from a felony (Article 305bis, Criminal Code).

Good market practice includes carrying out reasonable due diligence and regular audits on the contracting party. This requires:

  • The negotiation of the contractual right to perform audits.

  • Being granted access to the responsible persons at the contracting party to ask any relevant questions.

In addition, it is considered necessary for a company to both:

  • Establish, monitor and enforce a code of conduct prohibiting illegal conduct.

  • Impose the above duties on the contracting party and require the contracting party to comply with the principles underlying the company's code of conduct.

 

Corporate liability

27. Under what circumstances can a corporate body itself be subject to criminal liability?

Criminal liability of an enterprise exists only in limited circumstances. All legal entities under private law, certain legal entities of public law, partnerships as well as single-member companies may be held criminally liable.

An enterprise may become criminally liable if:

  • A crime is committed in the exercise of the enterprise's business activities and the person who committed the crime cannot be identified as a result of the enterprise's insufficient organisation (Article 102(1), Criminal Code).

  • One of the following crimes was committed and the enterprise failed to take all necessary organisational measures to prevent it, regardless of whether the individual perpetrator can be identified and punished (Article 102(2), Criminal Code). Such crimes include:

    • participation in a criminal organisation;

    • the financing of terrorism;

    • money laundering;

    • active bribery of a domestic or a foreign official; and

    • bribery in the private sector.

If a legal entity is found guilty, it is punished with a fine of up to CHF5 million.

A legal entity may also be required to pay a fine of up to CHF5,000 under administrative criminal law for the wrongdoing of its officers or employees, if identifying the responsible individual would be unduly burdensome.

For violations of financial regulations such as the Financial Market Supervisory Act (FINMASA), the fine may be up to CHF50,000.

 

Cartels

28. Are cartels prohibited in your jurisdiction? How are cartel offences defined? Under what circumstances can a corporate body be subject to criminal liability for cartel offences?

Cartels are prohibited in Switzerland. Under the Federal Act on Cartels and other Restraints of Competition (Cartel Act), cartel conduct consists in unlawful agreements affecting competition and in unlawful practices by dominant undertakings.

On one hand, agreements that significantly restrict competition in a market for specific goods or services and are not justified on the grounds of economic efficiency, and all agreements that eliminate effective competition, are unlawful. Some types of agreement are presumed to lead to the elimination of effective competition:

  • Agreements between actual or potential competitors (horizontal agreements) on direct or indirect price-fixing, on the limitation of quantities of goods or services or on the allocation of markets geographically or according to trading partners.

  • Agreements between undertakings at different levels of the production chain (vertical agreements) regarding fixed or minimum prices and the prohibition of passive sales in distribution contracts.

On the other hand, dominant undertakings behave unlawfully if, by abusing their position in the market, they hinder other undertakings in their efforts to start or continue to compete, or disadvantage trading partners (abuse of a dominant position).

Sanctions are imposed by the Swiss Competition Commission (ComCo), the decision-making authority which is primarily entrusted with enforcing Swiss competition law. The ComCo Secretariat is the investigative authority which assists the ComCo in the preparation of its decision. Sanctions (fines) can be imposed on companies for participation in an unlawful agreement and for the abuse of a dominant position in the sense. In addition, sanctions can be imposed for the breach of an amicable settlement, a final and non-appealable ruling of the competition authorities, or a decision of an appellate body.

The maximum amount of fines is 10% of the (group) turnover achieved by the company (and its group) in Switzerland in the preceding three financial years. In determining the amount of the fine, due account must be taken of the profit likely to have resulted from the unlawful behaviour.

Swiss competition law does not provide for the imprisonment of company employees (such as managers or employees participating in a cartel). Criminal sanctions can be imposed against company employees for wilful violations of an amicable settlement, a final and non-appealable ruling of the competition authorities or a decision of an appellate body (a fine not exceeding CHF100,000). Conversely, the wilful violation of competition law by participation in an unlawful agreement or in an abuse of a dominant position does not give rise to sanctions against employees, only against the company.

Decisions by the ComCo are subject to judicial review by the Federal Administrative Court. The Federal Administrative Court has full jurisdiction to review the ComCo's findings of fact, legal assessment and sanctions, under all aspects of fact and law. However, the Federal Administrative Court exercises restraint with regard to the review of technical factual questions. The decision of the Federal Administrative Court is subject to a further appeal to the Federal Supreme Court.


 

Immunity and leniency

29. In what circumstances is it possible to obtain immunity/leniency for co-operation with the authorities?

Swiss courts traditionally reward confessions and co-operative behaviour during the investigation with a substantial reduction of the penalty. At any time before bringing charges, the accused can request accelerated proceedings to be conducted by the public prosecutor if the accused:

  • Admits the matters essential to the legal appraisal of the case.

  • Recognises, if only in principle, any civil claims.

Accelerated proceedings have a shorter duration, less publicity and lower costs. However, accelerated proceedings are not possible if the public prosecutor requests a custodial sentence of more than five years.

In anti-trust law, the Cartel Act Sanctions Ordinance details how penalties are determined and to what extent voluntary co-operation can mitigate or exclude any fines. Similarly, in tax law, voluntary disclosure may also lead to a mitigation or exclusion of punishment, depending on the circumstances of the case.

 

Cross-border co-operation

30. What international agreements and legal instruments are available for local authorities?

Obtaining evidence

Swiss authorities can request legal assistance from foreign jurisdictions in obtaining evidence for ongoing criminal proceedings, to the same extent that Switzerland would itself grant such assistance to the foreign state.

Switzerland also has a range of multilateral and bilateral treaties in place with various states. These treaties provide a legal basis for obtaining evidence from foreign jurisdictions. The most important multilateral treaties are the:

  • European Convention on Mutual Assistance in Criminal Matters 1959 (Convention on Mutual Assistance in Criminal Matters) and EC Convention on Mutual Assistance in Criminal Matters between the member states 2000.

  • EC Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime 1990 (Laundering, Search, Seizure and Confiscation Convention).

  • Convention Implementing the Schengen Agreement 1990.

  • Co-operation Agreement between the European Community and its Member States, on the one part, and the Swiss Confederation, on the other part, to combat fraud and any other illegal activity to the detriment of their financial interests 2004.

On a bilateral level, Switzerland has concluded amendment agreements to the European Convention on Mutual Assistance in Criminal Matters with its neighbour states Germany, Austria, France and Italy. These agreements simplify and expedite the legal assistance proceedings.

In addition, Switzerland has bilateral treaties on mutual assistance in criminal matters in place with many jurisdictions, including Algeria, Australia, Brazil, Canada, Ecuador, Egypt, Hong Kong, Mexico, Peru, Philippines and the US. These treaties provide a basis for obtaining evidence.

Seizing assets

Swiss authorities can seize assets obtained from criminal activities. The authorities can also request assistance from overseas jurisdictions in seizing assets, provided Switzerland would also provide such assistance to the overseas jurisdiction if requested.

Switzerland is signatory to a range of multilateral treaties for the seizure of assets in overseas jurisdictions, including the:

  • Convention on Mutual Assistance in Criminal Matters.

  • Laundering, Search, Seizure and Confiscation Convention.

  • UN Convention against Transnational Organised Crime 2000.

Some of the bilateral treaties on mutual assistance in criminal matters that Switzerland has concluded with foreign jurisdictions provide for the seizure of assets obtained from criminal activity, including the treaties in place with Australia, Austria, Brazil, Egypt, France, Germany, Hong Kong, Italy, Mexico, Philippines and the US. In addition, Switzerland concluded a letter agreement on the sharing of seized assets in money laundering cases with Japan.

Sharing information

If there is no assistance request, the Swiss authorities may share with foreign regulators information and evidence they have obtained in the course of their investigation if this would either:

  • Permit the opening of foreign criminal investigations.

  • Facilitate an ongoing foreign criminal investigation.

Subject to the authorisation by the Federal Office of Justice, the sharing of such information is also permitted with foreign regulators of countries with which no bilateral or multilateral treaty on mutual assistance is in place.

 
31. In what circumstance will domestic criminal courts assert extra-territorial jurisdiction?

As a general rule, Swiss courts only have jurisdiction if the crime was committed, or had its effects, on the territory of Switzerland.

However, crimes against the Swiss state or national security may be prosecuted by Swiss law enforcement authorities even if committed abroad.

Further, Swiss criminal law applies to any person located in Switzerland that is not extradited and has committed any of the following offences abroad:

  • Certain offences against minors.

  • Offences that Switzerland is obliged to prosecute pursuant to an international treaty or, under certain circumstances.

  • Offences for which Swiss law permits the extradition.

The OAG further takes the position that it has jurisdiction to prosecute the bribery of foreign public officials involving a Swiss parent company even if, for example, the bribery took place in a foreign jurisdiction and was committed by an employee of a foreign subsidiary of the Swiss company.

 
32. Does your jurisdiction have any statutes aimed at blocking the assertion of foreign jurisdictions within your territory? Are there statutes aimed at blocking the assertion of foreign jurisdictions within their territory?

Swiss law includes criminal law provisions that block the assertion of foreign jurisdiction within Swiss territory. The primary provision is Article 271 of the Criminal Code, which criminalises "forbidden services for foreign states" if:

  • The act is performed for a foreign state.

  • It is reserved to authorities or officials.

  • It is committed on Swiss territory.

  • It is performed without authorisation.

Article 271 of the Criminal Code protects Switzerland's territorial sovereignty and aims in particular at preventing states or parties from circumventing international conventions on mutual legal assistance. A breach of this provision may be punished by a custodial sentence of up to three years or a fine of up to CHF1.08 million, and in severe cases, by a custodial sentence of not less than one year.

In addition, Swiss law stipulates several further restrictions that must be observed by individuals and entities when providing information directly to foreign authorities such as:

  • The criminal law provision on economic espionage, which is designed to protect the Swiss public and economic interest and makes it a crime to disclose manufacturing or business secrets (Article 273, Criminal Code; similarly Article 162, Criminal Code).

  • The Swiss bank customer secrecy laws (Article 47, Banking Act).

  • Data protection laws.

 

Whistleblowing

33. Are whistleblowers given statutory protection?

At present, there is no specific statutory protection for whistleblowers. Therefore, employees who report cases of serious/illegal malpractice within a company to the public face a high level of legal uncertainty.

Under Swiss employment law, employees must carry out the work assigned to them with due care and loyally safeguard the employer's legitimate interests. This duty provides the basis for how an employee should act in a specific situation to balance legally protected interests (for example, the duty to observe business secrets).

The wrongful dismissal of a whistleblower does not make the dismissal null and void (for example, there is no re-employment), but the employer who terminates the employment relationship unlawfully must pay a compensation to the employee. The court determines the compensation, taking due account of all the circumstances. However, the compensation must not exceed an amount equivalent to six months of the employee's salary.

See also Question 33, Whistleblowers.

 

Reform, trends and developments

34. Are there any impending developments or proposals for reform?

Whistleblowers

The Swiss government has proposed a new law to the Parliament to clarify the legal protection of employees.

Under the proposed rules, an employee would in principle have to first escalate his concerns internally, and would only then be entitled to contact the authorities if the employer fails to take appropriate measures within a defined time period.

An employee would only be allowed to contact the authorities directly under exceptional circumstances, for example, where public or criminal law has been breached and any of the following applies:

  • It is foreseeable that the employer will not take the appropriate steps.

  • An internal escalation would result in an obstruction of the authorities' investigation.

  • An immediate threat to life, health, safety or the environment exists.

Contacting the media would only be permissible as a measure of last resort if the authorities fail to update the employee on their actions.

The proposed law does not change the law regarding dismissals of whistleblowers (see Question 32). The Swiss parliament has in principle supported the proposed law, but requested the government to simplify it.

Anti-corruption legislation

The Swiss parliament has recently amended the anti-corruption legislation.

Apart from minor amendments to the criminal provisions on the bribery of public officials, the Swiss parliament introduced new criminal provisions on bribery in the private sector into the Swiss criminal code. At present, bribery in the private sector was punishable only upon request and only if led to a market distortion (see Question 7). According to the new provisions, the bribing person and the private person accepting a bribe would in principle be prosecuted ex officio and independent of whether the bribery leads to a market distortion. An exception applies to minor cases which are prosecuted only upon request of the injured party. The new law has not yet entered into force.

 

Market practice

35. What are the main steps foreign and local companies are taking to manage their exposure to corruption/corporate crime?

In relation to its size, Switzerland is home to a significant number of global companies, including two of the world's largest banks. These companies constantly benchmark their best practices across jurisdictions and upgrade their internal organisations and procedures accordingly. Other Swiss companies benefit from their experience, which is shared informally, through employees moving from one employer to another, and through industry organisations.

Swiss companies typically use the following compliance frameworks to manage their risk exposure to white collar crimes:

  • Policies and directives. This involves governing the use of inside knowledge, anti-money laundering risks and compliance with anti-corruption laws and regulations. Often, Swiss companies adopt global minimal standards that apply both across the entire organisation and in jurisdictions with more lenient laws than the internal policies.

  • Regular training. This generally involves regular training sessions for employees to keep them updated regarding the company's internal policies, directives and associated legal risks. Larger companies generally make good use of modern technology for their compliance training, including web-based services, podcasts, and interactive tutorials.

  • Checks and controls. To review compliance with applicable laws and internal policies and directives, checks and controls are often supported by state-of-the-art IT applications (particularly in the financial industry sector, where relationships and transactions are permanently monitored and screened by IT-based systems to prevent money laundering and to detect suspicious activities). Many Swiss companies also use HR-based programs to identify employees with increased risk factors who may require additional support and training sessions.

 

The regulatory authorities

Financial Market Supervisory Authority (FINMA)

W www.finma.ch

Status. FINMA is Switzerland's state supervisory authority over the financial markets and financial institutions.

Principal responsibilities. FINMA acts as a supervisory authority of banks, insurance companies, exchanges, securities dealers, collective investment schemes, distributors and insurance intermediaries. It is responsible, among other things, for combatting money laundering and issuing operating licences for companies in the supervised sectors.

FINMA imposes sanctions and also acts as a regulatory body, issuing its own ordinances and circulars.

Public Prosecutor's Office (PPO)

W There are 26 specific cantonal PPO offices (see for example www.staatsanwaltschaften.zh.ch).

Status. The PPOs are the Swiss public prosecutors on the cantonal level.

Principal responsibilities. The PPOs are responsible for conducting criminal investigations in the Swiss Cantons as well as the prosecution before the cantonal courts. As such, they have jurisdiction over all offences, except for ones for which the OAG is exclusively in charge.

Office of the Attorney General of Switzerland (OAG)

W www.bundesanwaltschaft.ch

Status. The OAG is the Swiss public prosecutor on the federal level.

Principal responsibilities. The OAG conducts criminal investigations into certain criminal offences, including illegal trading in war material and nuclear goods, international organised crime and white-collar crime and international money laundering and corruption. Also included in the catalogue are offences committed by federal officials. The OAG is responsible for the prosecution of the above-mentioned offences in the federal courts.

Federal Department of Finance (FDF)

W www.efd.admin.ch

Status. The Federal Department of Finance is the Swiss Ministry of Finance.

Principal responsibilities. Responsible for the investigation and prosecution of the criminal law provisions of the AMLA and Switzerland's Financial Market Supervision Act (FINMASA) by financial intermediaries.

Money Laundering Reporting Office Switzerland (MROS)

W www.fedpol.admin.ch/fedpol/de/home/themen/kriminalitaet/geldwaescherei.html

Status. The MROS is part of the Federal Office of the Police, which is part of the Swiss Ministry of Justice and the Police.

Principal responsibilities. The MROS is responsible for receiving and assessing the reports of suspected money laundering by financial intermediaries. It effectively performs a preliminary assessment to dismiss reports lacking in substance and forwards the remaining cases of suspected money laundering on to the appropriate prosecuting authorities. The MROS is managed by the Federal Office of the Police.

State Secretariat for Economic Affairs (SECO)

W www.seco.admin.ch

Status. The SECO is part of the Federal Department of Economic Affairs, Education and Research.

Principal responsibilities. The SECO is the federal government's centre of expertise for all core issues relating to economic policy. Part of its responsibilities are the administration and enforcement of trade/financial sanctions.



Online resources

Swiss Federal Law

W www.admin.ch/bundesrecht/00566/index.html?lang=de

Description. Compilation of the Swiss laws and ordinances maintained by the Federal Authorities of the Swiss Confederation. The full compilation is available in German, French and Italian.

Swiss Federal Law (English Translations)

W www.admin.ch/bundesrecht/00566/index.html?lang=en

Description. Classified compilation of English translations of certain Swiss laws and ordinances maintained by the Federal Authorities of the Swiss Confederation. The translations are provided for information purposes only and have no legal force.



Contributor profiles

Flavio Romerio

Homburger

T +41 43 222 1000
F +41 43 222 1500
E flavio.romerio@homburger.ch
W www.homburger.ch

Professional qualifications. Switzerland, 1992

Areas of practice. White collar crime and investigations; financial crime.

Recent transactions

  • Conducting an internal investigation regarding insider trading by senior management, and representation of a listed company in subsequent criminal proceedings.

  • Internal investigations at financial institutions regarding the conduct of their cross-border private banking business and representing clients in related enforcement proceedings by US authorities.

  • Advising financial institutions on sanctions compliance and related enforcement proceedings by US regulators.

  • Representing a financial institution in an investigation for money-laundering allegations.

Roman Richers

Homburger

T +41 43 222 1000
F +41 43 222 1500
E roman.richers@homburger.ch
W www.homburger.ch

Professional qualifications. Switzerland, 2003

Areas of practice. White collar crime and investigations.

Recent transactions

  • Leading a multi-jurisdictional internal investigation into corruption allegations for a large multinational.

  • Representing a listed company in criminal proceedings concerning insider trading.

  • Representing the CEO of a listed company in criminal proceedings concerning bribery and corruption.

  • Representing a multinational IT company in criminal proceedings concerning a fraud scheme.

Claudio Bazzani

Homburger

T +41 43 222 1000
F +41 43 222 1500
E claudio.bazzani@homburger.ch
W www.homburger.ch

Professional qualifications. Switzerland, 2004; New York, US, 2007

Areas of practice. White collar crime and investigations; financial crime.

Recent transactions

  • Internal investigations at financial institutions regarding the conduct of their cross-border private banking business.

  • Advising financial institutions in enforcement proceedings by US authorities related to cross-border private banking business.

  • Advising financial institutions regarding sanctions compliance and related enforcement proceedings by US regulators.

  • Representing a foreign state in legal assistance proceedings in criminal matters.


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