Introduction

In order to facilitate and expedite the exchange of information with foreign judicial authorities in criminal matters, Swiss prosecuting authorities and the federal prosecutor's office, in anticipation of a request for judicial assistance or on receipt of such a request, often initiate a domestic investigation (typically for suspected money laundering) and lodge within the framework of such domestic investigation a reciprocal request for assistance with their foreign peers, supported by information and materials relevant to the proceedings conducted by those peers. As a consequence, rules of Swiss domestic law as well as international treaty law governing the international exchange of information in penal matters are bypassed. In a recently published decision,(1) the Federal Criminal Court took the opportunity to examine those methods on the example of the disclosure of certain bank records to the Brazilian authorities as exhibits to a Swiss request for international judicial assistance, the procurement and transmission of which had been applied for by the Brazilian authorities in a previous request for judicial assistance. The court qualified the conduct of the federal prosecutor as an inadmissible act of entraide sauvage (rogue mutual aid).

Facts

The case revolved around the Petrobras corruption scandal. In 2014 the Swiss federal prosecutor opened a money laundering case to investigate the suspected collection of bribes by directors of Petrobras via Swiss bank accounts. Based on confessions made by one of the directors in the Brazilian investigation, a further money laundering case was opened in 2015 to investigate the suspected payment of bribes from Swiss bank accounts held by companies of the Odebrecht group, a Brazilian construction company.

On November 18 2014 the Brazilian authorities lodged a request for international judicial assistance with the Swiss authorities, requiring access to the file of the Swiss money laundering investigation initiated in 2014 and the release of documents concerning Swiss bank accounts.

By a reciprocal request of July 16 2015, the federal prosecutor in turn requested international judicial assistance from the Brazilian authorities. He applied in particular for the interrogation of the aforementioned directors of Petrobras. Along with his letter rogatory, the federal prosecutor furnished bank records, including, documentation relating to an account held by a company of the Odebrecht group (complainant), and requested the Brazilian authorities to confront the Petrobras directors with those bank records during their deposition.

On August 24 2015 the complainant appealed to the Federal Criminal Court. It argued that the bank records should have been released to the Brazilian authorities only on completion and within the boundaries of the (passive) judicial assistance procedure pending in Switzerland in connection with the Brazilian request of November 18 2014. The Swiss letter rogatory of July 16 2015 constituted a mere pretext to bypass the rules of Swiss law protecting due process.

Considerations

As a starting point (Consideration 3.2), the court recalled that – according to Article 25(2) of the Federal Act on International Mutual Assistance in Criminal Matters – active requests of Swiss authorities for judicial assistance are appealable in exceptional cases only. Pursuant to Article 25(2), "an appeal against a Swiss request to another state is admissible only if that state is requested to assume responsibility for the criminal proceedings or the execution of a criminal judgment".(2) However, it noted that this restriction was not pertinent in cases where a Swiss request appeared to have been made predominantly in order to frustrate, or would amount to a circumvention of, a concerned party's right to effectively defend its case (Consideration 3.3). It thereby referred to a decision rendered by the Federal Supreme Court in a case where under the cover of a request for judicial assistance the federal prosecutor transmitted bank records to the penal authorities of a foreign state, which he knew would be of specific interest to those authorities.(3)

On the merits the court emphasised that the statement of facts in an active request for judicial assistance should be limited to what is necessary so as to enable the other state to answer the request (Consideration 3.7). Against the background of the close links between the criminal proceedings carried out in Switzerland and Brazil, and noting that the federal prosecutor's request included a significant amount of information and documentation which had been asked for in the Brazilian request dated November 18 2014, it held that the Swiss request appeared to serve the purpose of furnishing rather than obtaining information and evidence. While recognising that the Swiss authorities needed to disclose specific factual information to Brazil in connection with their application for assistance (including information about confidential matters such as banking relationships), it noted that the transfer of documentary evidence in support of those facts clearly violated the principle of proportionality (Consideration 5.4). The court moreover clarified that the documents at issue were protected by Swiss banking secrecy and that Swiss laws otherwise permitting spontaneous legal assistance (assistance without previous request by the other state) could thus not serve as a justification either (Consideration 4.2 and 5.5). The federal prosecutor's conduct effectively deprived the complainant of its right to be heard and rendered an ex ante review by the competent courts impossible. Thus, pursuant to the verdict of the Federal Criminal Court (Consideration 5.5), the July 16 2015 request for judicial assistance constituted a case of entraide sauvage.

The court directed the federal prosecutor to carry out post festum the procedure as required by Swiss law in matters of passive legal assistance so as to allow the complainant to exercise its procedural rights. In the event that the procedure lead to a decision affirming the admissibility of the transfer of the information and documents at issue, the entraide sauvage would be considered remedied and the Brazilian authorities could make use of the information and documents received as if those materials had been made available to them by way of an ordinary legal assistance procedure. If assistance was found inadmissible, the Swiss authorities would in contrast have to evaluate measures to protect the rights of the complainant (Consideration 6.3).

Unfortunately, the court expressed no views as to what specific measures it would consider appropriate to prevent misuse of the information and records wrongly provided by the Swiss in the Brazilian proceedings. Indeed, it is difficult to imagine that any effective measures would be available to achieve this.

Comment

While the Federal Criminal Court's decision uses remarkably clear language to condemn the conduct of the federal prosecutor, the remedies proposed seem to be inadequate. Through the entraide sauvage, the federal prosecutor created a situation which can hardly be remedied by way of an ex post review.

Moreover, the review should be assigned to an independent and impartial authority which is free of any appearance of bias. By requesting the same federal prosecutor who created the fait accompli in the first place to adjudicate the validity of the transfer of evidence in a subsequent assistance procedure, the Federal Criminal Court effectively asked the fox to guard the hen house.

For further information on this topic please contact Bernhard Loetscher orAxel Buhr at CMS von Erlach Poncet Ltd by telephone (+41 44 285 11 11) or email (bernhard.loetscher@cms-vep.com or axel.buhr@cms-vep.com). The CMS von Erlach Poncet website can be accessed at www.cms-vep.com.

Endnotes

(1) Federal Criminal Court, Decisions RR.2015.240 and RP.2015.47, January 22 2016.

(2) Informal English translation.

(3) Federal Supreme Court, November 7 1996, in SJ 1997 pages 193 and 194, Consideration 3b.

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