Foreign bribery

Legal framework

Describe the elements of the law prohibiting bribery of a foreign public official.

Bribery of a foreign public official is prohibited by article 322-septies of the Swiss Criminal Code (SCC). The application of this provision requires an unlawful payment or an undue advantage (ie, any measurable improvement of the beneficiary’s situation, whether in economic, legal or personal terms) or the offer or promise of such an undue payment or advantage, to cause that official to act in breach of his or her public duties or to act or take a decision within his or her discretion.

The assessment of whether the ‘advantage’ given represents an ‘undue advantage’ for the foreign official shall be made based on the terms of the legislation of the country concerned.

It is important to specify that a bribe paid to cause a foreign official to act in accordance with his or her public duties (facilitating or ‘grease’ payments) is not prohibited under this provision.

Definition of a foreign public official

How does your law define a foreign public official, and does that definition include employees of state-owned or state-controlled companies?

Under Swiss law, the definition of foreign public officials includes, as required by the OECD Convention, the officials of a foreign state or a foreign authority, and the officials of international organisations, regardless of their nationality.

The definition of a ‘public official’ under article 322-ter of the SCC also applies for article 322-septies; it therefore includes all foreigners acting as members of a judicial or other authority, public officials, officially appointed experts, translators or interpreters, arbitrators and members of the armed forces.

It is important to specify here that private persons performing official duties shall be treated as public officials (article 322-octies of the SCC), including when they act for public companies active in the private sector. The Federal Criminal Court held that a member of the ruling family of an autocratic regime who is not exercising an official function but who has the power to take decisions on behalf of the regime is considered a (de facto) public official.

Pursuant to a judgment by the Federal Supreme Court, employees of state-owned or state-controlled companies qualify as public officials if they exercise a sovereign task.

Gifts, travel and entertainment

To what extent do your anti-bribery laws restrict providing foreign officials with gifts, travel expenses, meals or entertainment?

Swiss law prohibits offering any ‘undue advantage’ to a foreign public official. Undue advantages are all direct and indirect advantages that result in an ascertainable enhancement of the beneficiary’s legal, economical or personal situation. It can take any form, in particular:

  • a payment (more or less hidden, eg, an excessive fee for a service);
  • a benefit in kind (eg, a gift of a valuable object, including travel); and
  • the promise of a promotion, supporting an election, etc.

The advantage must be paid or given to induce the foreign official to act in breach of his or her public duties or to exercise his or her discretion in favour of the corrupting party or of a third party.

However, advantages are not undue if permitted by staff regulations or if they are of minor value in conformity with social customs (article 322-decies (1) SCC).

In international circumstances, the act must also be illicit in the foreign state where the offence took place (article 6(1) and article 7(1) SCC).

Facilitating payments

Do the laws and regulations permit facilitating or ‘grease’ payments to foreign officials?

Switzerland does not prohibit facilitating or ‘grease’ payments to foreign public officials. Swiss criminal law distinguishes between prohibited corruption, which induces public officials to breach their duty, and, on the other hand, the permitted granting of advantages, which induces public officials to perform a lawful act that does not depend on their discretionary power. However, granting of advantages to Swiss public officials (as well as receipt of payment by these officials) constitutes a criminal offence under Swiss law.

Payments through intermediaries or third parties

In what circumstances do the laws prohibit payments through intermediaries or third parties to foreign public officials?

Swiss criminal law prohibits indirect corrupt payments through intermediaries under the following conditions: the person offering, promising or giving an undue advantage via an intermediary must, under the circumstances, recognise the risk of an indirect corrupt payment and accept or turn a blind eye on the likelihood of a corrupt advantage.

Individual and corporate liability

Can both individuals and companies be held liable for bribery of a foreign official?

Both individuals and companies can be held liable for bribery of a foreign official. Indeed, in accordance with article 102(2) SCC, a company can be convicted for organisational weakness, irrespective of a criminal conviction of an employee but only in the presence of evidence for an act of bribery, provided the company is responsible for failing to take all the reasonable and necessary organisational measures that were required to prevent such offences.

In a decision of 11October2016, the Swiss Supreme Court specified the requirements for corporate criminal liability pursuant to article 102(2) SCC. Swiss Post Ltd was acquitted because of lack of an offence committed by an employee. According to the Swiss Supreme Court, mandatory prerequisite for a company to be liable under article 102(2) SCC is the commission of a criminal offence within a company in the exercise of its commercial activities and if employees, even if their identity is unknown, fulfilled the objective and subjective elements of the criminal offence of bribery (or money laundering, etc).

Furthermore, the predicate criminal offence must be a result of the organisational compliance failure of the company. In the absence of strong (yet not full) evidence for at least one predicate offence, there is no corporate criminal liability under article 102(2) SCC.

Private commercial bribery

To what extent do your foreign anti-bribery laws also prohibit private commercial bribery?

Articles 322-octies and 322-novies of the SCC prohibit the active and passive bribery of private individuals. These provisions prohibit the offering, promising or giving (respectively the ‘demanding’ and ‘acceptance’) of an undue advantage to an employee, partner or shareholder, agent or other auxiliary person of a third party in the private sector, for an act or omission in its duty or discretion in the offender’s or a third party’s favour. Even though private commercial bribery is prohibited by the SCC, there has not been any indictment so far.

Defences

What defences and exemptions are available to those accused of foreign bribery violations?

Individuals accused of foreign bribery can defend themselves in cases of extortion, a situation of necessity, misconception, etc. However, in principle and besides procedural defence mechanisms, there is no particular defence available to individuals who actively engaged in bribery or turned a blind eye to bribery by intermediaries.

Agency enforcement

What government agencies enforce the foreign bribery laws and regulations?

In matters of international cooperation, the central authority appointed in Switzerland, in accordance with article 29 of the Council of Europe Corruption Treaty, is the Federal Office of Justice (FOJ), an agency of the Federal Department of Justice and Police. The FOJ is the central authority that cooperates with national and international authorities in matters involving legal assistance and extradition.

Bribery and money-laundering offences are investigated by the Federal Office of the Attorney General (OAG) if the offence has mainly been committed in a foreign country, or in several cantons with none being clearly predominant (article 24(1) of the Swiss Criminal Procedure Code (SCPC)). The cantonal prosecutors are competent with regard to all other (domestic) investigations into bribery and money laundering.

On 1January2016, a memorandum of understanding concerning the cooperation based on article 38 of the Federal Act on the Swiss Financial Market Supervisory Authority between the Swiss Financial Market Supervisory Authority (FINMA) and the OAG came into force. The memorandum highlights the importance of collaboration between federal enforcement agencies in combating corruption. FINMA’s main mandate consists of the administrative prudential supervision of regulated financial institutions, whereas the OAG is competent for the prosecution of criminal offences in the competence of the Swiss Confederation.

Detection of bribery cases increasingly results from third-party reports.

The Federal Money Laundering Reporting Office (MROS) received 6,126 suspicious activity reports in 2018 from financial institutions, compared to 4,684 in 2017 and 2,909 in 2016. Swiss banks are making more and more suspicious activity reports, including many that relate to actual or suspected corruption. Seventy per cent of the reported suspicious activity was referred to the Office of the Attorney General for further investigation. The most common predicate offence in this context was corruption. The suspicious activity involved a total amount of 17.589 billion francs, with an average amount of 2.87 million francs per report.

Patterns in enforcement

Describe any recent shifts in the patterns of enforcement of the foreign bribery rules.

Switzerland provided a substantial contribution to the drafting of the OECD Convention of 1997 on Combating Bribery of Foreign Public Officials in International Business Transactions. Between 2000 and 2006, Switzerland extended and further tightened its anti-briberyrules.

Switzerland has been active in freezing and spontaneously returning assets belonging to former heads of states or politicians to their respective states, in particular after the Arab Spring.

Switzerland has also been particularly active in fighting money laundering in its territory, including in seizing and confiscating the proceeds of bribery. For this purpose, Switzerland is using the statutory system for the filing of suspicious activity reports by banks and other financial intermediaries and mutual legal assistance by prosecutors to foreign states, once assets obtained illegally or by improper means are discovered in Switzerland.

Since 2015, the Federal Criminal Police and the OAG also rely on information received through the web-based ‘Integrity Line’ reporting platform, which enables anyone to anonymously report suspected or actual corruption.

As of 1January2016, new rules against money laundering have been in force. They widened the scope of application of the rules on politically exposed persons (PEPs) including members and senior executives of intergovernmental organisations or international sports associations (article 2a Anti-Money Laundering Act). Business relationships with domestic PEPs, or parties related to them, and with PEPs of international organisations as well as international sports associations are not as such considered increased-risk business relationships. However, such business relationships are subject to increased duties if further risk factors, such as high cash flows from and to an account and unusual transactions, are present. Business relationships with foreign PEPs or PEP-related parties are always considered as increased-risk business relationships and must be assessed with a higher degree of diligence.

In addition, material tax offences have been introduced as a predicate offence of money laundering (article 305-bis SCC), strengthening the message to financial intermediaries that, in Switzerland, all proceeds of crime must be reported to MROS.

Prosecution of foreign companies

In what circumstances can foreign companies be prosecuted for foreign bribery?

Under article 102(2) SCC, it is an offence for a company to not take

all necessary and reasonable organisational (compliance) measures required to prevent (among other offences) active bribery of domestic and foreign officials by its employees. Foreign companies are subject to Swiss jurisdiction if they are ultimately responsible for compliance with the law by a Swiss subsidiary, from which the foreign bribery originated.

Sanctions

What are the sanctions for individuals and companies violating the foreign bribery rules?

Any person who offers a bribe to a foreign public official to obtain an advantage that is not due to him or her is liable to a custodial sentence not exceeding five years or to a monetary penalty up to 540,000 Swiss francs, or both. Further measures may also include:

  • a prohibition from practising a profession (article 67 SCC);
  • the publication of the judgment (article 68 SCC);
  • the expulsion from Switzerland for foreigners as an administrative measure (article 62(b) and article 63(1)(a) of the Federal Act on Foreign Nationals);
  • the court-ordered forfeiture of assets that have been acquired through the commission of an offence (article 70 SCC); or
  • an equivalent claim, if the assets are no longer available (article 71 SCC).

A company that has not taken all the reasonable and necessary precautions to prevent bribery within its organisation is penalised irrespective of the criminal liability of any natural persons and is liable to a fine not exceeding 5 million Swiss francs (article 102 SCC). In corruption cases, the fines for companies are disgorgement of profits and a public statement is made by the OAG on its investigation and the outcome (declination, criminal order or indictment).

Recent decisions and investigations

Identify and summarise recent landmark decisions or investigations involving foreign bribery.

Recent landmark decisions include the OAG’s failure to convict former football governing body officials owing to the expiry of the limitation period, the conviction of Gunvor for failure to prevent bribery and the OAG’s indictment relating to Petrobras – Odebrecht.

Indictment in connection with the DFB

In July 2019 the OAG issued an indictment against three former officials of the non-profit German Football Association (DFB) and a former Swiss FIFA official. The accused are alleged to have in April 2005 fraudulently misled the members of a supervisory body of the DFB organising committee for the 2006 World Cup in Germany about the true purpose of a payment of around €6.7 million. However, due to the covid-19 pandemic and despite the impending limitation period, the Swiss Federal Criminal Court (FCC) trial had to be postponed.

 

Gunvor

In a summary penalty order dated 14 October 2019, the OAG convicted Gunvor (Gunvor International BV, represented by its Geneva branch, and Gunvor Ltd in Geneva) and ordered the payment of nearly 94 million Swiss francs, including a fine of 4 million Swiss francs. As a result of serious deficiencies in its internal organisation and management, the oil trading company failed to prevent the bribery of public officials in the Republic of the Congo and Ivory Coast between 2008 and 2011 (article 102, paragraph 2 SCC in conjunction with article 322septies SCC).

 

Petrobras/Odebrecht

According to the OAG’s press release dated 22 Ocotber 2019 in connection with Petrobras – Odebrecht related investigations, it has filed its first indictment with the FCC under accelerated proceedings against an individual on the charge of complicity in the bribery of foreign public officials and of money laundering.