Relevant international and domestic law

International anti-corruption conventions

To which international anti-corruption conventions is your country a signatory?

Switzerland is a signatory to three international anti-corruption conventions.

Switzerland ratified the 2003 United Nations Convention against Corruption on 24September2009, with no reservations.

Switzerland is also party to the 1999 Council of Europe Criminal Law Convention on Corruption and its 2003 Additional Protocol, both ratified on 31March2006. However, Switzerland made several reservations regarding this convention. In particular, it reserved the right not to apply section 12 of the convention (trading in influence)- to the extent that this offence is not punishable under Swiss law- as well as its right to only apply section 17(1)(b) and (c) (applying to extraterritorial jurisdiction) where an act is also punishable in the country where it was committed, the offender is in Switzerland and will not be extradited to a foreign state.

Switzerland is also a member of the Council of Europe’s Group of States against Corruption (GRECO).

Switzerland is also a party to the 1997 Organisation for Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, ratified on 31May2000 (OECD Convention).

In addition to these conventions, on 31May2000, Switzerland also ratified the 1990 Council of Europe Convention on Laundering, Search, Seizure and Confiscation of Proceeds of Crime. This convention allows for the restraining of assets suspected of being the proceeds of crime and provides for the confiscation of those assets and the recognition of foreign judgments ordering confiscation.

Moreover, Switzerland is a party to a number of bilateral treaties in matters of mutual legal assistance that facilitate the seizure, confiscation and repatriation of proceeds of crimes (which include corruption).

Foreign and domestic bribery laws

Identify and describe your national laws and regulations prohibiting bribery of foreign public officials (foreign bribery laws) and domestic public officials (domestic bribery laws).

The Swiss Criminal Code (SCC) has seven provisions prohibiting acts of bribery.

The SCC first prohibits the active and passive corruption of domestic officials under articles 322-ter and 322-quater, respectively. These provisions prohibit the offering, promising or giving of an undue advantage (respectively ‘soliciting’, ‘receiving a promise of’ or ‘accepting’ such an advantage) to a member of a judicial or other authority, a public official, an officially appointed expert, translator or interpreter, an arbitrator or a member of the armed forces, for that person’s benefit or for anyone else’s benefit, to cause him or her to carry out or to fail to carry out an act in connection with his or her official activities, which is contrary to his or her duty or dependent on his or her discretion.

Furthermore, articles 322-quinquies and 322-sexies of the SCC prohibit the granting of an advantage to a public official as well as the acceptance by public officials of an advantage, which is not due to them, to make them carry out their official duties (facilitating or ‘grease’ payments).

The active and passive corruption of foreign public officials is prohibited under article 322-septies of the SCC.

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.

Successor liability

Can a successor entity be held liable for violations of foreign and domestic bribery laws by the target entity that occurred prior to the merger or acquisition?

Article 102 SCC, the corporate criminal offence of failing to prevent bribery and other major crimes, does not make any reference to such a situation. However, as article 102(4) construes the term ‘undertaking’ as a legal (and not an economic) term, Swiss courts are likely to deny the liability of an entity taking over the target company. The main reason for this preponderant view of the legal doctrine is that according to the concept of a legal entity, such entity can only be held liable for a criminal offence that took place within its business purpose and by its employees.

Civil and criminal enforcement

Is there civil and criminal enforcement of your country’s foreign and domestic bribery laws?

There is criminal enforcement of Switzerland’s domestic and foreign bribery laws. Civil enforcement exists indirectly by way of disgorgement of profits under articles 70 and 71 SCC and the possibility to claim civil damages in the criminal procedure.

In the case of mutual legal assistance requests by foreign enforcement agencies regarding bribery of foreign officials, Switzerland does not enforce foreign bribery laws, but it can accept the delegation of prosecution by foreign states (article 85 Law on Mutual Legal Assistance). Swiss law pursues anyone who committed a corruption offence abroad (including foreign officials and third parties), if the criminal offence is also subject to prosecution at the place of and if the defendant is in Switzerland and not extradited to the foreign country (article 7(1) SCC).

Furthermore, the Federal Act on International Mutual Assistance in Criminal Matters (IMAC) provides that a state may obtain urgent interim relief prior to the transmission to Switzerland of a formal request for mutual assistance, provided that it announces its intent to forward such a request (article 18 IMAC).

According to civil law, a foreign civil judgment will be recognised and enforced if the conditions of the Swiss Private International Law Act (PILA) are fulfilled (article 25 et seq PILA).

Dispute resolution and leniency

Can enforcement matters involving foreign or domestic bribery be resolved through plea agreements, settlement agreements, prosecutorial discretion or similar means without a trial? Is there a mechanism for companies to disclose violations of domestic and foreign bribery laws in exchange for lesser penalties?

The Office of the Attorney General, in a public statement made at a conference on 21 October 2015 in Zurich, confirmed that it welcomes self-reporting by companies in case of suspected organisational weakness and domestic or foreign corruption. Companies that self-report typically benefit from a fast-track investigation (one to two years instead of five to nine years), the renunciation to impose compulsory measures and a reduction of the corporate criminal fine.. Companies typically first seek guidance from prosecutors in an informal, no-name basis preparatory discussion by their counsel. However, these advantages are only available before the prosecutors knows about the possible misconduct by its own means. The Office of the Attorney General is receiving more and more suspicious activity reports from financial institutions through the Federal Police (around 5,000 reports per year). Companies and individuals, if they admit the facts, can be judged by the prosecutor in a summary procedure. In this case, the prosecutor convicts the undertaking and no public hearing at court takes place.

Bribery cases may also be resolved:

  • by exemption from punishment or abandonment of proceedings if the case is of minor relevance within the meaning of article 52 SCC;
  • by exemption from punishment or abandonment of proceedings if the offender has made good for the loss, damage or injury or made every reasonable effort to right the wrong that he or she has caused, provided that the interests of the public and, where applicable, of the persons harmed in the prosecution, are negligible (article 53 SCC); this procedure is not available at the Federal Office of the Attorney General (as a matter of practice of the Office); or
  • by way of summary penalty order. This procedure is applicable only if the defendant accepts liability for the offence or if his or her responsibility has otherwise been satisfactorily established (article 352 et seq SCPC) and if the sentence is either a monetary fine, a limited monetary penalty of 540,000 Swiss francs maximum, community service of no more than 720 hours or a custodial sentence of no more than six months.

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 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 case of extortion. However, in principle, there is no defence available to individuals who actively engaged in bribery or turned a blind eye on 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.

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 1 million Swiss francs, or both. This sanction 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 sanction (article 62(b) and article 63(1)(a) of the Federal Act on Foreign Nationals); and
  • the court-ordered forfeiture of assets that have been acquired through the commission of an offence (article 70 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 Attorney General’s first conviction in the FIFA investigation, the conviction of IT vendors and senior managers for bribing Swiss officials in the context of the IT project Insieme as well as the officials for accepting said bribes, and the penalty order against Gunvor.

FIFA

The OAG has 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. The proceedings against Franz Beckenbauer, who has also been accused in connection with this matter, were separated in July 2019 and will carried out independently by the OAG. By filing an indictment before the Swiss Federal Criminal Court (FCC), the OAG can conclude its investigations in a significant case in its football-related proceedings. The OAG alleges in its indictment that three of the four people accused jointly committed the offence of fraud (article 146, paragraph 1 Swiss Criminal Code [SCC]), while the fourth person was complicit. The proceedings relating to allegations of money laundering (article 305-bis SCC) were abandoned in July 2019.

Insieme

In 2015, the OAG launched an investigation into the public procurement of IT projects at the Federal Tax Administration (EStv) and subsequently filed an indictment against a former official of the EStv for disloyal management (article 314 SCC), accepting bribes (article 322-quater SCC), accepting benefits (article 322-sexies SCC), and falsification of documents in office (article 317 No. 1, paragraph 2 SCC). Furthermore, the OAG also issued indictments against two employees of two IT providers for active bribery (article 322-ter SCC), respectively for granting undue advantages (article 322-quinquies SCC) to public officials.

The FCC largely followed the OAG’s submissions and found the former employee of the EStV guilty of multiple misconducts in the exercise of his office and acceptance of advantages. He was given a sentence of 16 months’ imprisonment and a monetary penalty of 60 daily rates of 450 Swiss francs. Both sentences were suspended on probation. The two employees of the IT providers were found guilty of multiple misconducts and given a monetary penalty of 150 and 100 daily rates of 100 Swiss francs and 400 respectively. These sentences were also suspended. The former employee of the EStv was also ordered to compensate the state in the amount of 4,000 Swiss francs. In stating the reasons for the judgment, the presiding judge opined that the misconduct that occurred was symptomatic of the many personnel problems and organisational deficiencies surrounding the IT project.

Financial record-keeping and reporting

Laws and regulations

What legal rules require accurate corporate books and records, effective internal company controls, periodic financial statements or external auditing?

All legal entities and all sole proprietorships and partnerships that have achieved sales revenues of at least 500,000 Swiss francs in the previous January to December financial year are obliged to keep accounts and file financial reports in accordance with the provisions of articles 957 et seq of the Code of Obligations. The accounting principles and requirements are complete, truthful and systematic recording of transactions and circumstances, documentary proof for individual accounting procedures, clarity, fitness for purpose given the form and size of the undertaking and verifiability of the financial information.

The accepted accounting standards are:

  • International Financial Reporting Standards (IFRS);
  • IFRS for small and medium-sized enterprises;
  • Swiss Accounting and Reporting Recommendations (GAAP FER);
  • US Generally Accepted Accounting Principles (GAAP); and
  • International Public Sector Accounting Standards (IPSAS) (the latter for public sector entities).

In regulated sectors such as financial services, special rules apply.

Effective internal controls are explicitly and implicitly required by a number of statutes. The most important is article 716a of the Code of Obligations, which states that the board of directors of a Swiss stock corporation bears (among others) responsibility for the organisation of the accounting, for financial control and financial planning systems as required for the management of the company and must supervise the persons entrusted with managing the company, in particular with regard to compliance with the law and internal directives.

Articles 727 et seq of the Code of Obligations on external auditors apply to all enterprises, regardless of their legal organisation and state a general duty to appoint external auditors. However, the scope of the external audit depends on the type (publicly traded versus private) and size of the enterprise. The auditors must examine whether:

  • the annual (consolidated) accounts comply with the statutory provisions, the articles of association and the chosen set of financial reporting standards;
  • the motion made by the board of directors to the general meeting on the allocation of the balance sheet profit complies with the statutory provisions and the articles of association; and
  • there is an internal control system.
Disclosure of violations or irregularities

To what extent must companies disclose violations of anti-bribery laws or associated accounting irregularities?

A statutory reporting duty regarding violations of anti-bribery laws and related accounting irregularities does not exist under Swiss law. General reporting duties regarding legal or compliance, reputational and operational risks do, however, exist in regulated sectors, such as the financial services sector. In addition, under the Federal Act on Combating Money Laundering and Terrorist Financing in the Financial Sector, financial intermediaries must notify the authorities if they suspect money-laundering activities.

Should the external auditors find that there have been infringements of the law, they must give notice to the board of directors in writing and inform of any material infringements at the general shareholders’ meeting.

Prosecution under financial record-keeping legislation

Are such laws used to prosecute domestic or foreign bribery?

The violation of bookkeeping laws is a criminal offence (article 251 of the SCC- falsification of documents) and a violation of ancillary provisions aimed at ensuring proper bookkeeping. The violation of bookkeeping duties may trigger administrative sanctions in regulated industries, such as financial services.

Sanctions for accounting violations

What are the sanctions for violations of the accounting rules associated with the payment of bribes?

The falsification of documents in the sense of article 251 of the SCC may result in imprisonment for up to five years or a fine of up to 1million Swiss francs, or both.

Tax-deductibility of domestic or foreign bribes

Do your country’s tax laws prohibit the deductibility of domestic or foreign bribes?

Switzerland’s federal and cantonal tax laws explicitly exclude tax deductibility of bribes paid to domestic or foreign public officials. With the entry into force of the new articles of the SCC relating to commercial bribery, bribes paid to commercial persons are not tax deductible any longer.

Domestic bribery

Legal framework

Describe the individual elements of the law prohibiting bribery of a domestic public official.

Articles 322-ter et seq. of the SCC prohibit bribery of domestic public officials.

The elements of (active) bribery of domestic public officials are a person offers, promises or gives an undue advantage to a member of a judicial or other authority, a public official, an officially appointed expert, translator or interpreter, an arbitrator, or a member of the armed forces or to a third party, to cause that public official to carry out or to fail to carry out an act in connection with his or her official activity that is contrary to his or her duty or dependent on his discretion.

Minor advantages that are common social practice do not qualify as undue advantages.

According to article 322-quinquies of the SCC, the elements of the (lesser) offence of granting (‘facilitating’) an undue advantage to a domestic public official are a person offers, promises or gives to a member of a judicial or other authority, a public official, an officially appointed expert, translator or interpreter, an arbitrator or a member of the armed forces, an advantage that is not due to him or her in order that he or she carries out his or her official duties.

All criminal offences, including the offence of bribery of a Swiss public official, require mens rea, namely, either intent or wilful blindness (contingent intent).

Scope of prohibitions

Does the law prohibit both the paying and receiving of a bribe?

Both active and passive bribery and granting of undue advantages to domestic public officials are prohibited by the SCC and are subject to the same level of fines. The same applies with regard to commercialbribery.

Definition of a domestic public official

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

The law defines public officials as members of an authority who pursue an official activity. Employees of state-owned or state-controlled companies may qualify as public officials, if and to the extent they pursue an official activity. The Federal Supreme Court confirmed this view in a case regarding the manager of the public servants’ pension fund of the Canton of Zurich.

In light of a case involving active and passive bribery of foreign public officials investigated by the OAG in 2015, the Criminal Chamber held that public officials can be defined in a formal or a functional way. The former refers to a person who is involved in a state organisation, while the latter confirms the definition above (ie, that an individual who pursues an official activity with the public authorities or in public enterprises can also be defined as a public official). It thus confirmed that employees of state-owned or state-controlled companies are qualified as such. For a company to be state-controlled, the majority of shares must be state-owned. This prerequisite was not fulfilled in the case of Gazprom at the time of the alleged bribery.

Gifts, travel and entertainment

Describe any restrictions on providing domestic officials with gifts, travel expenses, meals or entertainment. Do the restrictions apply to both the providing and the receiving of such benefits?

According to article 322-decies of the SCC, minor and commonly accepted social advantages and those that are authorised by administrative regulations are licit. The Ordinance of the Federal Department of Finance on the Ordinance of Federal Employees provides that the compensation for meals depends on the local costs. The maximum acceptable value of a meal invitation is 200 Swiss francs (if the government official is not involved in tender procedures or a decision-making process). Furthermore, article 93a of the Federal Personnel Ordinance prohibits government officials from accepting invitations to events if they impair their independence or freedom of action. Invitations to events abroad are subject to written consent by the superior of the invitee. As for meal invitations, employees that are involved in tender or decision-making processes must not accept any invitation in connection with such processes.

Facilitating payments

Have the domestic bribery laws been enforced with respect to facilitating or ‘grease’ payments?

Yes. In about a dozen instances, courts have sentenced individuals for granting or accepting undue advantages. In a case involving the Federal Administration, the OAG on 16April2014 opened an investigation against a public official for accepting bribes and undue advantages, and the Federal Criminal Court held in 2015 that a public official who accepts 40 lunch invitations from long-standing suppliers is culpable for accepting undue advantages.

Public official participation in commercial activities

What are the restrictions on a domestic public official participating in commercial activities while in office?

A public official may participate in commercial activities to the extent that the participation is financial only and does not create a conflict of interest. This is not the case, or within narrow limits, if the participation in commercial activities involves employment of labour.

Payments through intermediaries or third parties

In what circumstances do the laws prohibit payments through intermediaries or third parties to domestic 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 violating the domestic bribery rules?

Both individuals and companies can be held liable for violating the domestic bribery rules. Indeed, in accordance with article 102(2) SCC, the company can be convicted for organisational weakness, irrespective of the criminal liability of natural persons, provided the company is responsible for failing to take all the reasonable and necessary organisational measures that were required in order to prevent the individual offence.

Private commercial bribery

To what extent does your country’s domestic anti-bribery law 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 be any indictment so far.

Defences

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

Individuals accused of domestic bribery can defend themselves in case of extortion. However, in principle there is no defence available to individuals who actively engaged in bribery or turned a blind eye on bribery by intermediaries.

Agency enforcement

What government agencies enforce the domestic bribery laws and regulations?

The central authority appointed in Switzerland, in accordance with article 29 of the Council of Europe Corruption Treaty, is the Federal Office of Justice, see question 14.

Patterns in enforcement

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

See question 15.

Prosecution of foreign companies

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

Under Swiss criminal law, 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.

Sanctions

What are the sanctions for individuals and companies that violate the domestic bribery rules?

Any person who offers a bribe to a domestic 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 1 million Swiss francs, or both. This sanction may also include:

  • a prohibition from practising a profession (article 67 SCC);
  • the publication of the judgment (article 68 SCC); and
  • the court-ordered forfeiture of assets that have been acquired through the commission of an offence (article 70 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 and investigations involving domestic bribery laws, including any investigations or decisions involving foreign companies.

In recent years, there have been multiple cases of officers of Swiss regional governments undertaking vacation to locations such as Abu Dhabi or Russia paid by the foreign companies, governments or individuals. Even though the officers involved claimed the trips were private in nature, they involved meetings with foreign government officials and thus had a connection to the guests’ official functions.

These incidents have made it apparent that Swiss law does not clearly define the legal limits when it comes to accepting gifts.

The OAG has been investigating the public procurement process of the State Secretariat for Economic Affairs (SECO) for several years. Contrary to clear legal obligations, the involved administrative unit had not issued a tender for years and direct awards of a contract had not been published as required by law. These investigations have revealed severe organisational problems within SECO. In 2019, the OAG has formally indicted a former department head who allegedly collected over 1.7 million Swiss francs unlawfully, and three IT companies.

Odebrecht

As a result of the publicity of the conviction of the conglomerate Odebrecht, a large number of enquiries and requests for mutual legal assistance from various parties were submitted to the OAG in 2017. Currently, more than 50 requests for mutual legal assistance are being processed. Additionally, the authorities are concentrating on involved individuals and companies residing in Switzerland and are conducting 70 different investigations in this matter. The OAG has seized 700 million Swiss francs and reimbursed over 365 million Swiss francs to the injured parties in Brazil.

It remains to be seen whether there will be additional investigations and convictions in this matter.

BAFU

The OAG has been investigating the Federal Department of Environment (BAFU) for alleged unfaithful exercise of duty. In 2019, the OAG enacted a penalty order against a CEO for bribing a project head at the BAFU.

Glenore

In December 2019, the British Serious Fraud Office has initiated criminal proceedings against the Swiss commodities group Glencore on suspicion of bribery in the Congo. There is no official information available as to the background of the investigation. However, according to media reports, Glencore allegedly entered into a deal with an Israeli businessman who was sanctioned by the US owing to bribery payments to secure the mining rights in the Congo. The US DOJ has also initiated an investigation against Glencore in this matter.

Gunvor

On 14 October 2019, the OAG issued a penalty order according to which Gunvor was sentenced to a penalty order in the amount of 4 million Swiss francs pursuant to article 102(2) SCC in connection with article 322-septies SCC. Moreover, the OAG ordered a forfeiture of 90 million Swiss francs that have been acquired through the bribing of foreign officials in connection with oil deals in Congo-Brazzaville and the Ivory Coast. A deficient internal organisation, including the absence of a compliance system and a code of conduct between 2008 and 2011, is seen as the main cause of Gunvor’s misconduct. In fact, no precautions had been taken to reduce the risk of corruption.

Although Gunvor’s ‘Business Development’ employee was found guilty of private bribery, and despite eight years of investigation, the investigators could not establish the executives’ involvement in the unlawful conduct, even though the FCC held in its indictment that the delinquent employee was operating in a professional environment in which corruption had been accepted as part of business and transactions had been validated by the finance department.

The CEO was not found guilty as he claimed that he did not see any red flags regarding the commission in the amount of 15 million Swiss francs paid to an intermediary who was an official with decision-making authority in Congo Brazzaville. He also provided the OAG with detailed explanations as to why such payments were made even though the company did not have a compliance selection programme for intermediaries. In total, US$43 million was transferred to family members of the president and government officials in Congo-Brazzaville.

However, an investigation against Gunvor’s chief financial officer is still ongoing, given that he was caught on a video recording describing how government officials in Congo Brazzaville could be paid off.

Update and trends

Key developments of the past year

Please highlight any recent significant events or trends related to your national anti-corruption laws.

Key developments of the past year39 Please highlight any recent significant events or trends related to your national anti-corruption laws.

The key developments in 2019 were the continued investigation undertakings for failure to prevent bribery of foreign officials and related money-laundering (the major matters continue to be related to Lava Jato, Venezuela, 1MDB, FIFA, the commodities sector and Swiss registered banks).