Anti-Corruption in Switzerland

By Dr. Markus Berni* and Philippe Monnier* (Baker McKenzie Switzerland)

1.      Domestic bribery (private to public)

1.1       Legal framework

Bribery of public officials is prohibited under the Swiss Criminal Code, Articles 322ter to 322quater.

1.2       Definition of bribery

The Swiss Criminal Code distinguishes between active bribery, which can be committed by anyone who tries to corrupt a public official (Swiss Criminal Code, Article 322ter), and the acceptance of bribes, which can be committed only by said officials (Swiss Criminal Code, Article 322quater).

Bribery consists of offering, promising or giving an advantage that is not due to the public official, or offering, promising or giving such an advantage to a third party, in order to cause that public official to carry out or to fail to carry out an act in connection with his or her official activity, which is contrary to his or her duty or dependent on his or her discretion.

Acceptance of bribes consists of demanding, securing the promise of or accepting an advantage that is not due to the public official for himself or herself or for a third party in order that he or she carries out or fails 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 or her discretion.

1.3       Definition of public official

The Swiss Criminal Code uses a broad definition of public official, which includes but is not limited to a member of a judicial or other authority; an officially appointed expert; an officially appointed translator or interpreter; and an arbitrator or a member of the armed forces. This concept may also include private individuals and employees of publicly owned companies if such individuals exercise public functions.

1.4       Consequences of bribery

(a)        For the individuals involved

The Swiss Criminal Code establishes the same penalties for individuals who actively bribe public officials as for the public officials who accept a bribe. The penalties include the following:

  • Up to five years in jail
  • Monetary penalty, calculated on a per diem basis, of up to 360 daily penalty units (a judge will determine the daily penalty, taking into account the financial strength of the individual, from CHF 10 to CHF 3,000 per day, and will multiply such amount by the number of days imposed)
  • Up to five years of prohibition on exercising a profession
  • Criminal forfeiture of objects and assets that were used, intended to be used or produced as a result of the offense.

(b)        For the company/legal entity:

  • Criminal fine of up to CHF5 million
  • Criminal forfeiture of objects and assets that were used, intended to be used or produced as a result of the offense.

1.5       Political contributions

Switzerland has not enacted any federal laws dealing with political contributions, thus leaving room for the cantons to regulate this issue. In most cantons, however, political parties are not required to disclose political donations and contributions. Even though the funding of political parties has been a subject of debate in Switzerland in the last few years, there is presently no consensus on whether or not and in what form such regulations could be adopted..

1.6       Limitation applicable to hospitality expenses (gifts, travel, meals, entertainment, amongst others)

The Swiss Criminal Code does not establish general quantitative or qualitative limitations on hospitality expenses. However, some of the relevant regulations for public officials contain explicit guidance and limitations on such expenses. For example, according to Article 93 of the Swiss Ordinance on Federal Public Employees, gifts and advantages for certain public officials are limited to those with a value of CHF 200 or less.

Aside from such explicit rules, the question of whether a hospitality expense may be considered bribery within the meaning of the Swiss Criminal Code will need to be determined on a case-by-case basis, taking into account all the facts and circumstances surrounding the case.

2.      Domestic bribery (private to private)

2.1       Legal framework

Private bribery is prohibited under the Swiss Criminal Code, Articles 322octies to 322novies.. In addition, private bribery constitutes an act of unfair competition, which is prohibited under the Swiss Act on Unfair Competition, Article 4a.

2.2       Definition of private bribery

The Swiss Criminal Code distinguishes between active private bribery (Swiss Criminal Code, Article 322octies), which can be committed by anyone who tries to bribe certain persons in the private sector, and the acceptance of bribes (Swiss Criminal Code, Article 322novies), which can only be committed by said persons in the private sector. The same distinction is made in the Swiss Act on Unfair Competition, Article 4a.

Private bribery entails offering, promising or giving an advantage that is not due to an employee, company member, mandatee or agent in the private sector in connection with his or her business-related duties and in exchange for an act or omission violating such duties or in exchange for a discretionary act or omission for the benefit of himself or herself or for the benefit of a third party.

Acceptance of a bribe in the private sector entails demanding, securing the promise of or accepting an advantage that is not due in connection with business-related duties as an employee, company member, mandatee or agent in the private sector and in exchange for an act or omission violating such duties or in exchange for a discretionary act or omission for the benefit of himself or herself or for the benefit of a third party.

2.3       Consequences of private bribery

(a)        For the individuals involved

  • Up to three years in jail (small cases, however, are prosecuted only upon request of the affected person or legal entity)
  • Monetary penalty, calculated on a per diem basis, of up to 360 daily penalty units (a judge will determine the daily penalty, taking into account the financial strength of the individual, from CHF 10 to CHF 3,000 per day, and will multiply such amount by the number of days imposed)
  • Up to five years of prohibition on exercising a profession
  • Criminal forfeiture of objects and assets that were used, intended to be used or produced as a result of the offense

(b)        For the company/legal entity:

  • Criminal fine of up to CHF5 million
  • Criminal forfeiture of objects and assets that were used, intended to be used or produced as a result of the offense

2.4       Limitation applicable to hospitality expenses (gifts, travel, meals, entertainment, amongst others)

Neither the Act on Unfair Competition nor the Swiss Criminal Code establishes general quantitative or qualitative limitations on hospitality expenses. In some industries, however, guidance on hospitality expenses can be found in the relevant industry standards or in documents relating to self-regulation. Aside from such explicit soft law rules, the Act on Unfair Competition and the Swiss Criminal Code state that certain advantages that have been approved by the third party, as well as small advantages that are socially acceptable, will not fall under their scope (Swiss Act on Unfair Competition, Article 4a, Paragraph 2 and Swiss Criminal Code, Article 322decies). However, since there is thus far only very limited guidance on the exact scope of this exception, the question of whether a hospitality expense may be considered private bribery will in any case need to be determined on a case-by-case basis, taking into account all the facts and circumstances surrounding the case.

3.      Bribery of foreign public officials

3.1       Legal framework

Bribery of foreign public officials is prohibited under the Swiss Criminal Code, Article 322septies.

3.2       Definition of bribery of foreign public officials

The Swiss Criminal Code distinguishes between active bribery, which can be committed by anyone who tries to corrupt a foreign public official (Swiss Criminal Code, Article 322septies., Paragraph 1), and the acceptance of bribes, which can be committed only by said officials (Swiss Criminal Code, Article 322septies., Paragraph 2).

Bribery of foreign officials entails offering, promising or giving an advantage that is not due to the foreign public official or the official of an international organization, or offering, promising or giving such an advantage to a third party, in order 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 or her discretion.

Acceptance of bribes by foreign public officials entails demanding, securing the promise of or accepting an advantage that is not due to the foreign public official or the public official of an international organization for himself or herself or for a third party in order that he or she carries out or fails 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 or her discretion

3.3      Definition of foreign public official

The Swiss Criminal Code uses a broad definition of foreign public officials, which includes but is not limited to a member of a judicial or other authority; an officially appointed expert; an officially appointed translator or interpreter; and an arbitrator or a member of the armed forces of a foreign state or an international organization. This concept can also include private individuals and employees of publicly owned companies, if such individuals exercise public functions.

3.4       Consequences of corruption of foreign public officials

(a)        For the individuals involved

The Swiss Criminal Code establishes the same penalties for individuals who actively bribe foreign public officials as for the public officials who accept a bribe. The penalties include the following:

  • Up to five years in jail
  • Monetary penalty, calculated on a per diem basis, of up to 360 daily penalty units (a judge will determine the daily penalty, taking into account the financial strength of the individual, from CHF 10 to CHF 3,000 per day, and will multiply such amount by the number of days imposed)
  • Up to five years of prohibition on exercising a profession
  • Criminal forfeiture of objects and assets that were used, intended to be used or produced as a result of the offense
(b)        For the company/legal entity:
  • Criminal fine of up to CHF5 million
  • Criminal forfeiture of objects and assets that were used, intended to be used or produced as a result of the offense

3.5       Limitation applicable to hospitality expenses (gifts, travel, meals, entertainment, amongst others)

The Swiss Criminal Code does not establish general quantitative or qualitative limitations on hospitality expenses. Accordingly, the question of whether a hospitality expense may be considered bribery will need to be determined on a case-by-case basis, taking into account all the facts and circumstances surrounding the case.

However, the Swiss Criminal Code does state that certain advantages that have been approved by the third party, as well as small advantages that are socially acceptable will not fall under its scope (Swiss Criminal Code, Article 322decies).

4.      Facilitation payments

The Swiss Criminal Code does not explicitly recognize so-called facilitation payments. No facilitation payment exception applies under Swiss law. Therefore, it is advisable to refrain from offering/accepting facilitation payments.

5.      Compliance programmes

5.1       Value of the compliance programme in mitigating/eliminating the criminal liability of legal entities

Where a crime of corruption has been committed in a legal entity in the exercise of commercial activities, the Swiss Criminal Code in principle sets out two different types of criminal liability for the legal entity in question, namely: (i) a secondary criminal liability when it is not possible to attribute this act to any specific natural person due to the inadequate organization of the legal entity (Swiss Criminal Code, Article 102 Paragraph 1); and (ii) a primary or ‘concurrent’ criminal liability where the undertaking is responsible for failing to take all the ‘reasonable organizational measures’ that were required in order to prevent the offense, in which case the legal entity is penalized irrespective of the criminal liability of (and thus potentially in addition to) any natural persons (Swiss Criminal Code, Article 102 Paragraph 2). Accordingly, in cases involving concurrent criminal liability (which are most relevant in practice), an effective compliance program can in effect eliminate the criminal liability of the legal entity if the legal entity is deemed to have taken all reasonable organizational measures that were required in order to prevent the offense in question. Beyond that and in any case, an effective compliance program can at least help to mitigate the criminal liability of the legal entity in question.

5.2       Lack of a compliance programme as a crime

If a crime of corruption is committed within a legal entity in the exercise of commercial activities and if such legal entity lacks adequate compliance procedures, the legal entity in question can, as a matter of Swiss law, become criminally liable irrespective of the criminal liability of any natural persons. Beyond that, Swiss authorities can be entitled to confiscate the proceeds connected with the act in question.

5.3       Elements of a compliance programme

(a)        Legal framework

The Swiss Criminal Code does not explicitly regulate the elements of a compliance program.

(b)        Recommended practice

In the absence of case law, Swiss legal doctrine recommends that legal entities adopt a robust compliance program as a defence strategy to mitigate or exclude the legal entity’s criminal liability for crimes of corruption.

6.      Regulator with jurisdiction to prosecute corruption

Jurisdiction to prosecute corruption is set forth in the Swiss Code of Criminal Procedure, in particular in Article 23, Letter j. According to this article, the Federal Prosecutor’s Office shall have jurisdiction to prosecute all acts of corruption committed by Swiss federal public officials or committed against the Swiss federal government. The same applies for other acts of private to public bribery, if the offenses have to a substantial extent been committed abroad or if they have been committed in two or more cantons with no single canton being the clear focus of the criminal activity (Swiss Code of Criminal Procedure, Article 24 Paragraph 1).

Other cases are prosecuted by the cantonal prosecutor’s offices. According to the general rule in Article 31 of the Swiss Code of Criminal Procedure, the place where the crime was committed will generally determine which cantonal authority has jurisdiction to prosecute

 


Baker McKenzie
Holbeinstrasse 30
8034 Zurich Switzerland

Markus Berni

Markus Berni’s practice focuses on mergers and acquisitions, private equity and corporate restructurings. He advises clients on governance and compliance matters, and he is a contributor to the Partnership Against Corruption Initiative (PACI) of the World Economic Forum. Markus also advises clients in a broad range of commercial — often cross-border — transactions, including distribution structures, development and licensing agreements, integration and outsourcing projects, electronic commerce and telecommunications regulations.

markus.berni@bakermckenzie.com

Tel: +41 44 384 1281

Baker McKenzie
Holbeinstrasse 30
8034 Zurich Switzerland

Philippe Monnier

Philippe Monnier advises clients in commercial law and in general contract and corporate matters, including in particular anti-corruption and antitrust compliance. Beyond that, he represents clients before Swiss authorities and courts, as well as in national and international arbitration proceedings. Philippe is fluent in English, French and German.

philippe.monnier@bakermckenzie.com

Tel: +41 44 384 1367