The New Swiss Criminal Code Provisions on private sector bribery

The New Swiss Criminal Code Provisions on private sector bribery Lugano, October 6, 2016 Davide Ceroni Old and new provisions Unfair Competition ...
Author: Abel Carr
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The New Swiss Criminal Code Provisions on private sector bribery

Lugano, October 6, 2016

Davide Ceroni

Old and new provisions

Unfair Competition Act (UCA)

Swiss Penal Code (SCC)

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Distortion of competition Criminal compliant

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Distortion of competition Public offence



No reported cases of private sector



Private bribery will be prosecuted in a similar manner to prosecution of public bribery

bribery in the Swiss courts thus far

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Active bribery of private individuals (art. 322octies SCC) Bribery Any person who offers, promises or gives an employer, company member, agent or any other auxiliary to a third party in the private sector an undue advantage for that person or a third party in order that the person carries out or fails to carry out an act in connection with his official activities which is contrary to his duties or dependent on his discretion is liable to a custodial sentence not exceeding three years or to a monetary penalty.

In minor cases, the offence is only prosecuted on complaint.

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Passive bribery of private individuals (art. 322novies SCC) Accepting Bribes

Any person who as an employer, company member, agent or any other auxiliary to a third party in the private demands, secures the promise of, or accepts an undue advantage for himself or for a third party in order that the person carries out or fails to carry out an act in connection with his official activities which is contrary to his duties or dependent on his discretion is liable to a custodial sentence not exceeding three years or to a monetary penalty.

In minor cases, the offence is only prosecuted on complaint.

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Undue advantage The following are not undue advantages (art. 322decies SCC) a) advantages permitted under public employment law or contractually approved by a third party  Conform with public service regulations / are, by contract or internal instructions, authorized by the employer / principal

b) negligible advantages that are common social practice.  No dependency / as a courtesy and not actual advantage  Monetary gifts are, in professional life, rather uncommon

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Official activities

• The criminal offence is limited to business and professional activity (“con la sua attività di servizio o d’affari” / “im Zusammenhang mit seiner dienstlichen oder geschäftlichen Tätigkeit„)  Criteria of remuneration

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Minor case



Wrongdoing amounts to only a few thousand Swiss francs



The safety and health of other persons is not affected



No repeated or by gang conduct



Not linked to the forgery of documents

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Territorial aspects



Bribery act must take place in Switzerland, however it is sufficient:  that act is performed only partially in Switzerland  the briber is in Switzerland at the time he/she gives instructions for a money transfer;  Swiss bank account

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Risk for Swiss and Foreign Companies Bribery

Accepting Bribes

Art. 102 para. 2 SCC If the offence committed falls under Articles (…) 322octies, the undertaking is penalised irrespective of the criminal liability of any natural persons, provided the undertaking has failed to take all the reasonable organisational measures that are required in order to prevent such an offence.

Art. 102 para. 1 SCC If a felony or misdemeanour is committed in an undertaking in the exercise of commercial activities in accordance with the objects of the undertaking and if it is not possible to attribute this act to any specific natural person due to the inadequate organisation of the undertaking, then the felony or misdemeanour is attributed to the undertaking.

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Risk for Swiss and Foreign Companies Consequences: •

Reputational damage



Fine of up to CHF 5 million



Seizure of profits from any deal concluded involving bribes

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Personal Risks for Management and Board Members •

Personal civil liability as a breach of fiduciary duty Art. 754 Swiss Code of Obligation The members of the board of directors and all persons engaged in the business management or liquidation of the company are liable both to the company and to the individual shareholders and creditors for any losses or damage arising from any intentional or negligent breach of their duties



Criminal liability? Commission by omission 11

Organisational measures • •

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Risk analysis (Size, Activity, Partners, Geographic area) Review of the internal regulations (compliance manual or code of conduct), which concern also dealings with third party entities and/or employment contracts and or contracts for the provision of goods and services: - provision on permitted benefits (conferral and acceptance)/ authorization requirement - procedure to be followed by high risk deal - strict documentation requirements - disciplinary sanction Information and training Control and enforcement - Adequate resources - Whistleblower hotline / web-based reporting platform of Fedpol - Steps in case of suspected bribery ISO standard 37001 – ISO certificate 12

Attorneys-at-Law and Notaries Public Via Canonica 5 - P.O. Box 6280 6901 Lugano (Switzerland) Tel. +41 91 910 19 00 - Fax +41 91 910 19 01 [email protected] www.psmlaw.ch

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