SWITZERLAND: An Introduction to White-Collar Crime
Swiss criminal law has undergone numerous changes as a consequence of the upheavals taking place on the world stage.
Sanctions
Sanctions are the most obvious example of this change. Traditionally, Switzerland has implemented sanctions issued by the United Nations Security Council. Sanctions of other bodies, in particular the sanctions of the European Union, have been subject to a case-by-case assessment and not automatically implemented. Normally, this has led to Switzerland deploying measures preventing the circumvention of the EU sanctions, but not to their adoption. However, after the Russian aggression against Ukraine in 2022, a paradigm shift took place, and Switzerland now adopts the evolving European sanctions. This new approach, together with the relevance of Switzerland as a financial hub, has led to a sharp increase in sanctions-related work for the relevant financial institutions, private practitioners and the authorities (in particular the State Secretariat for Economic Affairs SECO and the Swiss Financial Market Supervisory Authority FINMA). While we have not yet seen a large wave of enforcement actions related to sanctions issues, the number of cases is gradually increasing.
Enforcement Action
Switzerland’s relevance as a financial centre has also resulted in a steady flow of cases related to regulatory proceedings. While enforcement proceedings of FINMA against financial institutions are far from new, FINMA has tightened its enforcement actions following the downfall of Credit Suisse. Additionally, there has, in recent years, been a shift to also act against the involved individuals. As a matter of course, FINMA notifies the criminal authorities of any presumed criminal wrongdoing, resulting increasingly in separate criminal proceedings against individuals. These proceedings have become more complex in recent years, not least because the criminal authorities are increasingly relying on the administrative investigation, resulting in difficult due process issues.
Corporate Criminal Liability
Corporate criminal liability is another area going through changes, as prosecutions have become more numerous in recent years, mostly in anti-money laundering and corruption-related cases. This stands in contrast to the first ten years after corporate criminal liability was introduced in 2003, when barely any cases were prosecuted. Even today, the level of prosecution is still comparatively low and has recently drawn public criticism. For instance, Transparency International’s research has shown that only a few convictions have been registered since corporate criminal liability was introduced. The challenges for the criminal authorities are indeed considerable, in particular as they tend to focus – rightly so – on large multi-jurisdictional cases. One of the main reasons that these cases are difficult to prosecute under Swiss law lies in the fact that the prosecution needs to provide proof of the underlying offences committed by the individual perpetrators, such as foreign bribery and corruption. Doing so is not only inherently difficult, but also slow and cumbersome as the evidence must usually be obtained abroad by mutual legal assistance proceedings. As the actual bribery is regularly committed in jurisdictions with challenging access to judicial assistance, establishing and proving the underlying offence takes time and is frequently not, or not entirely, successful. Despite these challenges, the prosecuting authorities have recently been able to resolve large-scale international corruption investigations, partially in close co-ordination with foreign authorities, including authorities from the United Status and South Africa.
Federal and Cantonal Level
In Switzerland, criminal prosecution takes place at both the federal and the cantonal level, largely depending on the subject matter. Additionally, administrative authorities such as the Federal Department of Finance usually prosecute criminal offences related to their specific competencies, adding to the complexity of the criminal law system. Defending cases in this multi-layered environment is in itself challenging. When it comes to corporate criminal liability, resolving a matter is further complicated by the fact that no Deferred Prosecution Agreements exist under Swiss law. The only comparable remedy consists of Article 53 of the Criminal Code that allows the criminal authority to terminate a proceeding under restrictive conditions. In particular, only smaller cases with a maximum penalty of one year of conditional imprisonment qualify, and in addition no public and private interest in the prosecution must exist. Most importantly from a practical perspective, the accused person or entity must fully accept the incriminated facts and repair any harm caused. As if these prerequisites were not tough enough, the Federal Prosecutor’s Office has, as a matter of policy, decided not to apply Article 53 at all. Conversely, cantonal public prosecutors, such as the Geneva authorities, continue to close cases based on Article 53. This inconsistent practice is not only remarkable (and highly questionable) in itself, but also of practical relevance as Geneva in particular has, in recent years, been the focus of considerable prosecutorial activity, in no small measure due to its significance in private banking. An initiative by the former Federal Prosecutor to introduce legislation adopting Deferred Prosecution Agreements more widely failed a few years ago. While the topic is still being revisited by the authorities and private practitioners, it will likely continue to face considerable political resistance.
Speed of Process
One point that deserves to be examined critically regarding Switzerland’s approach to prosecuting white-collar crimes is the often slow speed at which cases are investigated and brought to trial. The highly international nature of the economy and the ensuing need for mutual assistance has already been mentioned as a key factor for this slowness. A more mundane reason is the fact that the Swiss Code of Criminal Procedure is still deeply rooted in the last century, despite having entered into force only in 2011. This is readily apparent when it comes to white-collar cases and their reliance on large amounts of data. How data may be confiscated and used in criminal proceedings is still very much based on how paper documents served as evidence in the past. This is obviously an ill-suited approach when dealing with gigabytes and sometimes terabytes of data. While the problem has been recognised, a recent revision of the Swiss Code of Criminal Procedure entered into force in 2024 was uninspiring, essentially shortening some time limits and introducing higher obstacles to removing privileged documents from the record. This approach fails to address the underlying fundamental issues, including the fact that electronic data is of a very different nature to documentary records. What is needed is a state-of-the art system to deal with large data volumes and properly balancing the interests of all involved stakeholders, as well as the appropriate human and technical resources for the courts and authorities.
Overall, however, Switzerland’s legal system continues to be efficient at prosecuting white-collar crime matters, contributing to Switzerland’s reputation as a financial market that punches way above the size of the country.