Financial Crime World

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Financial Crimes Act in Switzerland: Key Offences, Investigation, and Prosecution

The Swiss Financial Market Supervisory Authority (FINMA) and the Office of the Attorney General of Switzerland are responsible for investigating and prosecuting financial crimes. The key offences applicable to companies and their directors and officers include:

  • Fraud
  • Money laundering
  • False accounting
  • Tax evasion
  • Market abuse
  • Corruption
  • Sanctions

Company Liability

Companies can be held criminally liable if they fail to prevent or detect financial crimes committed by their employees or agents. The courts will consider the company’s compliance procedures and whether it has implemented adequate internal controls to prevent such crimes.

Director and Officer Liability

Directors and officers of companies are personally at risk of prosecution for a range of offences, including:

  • Fraud
  • Money laundering
  • Market abuse

The Swiss Criminal Code sets out specific penalties for these offences, which can include imprisonment and fines.

Investigation and Prosecution

The lead prosecuting authorities responsible for investigating and prosecuting financial crime in Switzerland are FINMA and the Office of the Attorney General. These bodies have a range of powers to conduct investigations, including:

  • Conducting raids
  • Seizing documents and evidence

Interviews conducted during an investigation are typically recorded or transcribed, and interviewees have the right to be represented by a lawyer and to remain silent. However, there is no absolute right to silence, and failure to cooperate with an investigation can be considered a factor in determining guilt.

Cooperation with Foreign Authorities

Swiss laws governing financial crime have extraterritorial effect, catching conduct committed by Swiss nationals or companies operating overseas. The authorities commonly cooperate with foreign authorities under bilateral agreements and international treaties.

Legal professional privilege protects communications between lawyers and clients from being produced or seized by financial crime authorities. However, there are exceptions to this rule, such as where the lawyer is involved in a criminal conspiracy or where the communication relates to illegal activity.

Rights of Companies and Individuals

Companies and individuals have rights to privacy and data protection during a financial crime investigation, but these rights may be limited in certain circumstances.

Prosecution Factors

There is no doctrine of successor criminal liability in Switzerland. Prosecuting authorities must consider a range of factors before deciding whether to charge an individual or company with a financial crime, including:

  • The seriousness of the offence
  • The likelihood of conviction

Evidential Standard and Statute of Limitations

The evidential standard required to secure conviction is generally considered to be “beyond reasonable doubt”. There is no statute of limitations for criminal matters in Switzerland, but there are some exceptions.

Deferred Prosecution Agreements and Non-Prosecution Agreements

Deferred prosecution agreements and non-prosecution agreements are commonly used to resolve financial crime issues falling short of a prosecution. Plea bargaining is not a common practice in Swiss criminal proceedings. However, companies may be able to avoid prosecution by cooperating with the authorities and providing full disclosure of any wrongdoing.

Penalties for Conviction

The courts typically impose fines and imprisonment on individuals and corporates convicted of financial crimes. Companies may also face other penalties, such as reputational damage and loss of business.

Compliance Procedures

Compliance procedures are evaluated by the financial crime authorities, who consider whether a company has implemented adequate internal controls to prevent financial crimes. Businesses can protect themselves by implementing robust compliance procedures and reporting any suspicious activity to the authorities.

Recent Investigations and Prosecutions

In recent years, there have been several high-profile investigations and prosecutions for financial crimes in Switzerland, including cases involving fraud, money laundering, and market abuse. The authorities are actively pursuing individuals and companies who engage in financial crime.

Conclusion

Overall, Switzerland has a strong reputation for combating financial crime, and its laws and regulations provide a robust framework for investigating and prosecuting these types of offences.