Swiss Firms Escape Criminal Charges, Non-Profit Criticizes
Swiss prosecutors are reluctant to pursue criminal charges against companies over wrong-doing, fomenting the opacity of secretive industries like commodities trading, according to a non-profit organization.
Just a handful of companies have been prosecuted under a
2003 Swiss law which holds firms accountable for corporate wrong-doing like
money laundering or corruption, Transparency International wrote in a study
released on Monday. None are recorded in the criminal register, and efforts to
do so have been foiled by parliament.
The deft use of simplified proceedings legal proceedings
cloaks investigations in secrecy, which means some of the largest financial and
commodities scandals to play out in Switzerland never come to light.
Switzerland remains the world’s largest money haven as well as the world’s
biggest hub for buying and selling commodities, with more than a one-third
share of oil trading, according to Public Eye.
The issue is hugely timely: Credit Suisse and Falcon Private
Bank both face charges related to money laundering and corruption. The first is
ensnared in a Bulgarian drug ring, while the latter allegedly laundered money
siphoned from Malaysia’s 1MDB state fund.
Scant Cases
Transparency’s Swiss chapter called for more effective
enforcement of the law as well as more incentives for companies to police
themselves, self-report, and cooperate. «The application of corporate criminal
law is afflicted with a serious lack of transparency, TI said.
Adding to the opacity, Switzerland’s attorney general
doesn’t disclose either convictions or settlements, from expedited, private
procedure comparable to a U.S. non- or deferred prosecution agreement. TI said
it identified just 12 convictions since the law came into force in 2003.
Those included Odebrecht’s Swiss subsidiary, which paid 4.5
million Swiss francs ($5 million) five years ago in connection with bribery and
money laundering, and commodities trader Gunvor, which paid 94 million francs
16 months ago over bribery in Africa.
Speedy Justice
Settlements are by far the weightiest instrument: more than
90 percent of all criminal cases taken up by prosecutors are settled via a
so-called summary penalty order. Companies generally prefer this route because
it means no indictment or public trial and not even a court hearing – the
attorney general itself acts as the issuing judge.
Switzerland fails to bring many corporate cases to book
because of four key factors, TI said: most graft cases come to light through
whistleblowers, but the alpine nation’s protection of them is notoriously poor.
TI also identified gaps in Swiss law on corporate liability, difficulty in
evidence-gathering, and structural deficiencies with the Swiss prosecutor as
other key factors.
Inadequate Resources
The attorney general may not have enough investigators to
conduct complex, demanding cases, when Petrobras, 1MDB, and FIFA alone soak up
much of its resources, TI said. The office has been reorganized several times,
most recently in 2016. Last year, Switzerland’s attorney general Michael Lauber
stepped down last year amid accusations of a botched FIFA corruption trial.
TI laid out a roster of demands on prosecutors, lawmakers,
as well as companies themselves including better legal protection for
whistleblowers, the potential to levy larger fines, and an end to summary
penalty orders for major cases – and for minor to moderate cases to be heard by
a court.
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