IMPLEMENTING THE OECD ANTI-BRIBERY CONVENTION PHASE 4 REPORT: Switzerland This Phase 4 Report on Switzerland by the OECD Working Group on Bribery evaluates and makes recommendations on Switzerland's implementation of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and the 2009 Recommendation of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions. It was adopted by the OECD Working Group on Bribery on 15 March 2018. The report is part of the OECD Working Group on Bribery’s fourth phase of monitoring, launched in 2016. Phase 4 looks at the evaluated country’s particular challenges and positive achievements. It also explores issues such as detection, enforcement, corporate liability, and international cooperation, as well as covering unresolved issues from prior reports. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. 2 Table of contents EXECUTIVE SUMMARY ................................................................................................................... 4 INTRODUCTION .................................................................................................................................. 5 1. Previous evaluations of Switzerland by the Working Group ........................................................... 5 2. Phase 4 process and on-site visit ...................................................................................................... 5 3. The economic situation and foreign bribery risks ............................................................................ 6 4. Foreign bribery cases ...................................................................................................................... 10 A. DETECTION OF THE FOREIGN BRIBERY OFFENCE .................................................. 13 A.1. Whistleblower protection ........................................................................................................... 13 A.2. Self-reporting .............................................................................................................................. 16 A.3. Measures to prevent money laundering ...................................................................................... 17 A.4. Detection through the federal and cantonal authorities .............................................................. 22 A.5. Foreign authorities ...................................................................................................................... 23 A.6. Media .......................................................................................................................................... 23 B. ENFORCEMENT OF THE FOREIGN BRIBERY OFFENCE .......................................... 25 B.1. The foreign bribery offence ........................................................................................................ 25 B.2. Investigation and prosecution: the institutional framework ........................................................ 28 B.3. Foreign bribery: investigation and prosecution .......................................................................... 33 B.4. Concluded cases and recourse to so-called “special” procedures ............................................... 38 B.5. Sanctions ..................................................................................................................................... 42 B.6. International co-operation ........................................................................................................... 53 C. THE LIABILITY OF LEGAL PERSONS ............................................................................. 59 C.1. The liability of legal persons ...................................................................................................... 59 C.2. Mobilising the private sector ...................................................................................................... 65 D. MISCELLANEOUS ISSUES ................................................................................................... 68 D.1. Accounting standards ................................................................................................................. 68 D.2. Tax measures .............................................................................................................................. 70 D.3. Public advantages ....................................................................................................................... 71 D.4. Official development assistance ................................................................................................. 72 CONCLUSION .................................................................................................................................... 75 Good practices and positive achievements ......................................................................................... 75 Recommendations of the Working Group .......................................................................................... 76 ANNEX 1: SWITZERLAND: IMPLEMENTATION SINCE PHASE 3 ....................................... 82 ANNEX 2: SUMMARY OF SANCTIONS IMPOSED IN FOREIGN BRIBERY CASES: JUDGMENTS SINCE PHASE 3 ........................................................................................................ 87 ANNEX 3: “SPECIAL” PROCEDURES .......................................................................................... 89 ANNEX 4: RELEVANT LEGISLATIVE PROVISIONS ................................................................ 90 ANNEX 5: PHASE 3 RECOMMENDATIONS OF THE WORKING GROUP AND WRITTEN FOLLOW-UP ..................................................................................................................................... 103 ANNEX 6: LIST OF PARTICIPANTS AT THE ON-SITE VISIT .............................................. 106 3 EXECUTIVE SUMMARY This Phase 4 report by the OECD Working Group on Bribery in International Business Transactions evaluates and makes recommendations on Switzerland’s implementation of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. The report details Switzerland’s specific achievements and challenges in this regard, including with respect to the implementation of measures to combat foreign bribery, as well as the progress made by Switzerland since its Phase 3 evaluation in December 2011. Since that evaluation, Switzerland can pride itself on the significant rise in the number of prosecutions and convictions for foreign bribery: six natural persons and five legal persons were convicted in five cases. A large number of foreign bribery cases were under investigation at the time of writing this report. The Working Group would like to draw attention in particular to the significant level of enforcement by the Federal Office of the Attorney General that is having an impact at a national and international level. Nevertheless, Switzerland is expected to step up its foreign bribery enforcement efforts. The Working Group will be particularly vigilant in this respect, given that several court decisions may have favoured a restrictive interpretation of both the offence and corporate liability. In relation to concluded cases, the Working Group regrets that the sanctions imposed are not effective, proportionate or dissuasive as provided for in the Convention, particularly in relation to legal persons, and that this is likely to alter the dissuasive effect of these convictions. Finally, concluded cases should be published and their content disclosed to the fullest extent possible, to make authorities’ law enforcement efforts better known, and render them more predictable and transparent. This is all the more important in view of the fact that the vast majority of concluded foreign bribery cases have, to date, been resolved outside of court using procedures that do not necessarily involve a judge. The Working Group also commends Switzerland for its proactive policy on seizure and confiscation and its use of firmly established practice in this field that produces results. It further notes Switzerland’s active involvement in mutual legal assistance (MLA) and its adoption of practices, such as proactive MLA, to further improve co-operation. Therefore, it supports the reform of Swiss law on MLA currently underway in order to formalise proactive MLA and foster even more timely and effective international co-operation. Regarding detection, the Working Group commends the key role played by the MROS, the Swiss Financial Intelligence Unit, in detecting foreign bribery and would like to see it continue. It notes that lawyers, notaries, accountants and auditors are not in a position to contribute to such detection because they are not subject to the anti-money laundering framework, in contrast to what is required by international standards. Finally, the Working Group regrets the absence of a legal and institutional framework to protect whistleblowers in the private sector and calls for prompt reforms in this field. The report and its recommendations reflect the findings of experts from Austria and Belgium and were adopted by the Working Group on 15 March 2018. The report is based on the legislation, data and other documents supplied by Switzerland,