Criminal liability of corporations entered into force in Switzerland in October 2003 although only a small number of prosecutions have been conducted against corporations so far most notably the failed Swiss Post CASE– see below.  However, as evidenced by recent the Coutts affair and public announcements from the Office of the Attorney General of Switzerland in connection with the so-called 1MDB scandal, the latest trend seems to be launching more systematically criminal investigations against corporations (such as financial institutions).

The legal situation

1. A Swiss or foreign corporation may be held criminally liable for any misdemeanor or crime that was committed within itself in the course of its commercial activities,
   1. if and provided that the offence cannot be attributed to a determined natural person due to the corporation’s deficient organisation (Article 1021 of the Swiss Criminal Code (SCC) – so-called secondary liability).
   2. in connection with a limited number of offences (including money laundering, corruption in the public or private sector, and terrorism financing), a corporation’s criminal liability may also be engaged irrespective of the criminal liability of the natural persons, if its deficient organisation caused or failed to prevent the commission of the offence (article 102II SCC – so-called primary liability).
2. If found guilty, a corporation
   1. faces a monetary penalty of up to CHF 5 million (approximately S5.1 million).
   2. may also have its assets confiscated if they are tainted.

Swiss Post Case Summary

1. In early February 2005. An account opened by a company with Swiss Post was used to receive €5 million (approximately $5.5 million), which stemmed from a fraudulent scheme.
2. Shortly after, the company director withdrew CHF 4.6 million in cash. According to his explanations (which were later found to be untrue), he needed this for the purchase of a gemstone.

Criminal Considerations that followed.

3. Swiss Post was accused under article 102II SCC of having failed to take the necessary steps and implement an appropriate organisation which would have prevented acts of money laundering.
4. However, the proceedings relating to suspicions of money laundering engaged against the employees who were involved in the preparation of the CHF 4.6 million that were handed over in cash to the fraudster, were discontinued in the course of the investigation, for lack of intention.
5. Moreover, the prosecution authorities never extended the investigation to the Swiss Post compliance officer who had been contacted by the chief cashier and approved the transaction before the amount was paid out.

Guilty

6. Swiss Post was found guilty of money laundering by the court of the first instance of Solothurn in April 2011 and sentenced to a fine of CHF 250. 000.

Verdict overturned

7. This verdict was eventually overturned, and Swiss Post was fully acquitted by the Court of Appeal in November 2015.
8. This acquittal was challenged by the Public Prosecutor of Solothurn before the SFSC because
   1. the alleged criminal liability of a corporation based on article 102II SCC should also apply where the objective and subjective elements of an underlying offence (in the case of money laundering) cannot be imputed to a determined individual but to the corporation as such.
9. The Swiss Federal Supreme Court (SFSC) addressed in a milestone decision of October 11, 2016.
10. The SFSC dismissed the appeal and affirmed the approach of the Court of Appeal.
11. It ruled that a corporation’s criminal liability under Swiss law require actual proof that all the objective and subjective constitutive elements of an offence committed by at least one individual within the corporation are fulfilled. This applies not only in the context of Article 1021 SCC.
12. Where the corporation’s deficient organisation makes it impossible to impute the underlying offence to a determined person, but also about article 102II SCC.
13. Where this deficient organisation caused the commission of the offence.
14. The fact that a corporation’s criminal liability may be engaged under article 102II SCC irrespective of the criminal liability of the natural persons only means that the prosecution or conviction of such persons is not required for this provision to apply.
15. According to the SFSC – There is no room for a causal liability, and the corporation shall be acquitted (or, as the case may be. the investigation against it discontinued) if the prosecution authorities fail to prove the fulfilment of the underlying offence. The authorities also have to prove that the corporation’s organisation was defective.

PostFinance, the financial services arm of Swiss Post, has been fined SFr250,000 ($283,000) for failing to detect a money laundering scam.

1. In 2011 PostFinance was the fisrt Swiss financial institution to ben sanctioned under money laundering laws which require financial services to investigate the origins of suspicious money transfers.
2. The case dates back to February 2005, and a cash transfer of SFr4.6 million made to a PostFinance account held in the name of a director of a Dutch investment company.
3. Although PostFinance had verified that the account was not blocked, it did not conduct sufficient checks on the origins of the money, the Administrative Court of Canton Solothurn ruled.
4. In fact, the money belonged to two clients who had deposited SFr5 million with the Dutch investment company the previous day. The money has never been recovered.
5. PostFinance announced it would appeal the decision.

6. APR 21, 2011 – 10:24 http://www.swissinfo.ch/eng/postfinance-fined-for-money-laundering-scam/30056082