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Bernhard Lötscher

Partner
Head of White Collar Crime Team

CMS von Erlach Poncet Ltd.
Dreikönigstrasse 7
P.O. Box
8022 Zurich
Switzerland
Languages German, English, French

Bernhard Lötscher advises and represents corporate and private clients in economic crime matters, criminal and regulatory investigations as well as international mutual assistance in administrative, criminal and civil matters. In addition he has extensive experience in the field of anti-money laundering compliance. His practice moreover includes civil litigation and arbitration.   

Bernhard is a member of the CMS Dispute Resolution Practice Group, the CMS Anticorruption Sub-Group and the CMS Banking and Finance Practice Group.

He graduated with honours from the University of Zurich in 1990. After an internship with Union Bank of Switzerland (today UBS), he joined CMS in 1993 and was admitted to the bar in 1996. He is a partner since 2001.

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Practice head Bernhard Lötscher represents private individuals as both defendants and plaintiffs, as well as assisting international corporates with investigations, asset tracing and criminal defence. Clients appreciate the clarity he brings to complex, cross-border cases with one reporting: "He offers brilliant analysis of the facts without being too complex."

Chambers and Partners, White-Collar Crime, Switzerland, 2019

"Bernhard Lötscher is 'able to explain the subtle aspects of this field of law to lawyers and laymen alike.' Another source praises his 'excellent communication skills' and adds: 'He ensured that the interests of our company, and of our customers, were fully safeguarded.' He has experience of internal investigations into disloyal conduct and breaches of company secrets, as well as assisting with proceedings into alleged tax fraud and counterfeiting."

Chambers and Partners, White-Collar Crime, Switzerland, 2018

"Strong choice for multi-jurisdictional issues, particularly cross-border investigations. Notable expertise in advising clients from the financial services industry, covering matters such as insider trading, money laundering and fraud."

Chambers and Partners, White-Collar Crime, Switzerland, 2015

Relevant experience

  • Representing a private venture capital company in criminal and civil proceedings concerning a large scale "man in the middle" fraud (cyber-crime).
  • Representing a leading provider of artificial intelligence technology vis-à-vis Swiss regulatory bodies in connection with inquiries about suspected non-compliance with export control laws.
  • Representing a manufacturer of perfumes and scents in a criminal investigation for alleged counterfeiting; defense work involves investigation of business conduct of distributors in high risk countries.
  • Representing a Swiss group company of a commodity trading and mining concern in international judicial assistance proceedings for suspected large scale tax fraud.
  • Advising a major Swiss bank in investigation of Swiss regulatory body for alleged violation of diligence duties in handling cross-border customer relationships.
  • Counsel to a precious metals trader in connection with probes of Swiss and foreign regulatory bodies in suspected irregularities concerning precious metals trading.
  • Counsel to a group of companies active in the field of asset management in connection with regulatory and penal investigations for suspected insider trading.
  • Representing an aircraft owner company in arbitration proceedings against former operations manager.
  • Training of compliance functions and front office of the Swiss subsidiary of an international banking group on CDB 16 compliance.
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Education

  • Bar Admission (1993)
  • Internship with Union Bank of Switzerland, UBS (1990-1993)
  • Legal studies, Universities of Zurich and Lausanne (1984 − 1990)
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Memberships

  • Zurich Bar Association (ZAV)
  • Swiss Bar Association (SBA)
  • International Bar Association
  • Bankrechtliche Vereinigung
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Publications

  • Anti-Money Laundering Country Guide, Kapitel zur Schweiz, Thomson Reuters, September 2018 (co-author: Flavia Widmer)
  • The International Investigations Review – Edition 8 for Switzerland, The Law Reviews, July 2018 (together with Aline Wey Speirs)
  • CMS Guide to Anti-Bribery and Corruption Laws, June 2018 (co-author: Nino Sievi)
  • Erfüllungsklage des Käufers, in: Fischer / Theus Simoni / Gessler (editors), Kommentierte Musterklagen zum Vertrags- und Haftpflichtrecht, vol I, Zurich 2016
  • Tax deductibility of fines imposed on commercial undertakings, Criminal Law and Business Crime Newsletter, Newsletter of the International Bar Association Legal Practice Division, vol. 8(1), May 2015, pp. 12–14 (co-author: Nino Sievi)
  • Nemo Iudex in Sua Causa – No jurisdiction of the arbitrators to authoritatively rule on their own Fees, Remarks on the Swiss Federal Tribunal’s Decision 4A_391/2010 and 4A_399/2010 of 10 November 2010, 29 ASA Bulletin 1/2011, 120-128 (co-author: Axel Buhr)
  • Kann ein fingierter Verdacht auf «Betrugsdelikte und dergleichen» Amtshilfegrundlage in Steuersachen sein?, Jusletter, 18 October 2010 (co-author: Axel Buhr)
  • Abkommen Schweiz-USA in Sachen UBS: Sind dem Bundesverwaltungsgericht die Hände gebunden?, Anwaltsrevue, 15 January 2010 (co-author: Axel Buhr)
  • On the Treaty between Switzerland and USA of 19 August 2009, concerning the IRS Request for Information Exchange in the Matter of UBS Ltd, Neue Zürcher Zeitung, 17 September 2009
  • No Judicial Assistance from Switzerland in the Yukos Affair, Neue Zürcher Zeitung, 8 February 2005
  • Die Subsumption des Eigenhandels mit Rohwaren unter den Begriff der Finanzintermediation im Sinne des GwG ( co-author: Prof. Dr. iur. Niklaus Schmid), AJP, November 2002
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Lectures list

  • Zwangsvollstreckung nach ZPO, Lecture at Institut für Rechtswissenschaft, CAS Prozessführung - Civil Litigation, St Gallen, February 2018
  • Was ist gute KYC-Policy im Bereich des Transaction Monitoring?, Lecture at the Swiss Compliance Officers Meeting, Zurich, June 2017
  • Switzerland Tightening the Screws – Proposed Legislation to Implement the 2012 FATF Recommendations, Lecture at STEP Israel 15th Anniversary Conference, Tel Aviv, June 2013
  • Steuerdelikte als Vortat zur Geldwäscherei – Stand der Diskussion und Ausblick, Lecture at Verband Schweizerischer Vermögensverwalter (VSV), Revisionsseminar GwG / Standesregeln, Zurich, March 2013
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Cor­por­ate Li­ab­il­ity for Lack of Cor­rup­tion Pre­ven­tion
Cor­por­ate Crim­in­al Li­ab­il­ityCom­mod­ity trader pays Sfr 94 mil­lion for lack of or­gan­isa­tion­al cor­rup­tion pre­ven­tion.In­tro­duc­tionUn­der Swiss crim­in­al law, crim­in­al of­fences com­mit­ted with­in a cor­por­a­tion dur­ing the course of its com­mer­cial activ­it­ies may res­ult in the cor­por­a­tion's dir­ect crim­in­al li­ab­il­ity if the of­fence can­not be al­loc­ated to a spe­cif­ic in­di­vidu­al with­in the cor­por­a­tion due to the cor­por­a­tion's de­fi­cient or­gan­isa­tion (so-called 'sec­ond­ary li­ab­il­ity'; Art­icle 102(1) of the Crim­in­al Code). Moreover, a cor­por­a­tion may also be held li­able ir­re­spect­ive of any in­di­vidu­al's crim­in­al li­ab­il­ity if its de­fi­cient or­gan­isa­tion caused or failed to pre­vent the com­mis­sion of cer­tain spe­cif­ic of­fences, in­clud­ing cor­rup­tion in the pub­lic and private sec­tor, money laun­der­ing and ter­ror­ism fin­an­cing (so-called 'primary li­ab­il­ity'; Art­icle 102(2) of the Crim­in­al Code).If found guilty, a cor­por­a­tion may face a pen­alty of up to Sfr5 mil­lion (Art­icles 102(1) and 102(3) of the Crim­in­al Code). However, this pen­alty is not the largest fin­an­cial risk linked to a con­vic­tion un­der Art­icle 102 of the Crim­in­al Code – the cor­por­a­tion may also be sub­ject to the con­fis­ca­tion of the be­ne­fits de­rived from the crim­in­al con­duct (Art­icle 70 of the Crim­in­al Code). If dir­ect pro­ceeds from the crim­in­al con­duct can­not be iden­ti­fied for con­fis­ca­tion pur­poses, the cor­por­a­tion may be ordered to pay com­pens­a­tion in the same amount (Art­icle 71 of the Crim­in­al Code).On 14 Oc­to­ber 2019 primary cor­por­ate crim­in­al li­ab­il­ity was the sub­ject of a (non-pub­lished) sum­mary pen­alty or­der rendered by the Of­fice of the At­tor­ney Gen­er­al. The Of­fice of the At­tor­ney Gen­er­al con­victed a Swiss com­mod­ity trader un­der Art­icle 102(2) of the Crim­in­al Code of fail­ing to take all due or­gan­isa­tion­al meas­ures to pre­vent cor­rup­tion by its em­ploy­ees and agents.The case ex­em­pli­fies the risks for cor­por­a­tions linked with a con­vic­tion un­der Art­icle 102(2) of the Crim­in­al Code. Moreover, it gives guid­ance as to the or­gan­isa­tion­al meas­ures which are deemed reas­on­able and ne­ces­sary by the Of­fice of the At­tor­ney Gen­er­al to pre­vent acts of cor­rup­tion by em­ploy­ees and agents of the cor­por­a­tion in light of Art­icle 102(2) of the Crim­in­al Code.Of­fice of the At­tor­ney Gen­er­al's sum­mary pen­alty or­derThe Of­fice of the At­tor­ney Gen­er­al es­tab­lished the ini­tial con­di­tion trig­ger­ing cor­por­ate crim­in­al li­ab­il­ity un­der Art­icle 102(2) of the Crim­in­al Code as fol­lows (ie, the com­mis­sion of a lis­ted crim­in­al of­fence in the course of the com­mod­ity trader­'s busi­ness activ­ity).On 28 Au­gust 2018 the Swiss Fed­er­al Crim­in­al Court found a former em­ploy­ee of the com­pany guilty of brib­ing of­fi­cials in the Re­pub­lic of Congo and the Côte d'Ivoire between 2008 and 2011 in sep­ar­ate crim­in­al pro­ceed­ings. Ac­cord­ing to this fi­nal and bind­ing de­cision, the former em­ploy­ee had ac­ted to­geth­er with em­ploy­ees and the trad­ing com­pany's agents to gain ac­cess to the pet­ro­leum mar­ket in these coun­tries.Fur­ther, the Of­fice of the At­tor­ney Gen­er­al as­sessed wheth­er such acts were fostered or en­abled by the com­pany's or­gan­isa­tion­al de­fi­cien­cies. In this re­spect, the Of­fice of the At­tor­ney Gen­er­al es­tab­lished that the com­pany had taken no or­gan­isa­tion­al meas­ures to pre­vent cor­rup­tion dur­ing the peri­od un­der scru­tiny, des­pite the high risk linked to its busi­ness activ­ity (ie, oil ship­ments in two coun­tries with a high risk of cor­rup­tion). It had neither im­ple­men­ted a code of con­duct giv­ing guid­ance to em­ploy­ees for car­ry­ing out their activ­it­ies, a com­pli­ance pro­gramme nor an in­tern­al audit pro­ced­ure. Moreover, the com­pany had omit­ted to des­ig­nate staff mem­bers in charge of identi­fy­ing, ana­lys­ing and re­du­cing the risk of cor­rup­tion.Moreover, the Of­fice of the At­tor­ney Gen­er­al ruled that the com­pany had also failed to man­age the in­creased risk of cor­rup­tion in con­nec­tion with the use of in­ter­me­di­ary agents for ob­tain­ing pet­ro­leum ship­ments, to whom mil­lions of US dol­lars had been paid as com­mis­sions between 2009 and 2012. In par­tic­u­lar, the Of­fice of the At­tor­ney Gen­er­al held that the com­pany had neither em­ployed due care in re­cruit­ing the agents nor mon­itored their activ­it­ies.The Of­fice of the At­tor­ney Gen­er­al fur­ther es­tab­lished that the com­pany had ig­nored warn­ing signs and com­mit­ted sev­er­al oth­er ir­reg­u­lar­it­ies, mostly in con­nec­tion with pay­ments to agents (eg, pay­ments to off­shore com­pan­ies used by the agents, partly without any writ­ten agree­ment and partly derog­at­ing from the agree­ments in place, and back­dat­ing of sup­port­ing pay­ment doc­u­ments).The Of­fice of the At­tor­ney Gen­er­al con­cluded that by breach­ing its duty to take all or­gan­isa­tion­al meas­ures to pre­vent cor­rup­tion, the com­mod­ity trader had be­come crim­in­ally li­able pur­su­ant to Art­icle 102(2) of the Crim­in­al Code.Ac­cord­ingly, the Of­fice of the At­tor­ney Gen­er­al im­posed a fine of Sfr4 mil­lion and a com­pens­at­ory claim to skim off il­li­cit profits of ap­prox­im­ately Sfr 90 mil­lion (ac­crued in­terests in­cluded).Pre­cau­tions for cor­por­a­tionsCon­sid­er­ing the high fin­an­cial risk linked to cor­por­ate crim­in­al li­ab­il­ity un­der Swiss law, cor­por­a­tions must take par­tic­u­lar care to com­ply with the or­gan­isa­tion­al re­quire­ments for pre­vent­ing the of­fences lis­ted in Art­icle 102(2) of the Crim­in­al Code (eg, cor­rup­tion).The law does not spe­cify which or­gan­isa­tion­al meas­ures must be taken to meet the stand­ard set by Art­icle 102 (2) of the Crim­in­al Code.Ac­cord­ing to the Of­fice of the At­tor­ney Gen­er­al and doc­trine, the meas­ures must be suit­able and pro­por­tion­ate to the typ­ic­al and con­crete risks as­so­ci­ated with a cor­por­a­tion's busi­ness activ­ity as well as to its size and com­plex­ity.With re­spect to anti-cor­rup­tion, the Of­fice of the At­tor­ney Gen­er­al has con­sidered that ac­cep­ted stand­ards(6) would re­quire cor­por­a­tions to:ana­lyse the cor­rup­tion risk ac­cord­ing to the activ­it­ies car­ried out, their con­text (coun­try-re­lated risk) and the cor­por­a­tion's size;es­tab­lish a suit­able com­pli­ance pro­gramme;es­tab­lish policy, code of con­duct, in­tern­al guidelines and pro­cesses as well as em­ploy­ee train­ing con­cern­ing the fight against cor­rup­tion;en­force in­tern­al con­trol of com­pli­ance with anti-cor­rup­tion dir­ect­ives, pro­cesses and cor­res­pond­ing dis­cip­lin­ary pro­ceed­ings;es­tab­lish a pro­cess for the eval­u­ation and con­tinu­ous im­prove­ment of the anti-cor­rup­tion sys­tem; andes­tab­lish an in­tern­al alert­ing pro­cess (ie, whis­tleblow­ing).If a cor­por­a­tion car­ries out its busi­ness through agents, it must be aware of the in­creased risks re­lat­ing to the agent­s' activ­it­ies, as high­lighted by the anti-cor­rup­tion stand­ards, and take ad­di­tion­al meas­ures such as:car­ry­ing out prop­erly doc­u­mented due di­li­gence on each agent;reg­u­lat­ing the se­lec­tion pro­cess for agents;de­fin­ing the warn­ing sig­nals for de­tect­ing po­ten­tial il­leg­al activ­it­ies; andcar­ry­ing out reg­u­lar con­trol and back­ground checks, namely when pay­ing agent­s' in­voices.Com­mentCor­por­a­tions must con­sider that any in­vest­ig­a­tion ini­ti­ated against their em­ploy­ees and agents for cor­rup­tion or oth­er of­fences lis­ted in Art­icle 102(2) of the Crim­in­al Code may trig­ger their li­ab­il­ity and have severe fin­an­cial con­sequences.Such risks may be en­hanced if the in­vest­ig­ated in­di­vidu­als chose to col­lab­or­ate with the pro­sec­u­tion au­thor­it­ies to ob­tain a more fa­vour­able judg­ment with­in ac­cel­er­ated pro­ceed­ings (Art­icle 358 et se­qq of the Crim­in­al Pro­ced­ur­al Code), as was the case for the Swiss com­mod­ity trader. In ac­cel­er­ated pro­ceed­ings, the ac­cused ad­mits to the facts es­sen­tial for the leg­al ap­prais­al of the case (Art­icle 358(1) of the Crim­in­al Pro­ced­ur­al Code). In a sub­sequent crim­in­al pro­ceed­ing against a cor­por­a­tion un­der Art­icle 102(2) of the Crim­in­al Code, the pro­sec­u­tion au­thor­it­ies will usu­ally rely on these facts to es­tab­lish the ex­ist­ence of a lis­ted crim­in­al of­fence trig­ger­ing the com­pany's crim­in­al li­ab­il­ity.There­fore, cor­por­a­tions should plan their de­fence strategy from the be­gin­ning as soon as crim­in­al in­vest­ig­a­tions have been ini­ti­ated against one of their em­ploy­ees or agents. This art­icle was pub­lished in the White Col­lar Crime News­let­ter of the In­ter­na­tion­al Law Of­fice on 23 Decem­ber 2019 by Bernhard Lötscher and Mar­zia Schil­leci.
Anti-Cor­rup­tion: Trends and De­vel­op­ments in Switzer­land
Anti-Cor­rup­tion: Trends and De­vel­op­ments in Switzer­landCMS Switzer­land’s law­yers Bernhard Lötscher, Nino Sievi and Aline Wey Speirs ana­lyse the most sig­ni­fic­ant trends and provide a broad­er dis­cus­sion of key de­vel­op­ments in the field of com­bat­ing cor­rup­tion. <em­phas­is role="strong">Cor­rup­tion – Not an Is­sue in Switzer­land?</em­phas­is>The con­sist­ent top rank­ing in Trans­par­ency In­ter­na­tion­al’s Cor­rup­tion Per­cep­tions In­dex sug­gests that cor­rup­tion is not a con­cern in Switzer­land. Since the start of the sur­vey by Trans­par­ency In­ter­na­tion­al, Switzer­land has nev­er been ranked lower than 12th, and in 2017 it im­proved to third place with a score of 86 out of a pos­sible 100 points. Pub­lic au­thor­it­ies in Switzer­land gen­er­ally en­joy a high level of trust. Con­fid­ence in the ju­di­cial sys­tem is reg­u­larly rated amongst the highest in Coun­cil of Europe Mem­ber States. Oth­er in­ter­na­tion­al in­dices – such as the World Bank’s Con­trol of Cor­rup­tion In­dic­at­or and the Rule of Law In­dex – con­firm the per­cep­tion of Switzer­land as a coun­try where both the pub­lic and the private sec­tors are re­mark­ably re­si­li­ent against cor­rup­tion.However, per­cep­tion is not ne­ces­sar­ily equal to real­ity. Mar­tin Hilti, the dir­ect­or of Trans­par­ency In­ter­na­tion­al Switzer­land, has re­cently com­men­ted on Switzer­land’s cur­rent score in the Cor­rup­tion Per­cep­tion In­dex: “We have been in the top ten for years. On the oth­er hand, this in­dex only meas­ures the per­cep­tion of cor­rup­tion, and not ac­tu­ally ex­ist­ing cor­rup­tion. It does, moreover, not meas­ure is­sues re­lated to cronyism and places em­phas­is on the pub­lic sec­tor, where­as in Switzer­land it is mainly the private sec­tor that is prob­lem­at­ic. So, des­pite the pos­it­ive as­pect of these res­ults, it is ne­ces­sary to see the wider pic­ture”.In­deed, ac­cord­ing to the 2017 EMEIA Fraud Sur­vey by Ernst & Young, 18% of the in­di­vidu­als in­ter­viewed in Switzer­land af­firmed that bribery and cor­rupt prac­tices were wide­spread in Swiss busi­ness life. This fig­ure marks a sharp in­crease as com­pared to 2013, when only 10% con­sidered cor­rup­tion to be com­mon in the busi­ness sec­tor.Also, in the pub­lic sec­tor real­ity ap­pears to dif­fer from gen­er­al per­cep­tion. For ex­ample, in Decem­ber 2016, sev­er­al in­di­vidu­als were sen­tenced to im­pris­on­ment of up to three years for bribery of pub­lic of­fi­cials between 2007 and 2010 in con­nec­tion with a ma­jor IT pro­ject of the fed­er­al ad­min­is­tra­tion. Fur­ther, on the basis of a crim­in­al re­port filed by the State Sec­ret­ari­at for Eco­nom­ic Af­fairs (SECO), the Of­fice of the At­tor­ney Gen­er­al of Switzer­land opened a crim­in­al in­vest­ig­a­tion in 2014 against the head of de­part­ment of the SECO Sys­tems Op­er­a­tion and Tech­no­logy unit and oth­ers on sus­pi­cion of un­faith­ful con­duct and pass­ive bribery in con­nec­tion with the award­ing of IT con­tracts to private vendors. Fi­nally, con­vic­tions were handed down in cases of cor­rup­tion re­lat­ing to a ma­jor IT pro­ject of the Swiss tax ad­min­is­tra­tion for mul­tiple un­faith­ful con­duct, mul­tiple ac­cept­ance of be­ne­fits and mul­tiple grant­ing of be­ne­fits. The latest scan­dal con­cerns a pur­portedly private trip of a mem­ber of the gov­ern­ment of the can­ton of Geneva to Abu Dh­abi at the ex­pense of the emir­ate’s crown prince.However, do­mest­ic cor­rup­tion con­tin­ues to be per­ceived as be­ing of much less­er im­port­ance than Switzer­land’s ex­pos­ure to for­eign bribery. The coun­try’s eco­nomy is highly ex­port-ori­ented with ex­ports ac­count­ing for nearly two-thirds of the GDP. Switzer­land’s fin­an­cial centre holds a share of ap­prox­im­ately 26% of the glob­al mar­ket in for­eign wealth man­age­ment. Stable politico-ju­di­cial con­di­tions and an open eco­nomy have, moreover, at­trac­ted a large num­ber of mul­tina­tion­al busi­nesses act­ive in in­ter­na­tion­al trade. These in­clude sec­tors such as com­mod­ity trad­ing or phar­ma­ceut­ic­als which are prone to for­eign cor­rup­tion.Last but not least, Switzer­land is home to many in­ter­na­tion­al sports as­so­ci­ations such as FIFA, UEFA and the In­ter­na­tion­al Olympic Com­mit­tee, to name only a few. In par­tic­u­lar, the crim­in­al pro­ceed­ings con­duc­ted against FIFA of­fi­cials since 2015 in the USA and Switzer­land have re­vealed that non-trans­par­ent and clandes­tine pro­cesses have been com­mon in sports or­gan­isa­tions for many years and con­tin­ue to be a chal­lenge. <em­phas­is role="strong">Strength­en­ing of Anti-money Laun­der­ing to Com­bat Bribery Of­fences</em­phas­is>The 2017 an­nu­al re­port of the Fed­er­al Of­fice of Po­lice notes that the Money-laun­der­ing Re­port­ing Of­fice (MROS) re­ceived more than 4,600 sus­pi­cious activ­ity re­ports re­lat­ing to money laun­der­ing dur­ing that peri­od, which marks an in­crease of nearly 60% from 2016. Among the pre­dic­ate of­fences re­por­ted, cor­rup­tion was the clear lead­er. Stat­ist­ic­al data provided by the Of­fice of the At­tor­ney Gen­er­al like­wise show that ap­prox­im­ately one-third of all money-laun­der­ing cases in­vest­ig­ated at a fed­er­al level are as­so­ci­ated with for­eign bribery.A com­mon fea­ture of for­eign bribery is the use of (pre­dom­in­antly for­eign) leg­al en­tit­ies and ar­range­ments such as dom­i­cil­i­ary com­pan­ies and trusts. Pur­su­ant to a re­port of the Co­ordin­a­tion Group on Com­bat­ing Money Laun­der­ing and Ter­ror­ist Fin­an­cing of Novem­ber 2017, more than 38% of cor­rup­tion cases in­volved dom­i­cil­i­ary com­pan­ies.The rules on pre­ven­tion of money laun­der­ing and, in par­tic­u­lar, the le­gis­lat­ive dis­pos­it­ive en­sur­ing trans­par­ency of leg­al per­sons and ar­range­ments, are there­fore per­ceived by in­ter­na­tion­al or­gan­isa­tions – in­clud­ing the OECD Work­ing Group on Bribery in In­ter­na­tion­al Busi­ness Trans­ac­tions (OECD Work­ing Group) – as pivotal to de­tect and ef­fect­ively com­bat cor­rup­tion. From an OECD per­spect­ive, a ma­jor loop­hole of the Swiss leg­al frame­work is the con­tinu­ing ab­sence of re­port­ing ob­lig­a­tions for pro­fes­sion­als such as law­yers, aud­it­ors and ac­count­ants un­der the Anti-Money Laun­der­ing Act (AMLA).In line with in­ter­na­tion­al ex­pect­a­tions and per­sist­ent calls for ac­tion, the gov­ern­ment is­sued on 1 June 2018 a con­sulta­tion draft pro­pos­ing inter alia the ex­ten­sion of the AMLA’s scope of ap­plic­a­tion to pro­viders of cer­tain ser­vices (defined in the con­sulta­tion draft as “ad­visers”). Rel­ev­ant ser­vices com­prise: (i) es­tab­lish­ment, man­age­ment and ad­min­is­tra­tion of for­eign com­pan­ies, leg­al ar­range­ments such as trusts and Swiss dom­i­cil­i­ary com­pan­ies; (ii) pro­cure­ment of funds in re­la­tion to any of the activ­it­ies men­tioned in (i), sale or pur­chase of such com­pan­ies or trusts; (iii) al­low­ing one’s ad­dress to be re­gistered as the seat of a com­pany or trust; (iv) act­ing as nom­in­ee share­hold­er for a for­eign com­pany or help­ing an­oth­er per­son to such po­s­i­tion; as well as (v) pre­par­at­ory (and hence ad­vis­ory or, re­spect­ively, con­sultancy) ser­vices in re­la­tion to any of these activ­it­ies.When es­tab­lish­ing a busi­ness re­la­tion­ship, ad­visers shall hence­forth veri­fy the iden­tity of the cus­tom­er, es­tab­lish the iden­tity of the be­ne­fi­cial own­er and cla­ri­fy the eco­nom­ic back­ground and the pur­pose of the ser­vices re­ques­ted by the cus­tom­er. Re­spect­ive in­form­a­tion needs to be re­cor­ded in writ­ing. If the KYC ob­lig­a­tions can­not be com­plied with, ad­visers will be pro­hib­ited from en­ter­ing in­to, or ob­liged to ter­min­ate, the busi­ness re­la­tion­ship. The same will ap­ply if ad­visers know or have reas­on­able grounds to sus­pect that a busi­ness is con­nec­ted to a crim­in­al or­gan­isa­tion, to fin­an­cing of ter­ror­ism or to money laun­der­ing. Fail­ure to ter­min­ate the busi­ness re­la­tion­ship may en­tail a fi ne of up to CHF500,000. Th e con­sulta­tion draft does not fore­see a spe­cif­ic duty for ad­visers to re­port sus­pi­cious trans­ac­tions or re­la­tion­ships to the money-laun­der­ing re­port­ing of­fice (in con­trast to fin­an­cial in­ter­me­di­ar­ies and traders who are sub­ject to a re­port­ing duty pur­su­ant to Art­icle 9 AMLA). Ad­visers will, how­ever, have to un­der­go com­pli­ance audits on an an­nu­al basis, and aud­it­ors shall be held to re­port vi­ol­a­tions of the ad­visor’s di­li­gence du­ties to the gov­ern­ment.The con­sulta­tion draft has met stiff op­pos­i­tion, not­ably be­cause it in­ter­feres with well-es­tab­lished priv­ilege rules ap­ply­ing to leg­al ad­vis­ory work. Fur­ther­more, it ig­nores the fact that law­yers, not­ar­ies, aud­it­ors and oth­er pro­fes­sion­als are today already sub­ject to the pro­hib­i­tion of money laun­der­ing as stip­u­lated in Art­icle 305bis of the Swiss Pen­al Code, which con­sti­tutes a reas­on­ably strong in­cent­ive to stay clear from any acts that could be seen as aid­ing and abet- ting money laun­der­ing. Fi­nally, the pro­posed law, as it does not provide for a re­port­ing duty of ad­visors, would still fall short of what is be­ing de­man­ded by the OECD. It is doubt­ful, there­fore, that the pro­posed le­gis­la­tion will stand the test of par­lia­ment­ary de­lib­er­a­tion. <em­phas­is role="strong">Whistle-blower pro­tec­tion still In­ad­equate </em­phas­is>An­oth­er point of cri­ti­cism is the ab­sence of a con­cise leg­al frame­work gov­ern­ing whistle-blower pro­tec­tion. The OECD Work­ing Group con­tin­ues to con­sider the situ­ation in Switzer­land as crit­ic­al in this re­gard, not­ing in its Phase 4 Re­port (ad­op­ted on 15 March 2018) that, in ad­di­tion to the leg­al con­straints res­ult­ing from the in­ad­equate reg­u­lat­ory frame- work, whistle-blowers were still meet­ing al­most uni­ver­sal mis­trust in Switzer­land. The eval­u­ation team was con­fron­ted dur­ing its on-site vis­it in Septem­ber 2017 with strong, deep- rooted cul­tur­al res­ist­ance to people who break the si­lence and dare to re­port wrong­do­ing.True, in the private sec­tor there is cur­rently no spe­cif­ic law on whistle-blow­ing. Swiss law does not re­quire com­pan­ies to set up a spe­cif­ic in­tern­al unit or plat­form al­low­ing em­ploy­ees to re­port con­fid­en­tially.Un­der the in­flu­ence of pub­lic and mar­ket pres­sure for com­pli­ance with best prac­tice, many cor­por­a­tions have nev­er­the­less es­tab­lished mech­an­isms to en­cour­age re­port­ing of sus­pec­ted mis­con­duct. Re­cent stud­ies show that 11% of all com­pan­ies in Switzer­land have in­tro­duced a re­port­ing point. Con­sid­er­able dif­fer­ences ex­ist between large in­ter­na­tion­al cor­por­a­tions where the ma­jor­ity of the des­ig­nated in­tern­al and/or ex­tern­al re­port­ing points are to be found (70%) and smal­ler to me­di­um-sized en­ter­prises where such re­port­ing points are still rare (less than 10%).The pub­lic sec­tor is clearly ahead of the private sec­tor in terms of en­cour­aging and pro­tect­ing whistle-blowers. Since 2011, em­ploy­ees of the fed­er­al gov­ern­ment must re­port crim­in­al con­duct to the pen­al au­thor­it­ies and may in­form the Swiss Fed­er­al Audit Of­fice about sus­pec­ted ir­reg­u­lar­it­ies. In 2017, the fed­er­al gov­ern­ment also in­tro­duced an of­fi­cial and se­cured di­git­al plat­form where pub­lic em­ploy­ees or private per­sons can re­port sus­pec­ted mis­con­duct an­onym­ously.The Fed­er­al Of­fice for Po­lice (fed­pol) is op­er­at­ing a web- based plat­form for re­port­ing on sus­pec­ted cor­rup­tion. The plat­form safe­guards the an­onym­ity of the re­port­ing in­di­vidu­als and neither stores the IP ad­dresses, time or metadata that may al­low iden­ti­fic­a­tion of the per­son or of com­puter used to make the re­port. Sub­sequently, fed­pol re­views each re­port for crim­in­al rel­ev­ance be­fore for­ward­ing it to the com­pet­ent in­tern­al of­fice, ex­tern­al agency (eg, can­ton­al po­lice) or, in case of ir­reg­u­lar­it­ies with­in the fed­er­al ad­min­is­trat­ive units, to the Fed­er­al Audit Of­fice for fol­low-up ac­tion.On 21 Septem­ber 2018 the Swiss gov­ern­ment has passed a draft bill, yet to be ap­proved by par­lia­ment, to even­tu­ally in­tro­duce le­gis­la­tion on whistle-blow­ing in the private sec­tor. Pending com­ple­tion of the le­gis­lat­ive pro­cess, an in­creas­ing num­ber guidelines and re­com­mend­a­tions for com­pli­ance and best prac­tices shape the real­ity. Swiss com­pan­ies are aware of the need to es­tab­lish re­port­ing sys­tems, en­dorse com­pany policies for trans­par­ency and to draft rule books and guidelines for their em­ploy­ees – not only with a view to avoid­ing the po­ten­tially severe con­sequences of cor­por­ate crim­in­al li­ab­il­ity, but also the of­ten even more dev­ast­at­ing repu­ta­tion­al dam­age that may res­ult from in­volve­ment in cor­rupt prac­tices. Pub­lished in Cham­bers Glob­al Prac­tice Guide, Anti-Cor­rup­tion, 2019
27/08/2018
Amend­ments to Anti-money Laun­der­ing Act
On 1 June 2018 the Fed­er­al Coun­cil ini­ti­ated the con­sulta­tion on a num­ber of amend­ments to the Anti-money Laun­der­ing Act. The draft bill marks the third bundle of le­gis­lat­ive meas­ures to com­pre­hens­ively im­ple­ment the re­com­mend­a­tions of the Fin­an­cial Ac­tion Task Force in its latest mu­tu­al eval­u­ation re­port on Switzer­land.As a first step, on 4 Septem­ber 2017 the Fin­an­cial Mar­ket Su­per­vis­ory Au­thor­ity pub­lished a draft amend­ment to its anti-money laun­der­ing or­din­ance that in­tro­duced: en­hanced veri­fic­a­tion du­ties for es­tab­lish­ing be­ne­fi­cial own­ers;a re­quire­ment to reg­u­larly re­view and up­date know-your-cus­tom­er (KYC) in­form­a­tion also in re­spect of cli­ent re­la­tion­ships not in­volving par­tic­u­lar risks; new mon­it­or­ing du­ties en­com­passing op­er­a­tions abroad; and new cri­ter­ia for clas­si­fy­ing a re­la­tion­ship or trans­ac­tion as 'high risk'.The re­vised or­din­ance is sched­uled to come in­to force in 2018.A second bundle of le­gis­lat­ive meas­ures that fo­cused on in­creas­ing the trans­par­ency of leg­al en­tit­ies and pro­posed ab­ol­ish­ing bear­er shares was pub­lished for con­sulta­tion on 17 Janu­ary 2018.This pub­lic­a­tion provides an over­view of the pro­posed new rules.

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15 April 2020
New rank­ings from "The Leg­al 500" for CMS Switzer­land
19 April 2017
No by­passing of rules guar­an­tee­ing due pro­cess in the field of ju­di­cial...
In­tro­duc­tion In or­der to fa­cil­it­ate and ex­ped­ite the ex­change of in­form­a­tion with for­eign ju­di­cial au­thor­it­ies in crim­in­al mat­ters, Swiss  pro­sec­ut­ing au­thor­it­ies and not­ably the fed­er­al pro­sec­utor's...
12 March 2020
Top-Rank­ings for CMS Switzer­land by Cham­bers and Part­ners
Wir freuen uns mit­teilen zu können, dass 14 un­ser­er An­wäl­tinnen und An­wälte in 10 Rechts­ge­bi­eten in der im März 2020 ver­öf­fent­licht­en Aus­gabe von Cham­bers and Part­ners Europe em­pfohlen wer­den.
21 June 2016
New crim­in­al pro­vi­sions on cor­rup­tion in private sec­tor to enter in­to force
White Col­lar Crime, Switzer­land In­tro­duc­tion On Septem­ber 25 2015 Par­lia­ment ad­op­ted amend­ments to the Pen­al Code in­tro­du­cing new pro­vi­sions on cor­rup­tion in the private sec­tor (1) The amend­ments will...
23 December 2019
Cor­por­ate Li­ab­il­ity for Lack of Cor­rup­tion Pre­ven­tion
Cor­por­ate crim­in­al li­ab­il­ity: com­mod­ity trader pays Sfr94 mil­lion for lack of or­gan­isa­tion­al cor­rup­tion pre­ven­tion. Read more about on cms.law
29/04/2019
Co­oper­a­tion with for­eign ju­di­cial au­thor­it­ies
The Fed­er­al Su­preme Court re­cently ruled that a Swiss-based as­set man­age­ment com­pany's dis­clos­ure of cli­ent in­form­a­tion to US au­thor­it­ies with a view to fa­cil­it­at­ing the con­clu­sion of a non-pro­sec­u­tion agree­ment vi­ol­ated Art­icle 271 of the Crim­in­al Code.
07 March 2019
Top rank­ings for CMS Switzer­land by Cham­bers and Part­ners
CMS Switzer­land is de­lighted to an­nounce that 14 law­yers across 10 prac­tice areas have been re­com­men­ded in the 2019 edi­tion of Cham­bers & Part­ners Europe, pub­lished in March 2019.
21 February 2019
Anti-Cor­rup­tion: Trends and De­vel­op­ments in Switzer­land
CMS law­yers give you on 'Cham­bers Glob­al Prac­tice Guide - Anti Cor­rup­tion' an over­view of cur­rent trends and de­vel­op­ments in Switzer­land.
20 December 2018
New draft bill on private sec­tor whis­tleblow­ing
The in­ad­equacy of whis­tleblower pro­tec­tion in Switzer­land has been widely cri­ti­cised for years. Des­pite the le­gis­la­tion on pub­lic sec­tor whis­tleblow­ing which was in­tro­duced in 2011, there is no con­cise leg­al frame­work spe­cific­ally ad­dress­ing re­spect­ive is
09 October 2018
Crim­in­al li­ab­il­ity of as­set man­agers for not dis­clos­ing ret­ro­ces­sions
The Fed­er­al Tribunal rendered a judg­ment con­firm­ing an as­set man­ager­'s con­vic­tion of crim­in­al mis­man­age­ment for fail­ing to dis­close ret­ro­ces­sions re­ceived from a cus­todi­an..
27/08/2018
Amend­ments to Anti-money Laun­der­ing Act
On 1 June 2018 the Fed­er­al Coun­cil ini­ti­ated the con­sulta­tion on a num­ber of amend­ments to the Anti-money Laun­der­ing Act. This pub­lic­a­tion provides an over­view of the pro­posed new rules.
June 2018
CMS Guide to Anti-Bribery and Cor­rup­tion Laws
We are de­lighted to present the fifth edi­tion of the CMS Guide to Anti-Bribery and Cor­rup­tion Laws. This edi­tion of the Guide cov­ers more coun­tries than ever be­fore, as­sess­ing the laws in 42 coun­tries. We in­clude full cov­er­age of the BRIC na­tions, as well