ECBA Autumn Conference Programme Substantive Issues ... · • $ 150 million scandal ... • Nike...

Substantive Issues - Corruption in Sports

Carla Gabriela Reyes

ECBA Autumn Conference Programme

Substantive Issues - Corruption in Sports 1 October 2016 Page 2/15

Switzerland

> Attractive base for International sports organizations > 38 International sports bodies in Switzerland (Among others

International Baseball Federation, International Olympic Committee , FIFA, UEFA, International Ski Federation etc.)

> Perceived to be one of the countries less affected by corruption; however, regular amendments to the criminal law on corruption are necessary


Domestic Framework until recently

> Until recently, the Swiss Criminal Code provided for : Active and passive domestic corruption (art. 322 ter and 322

quater of the Swiss Penal Code, SPC) Active and passive domestic bribery (art. 322 quinquies and

322 sexties SPC) Active corruption of foreign public officials (art. 322 septies

1 SPC) (Introduced into Swiss legislation on 1 May 2000) Passive corruption of foreign public officials (art. 322 septies

2 SPC) (Criminalised since 1 July 2006)


Sports organization?

> Sports organizations as legal entities under Swiss private law and their officials cannot be categorised as public officials in the meaning of the Swiss criminal code (SPC)

> No criminal liability for bribery in the SPC according to the law until

recently


Swiss recent revisions of the anti-bribery and corruption law

> Until very recently, private sector bribery was regulated by the Federal

Unfair Competition Act (art. 4a of the UCA) (became an offense as of 1 July 2006) Criminal offence only if it leads to a distortion of competition Needed a criminal complaint

> Very few people prosecuted under art. 4a of the UCA



> What triggered recent revisions? Recommendations from GRECO Scandal in international sports organizations such as FIFA



May 27, 2015

Baur au Lac Hotel, Zurich



> 2015 FIFA Corruption Case: $ 150 million scandal Media a marketing rights Nike scandal 2010 FIFA World Cup Host 2011 FIFA presidential election 2018 and 2022 World Cup bids, Some 40 individuals and entities following an investigation into corruption in football's world governing body FIFA


Swiss recent revisions - Art. 322 octies and 322 novies SPC

> Integration of private corruption in the Swiss Penal Code: Art. 322

octies and 322 novies SPC replace Art. 4a (cum 23) UCA > Goal of the revision:

Symbolic value of the SPC (Kernstrafrecht) The link between private sector bribery and unfair competition has

been removed The new offences are so-called public offences and are

prosecuted ex officio, except in light cases > New rules entered into force on July 1, 2016


Undue advantages

> Examples of undue advantages : cash or cash equivalent gifts charitable donations Interest in a project services or favours trips or entertainment loans Ferrari, Yacht

> Art. 322 decies 1 SPC: threshold


Corporate Criminal Liability

> Under art. 102 SPC, a limited number of offences (including bribery of

private individuals) will trigger corporate criminal liability regardless of whether a specific individual is punishable, provided that the enterprise has not taken all the organizational measures necessary and reasonable to prevent the criminal conduct.

> Both the offender and the legal entity can be held liable, thereby

leading to a cumulative criminal liability of the legal entity and its officer / employee.


Sanctions

> Private corruption:

> 3 years or a fine up to CHF 1.08 mio. > Criminal corporate liability:

> Fine up to 5 mio > Disgorgement :

> Profits stemming from a business deal concluded through bribes may be forfeited

> Reputational damage


Limits and Other major changes in Switzerland

> Private corruption is considered a misdemeanour under Swiss law and can therefore not be a predicate offence to money-laundering ( GREGO suggestions)

> However, further to OECD / FATF recommendations, the money-

laundering regulations have been tightened: the definition of PEP has been extended cash transactions exceeding CHF 100000.- must be scrutinized serious tax offences are considered as a predicate offence to

money-laundering


Practical Takeaways

> No need of distortion of competition to prosecute private corruption > No need of a criminal complaint > Independent corporate liability - Fine up to 5 mio > Not a predicate offence to money laundering

> Consequences in MLA proceedings dual criminality


Carla Gabriela Reyes [email protected] Schellenberg Wittmer Ltd / Attorneys at Law 15bis, rue des Alpes / P.O. Box 2088 / 1211 Geneva 1 / Switzerland T +41 22 707 8000 / F +41 22 707 8001 www.swlegal.ch

Questions & Comments

GENEVA / ZURICH / SINGAPORE

Substantive Issues - Corruption in SportsSwitzerland Domestic Framework until recently Sports organization? Swiss recent revisions of the anti-bribery and corruption lawSwiss recent revisions of the anti-bribery and corruption lawSwiss recent revisions of the anti-bribery and corruption lawSwiss recent revisions of the anti-bribery and corruption lawSwiss recent revisions - Art. 322 octies and 322 novies SPCUndue advantages Corporate Criminal LiabilitySanctionsLimits and Other major changes in Switzerland Practical Takeaways Slide Number 15

ECBA Autumn Conference Programme Substantive Issues ... · • $ 150 million scandal ... • Nike...

Documents

Transcript of ECBA Autumn Conference Programme Substantive Issues ... · • $ 150 million scandal ... • Nike...