In 2017 and 2018, a large number of bribery cases, mainly regarding bribery of foreign officials, were under investigation by the OAG. Also, the OAG opened a number of criminal investigations into the corporate criminal offense of failing to prevent bribery or money-laundering. A number of cases have become public via the media but have not yet been formally targeted by prosecutors.
Brazil - Lava Jato
On 21 December 2016, the OAG convicted the Brazilian company Odebrecht SA and one of its subsidiaries, Construtora Norberto Odebrecht SA (Odebrecht), for organisational failure to prevent bribery of foreign officials under article 102(2) SCC and fined Odebrecht 4.5 million Swiss francs and ordered disgorgement of more than 200 million Swiss francs of illicit profits.
The Odebrecht case is important because it demonstrates the OAG’s determination to investigate highly complex cases and to also hold large foreign companies accountable for organisational failures under article 102(2) SCC. In its decision, the OAG followed recent case law by the Supreme Court (in the Postfinance case) that requires evidence for at least one predicate offence (though without the need for a conviction of an employee, as clearly stated in the law) to hold the company accountable for the organisational compliance failure. Also, the OAG for the first time stated that the economic viability of a company constitutes a limit for the disgorgement of illicit profits under articles 70 and 71 SCC.
To date, financial assets related to the Lava Jato and Petrobras investigations of more than 1 billion Swiss francs have been frozen by the OAG. The OAG is particularly concerned to ensure that these assets are returned to the damaged parties.
The UK Serious Fraud Office (SFO) is conducting a criminal investigation into the activities of Unaoil, a Monaco-based company providing industrial solutions to the energy sector in the Middle East, Central Asia and Africa. The SFO is investigating Unaoil for suspected bribery and money laundering and has charged four individuals with conspiracy to make corrupt payments to secure the award of contracts in Iraq to Unaoil’s client SBM Offshore. The company itself has also been charged.
The SFO has also started an investigation into a British subsidiary of the Swiss company ABB based on suspicions of bribery.
Bank Julius Bär
The OAG has recently opened criminal proceedings against an employee of the Swiss state-owned defence company RUAG. The OAG suspects violations of the War Materials Act that prohibits the export of certain defence materials. The investigation regards defence material exports to Russia and involves the Moscow subsidiary of Bank Julius Bär. The OAG conducted a dawn raid at RUAG’s premises in May 2018. The suspected criminal offence by the employees was reported by RUAG itself.
Bank Julius Bär is also affected through the conviction in the US of one of its former bankers who pleaded guilty in August 2018 of helping to launder US$1.2 billion in the context of illicit deals with Venezuela’s state-owned oil producer Petroleos de Venezuela. The bank is also involved in the investigations by US authorities of the International Federation of Football Associations (FIFA). One former banker pleading guilty in a New York federal court in June 2017 for channeling money from an Argentinian sports-marketing company to FIFA officials.
The OAG and also foreign authorities have been investigating various alleged criminal acts related to FIFA since 2014. Among those were investigations of bribery, criminal mismanagement and money laundering in connection with the awards of the 2018 and 2022 FIFA World Cups.
Based on information gathered in pending proceedings, in 2017 the OAG initiated a new case against Jérôme Valcke (former FIFA Secretary General), Nasser Al-Khelaifi (Managing Director of the BEIN MEDIA GROUP LLC) and a sports rights businessman. The investigations are conducted, inter alia, on grounds of suspicions of private bribery (article 4a (1) in conjunction with article 23a UCA).
There are multiple domestic and foreign investigations surrounding FIFA. The former Brazil Football Federation president José Maria Marin has been sentenced to four years in prison by a United States federal court following his conviction for corruption. The 86-year-old was one of seven Fifa officials arrested at a Zurich hotel in May 2015. Following a six-week trial, Marin was found guilty in December 2017 on six of the seven counts against him of money laundering, wire fraud and conspiratorial racketeering. The sentencing took place in Brooklyn, New York, by a US District Judge. Marin, who has already served 13 months in prison, was also ordered to forfeit US$3.3 million and was fined US$1.2 million.
The Brazilian is the first official to be sentenced following the US Department of Justice investigation into corruption at football’s world governing body. Juan Ángel Napout, the former president of South American football’s governing body Conmebol, was also found guilty of corruption charges at the same time as Marin. The Paraguayan was convicted of racketeering conspiracy and two wire fraud charges. He has been sentenced to nine years for his part in the FIFA bribery scandal and he must forfeit US$3.37 million and pay a fine of US$1 million.
In 2018, Novartis came under public scrutiny because it engaged US President Donald Trump’s former lawyer, Michael Cohen, as a consultant and made payments to his offshore company. In a one-year contract with Cohen’s consulting firm, Essential Consultants, Novartis and Cohen also addressed the topic of drug pricing. The OAG refrained from opening criminal proceedings against Novartis for lack of sufficient suspicion of bribery. The US Senate Finance committee started an investigation into this matter and issued a report on 12 July 2018 showing that Novartis’s relationship with Cohen lasted six months longer than initially claimed. This case caused the departure of Novartis’ General Counsel.
The French courts charged the French cement giant Lafarge SA with complicity in crimes against humanity and financing terrorists, for allegedly paying material sums to Jihadists, including the Islamic State group, to keep a factory open in Syria. The company, whose Syrian subsidiary paid the armed groups through intermediaries, has also been charged with endangering the lives of former employees at the cement plant in Jalabiya, northern Syria.
A panel of three judges in Paris ordered Lafarge to hand over €30 million to authorities as a security deposit ahead of the trial. Eight former executives, including the former chief executive have been charged with financing a terrorist group or endangering the lives of others over Lafarge’s activities in Syria between 2011 and 2015. The investigations are now also directed against Lafarge itself. Lafarge is suspected of paying nearly €13 million to Isis and other militant groups to keep the Jalabiya plant running long after other French companies had pulled out of Syria. The payments by Lafarge Cement Syria subsidiary were considered a tax in exchange for which militants allowed free movement of the company’s staff and goods inside the war zone, according to investigators. It is claimed that some of the cash was also used to buy petrol and other materials from suppliers close to Isis. Lafarge, which merged with the Swiss firm Holcim in 2015, after the activity in Syria took place, immediately said it would appeal against the charges, insisting that the company as a whole is not responsible.
Roche was named as a defendant in a complaint filed in October 2017 by veterans wounded in the Iraq War from 2005 to 2009 as well as families of soldiers killed during that period. The lawsuit claims that Roche bribed terrorist groups running the Iraqi health ministry to obtain lucrative deals, ultimately supported terrorist activities that led to the deaths of US military members. Subsequently, the supplies were allegedly sold on the black market with proceeds used to pay for weapons used against US forces. According to the complaint, officials running the health ministry’s import subsidy under Saddam Hussein’s regime routinely pushed foreign suppliers for kickbacks on deals awarded through the United Nation’s Oil-for-Food programme. After Hussein’s government fell, the ministry was controlled by a Shiite terrorist group known as Jaysh al Madhi, and the payments possibly continued. The US Department of Justice is making inquiries into whether the Swiss firm Roche was aware that drugs and medical equipment given to the Iraqi government were used for nefarious reasons. Roche denies any involvement in corruption.
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