Sponsored briefing: Compliance in Switzerland and abroad: Tackling corruption and white-collar crime

Fabian Teichmann and Marie-Christin Falker on how multinational corporations operating in Switzerland can improve their compliance regimes

Clients from all over the globe appreciate the security and stability of Switzerland as one of central Europe’s economic and financial powerhouses. This makes Switzerland a designated safe haven for multinational corporations, entrepreneurs, and wealthy individuals alike. On top of that, Switzerland offers advantageous taxation regimes and privacy. Unlike most other countries, Switzerland places great value on its longstanding tradition of banking secrecy.

To prevent the financial system from falling victim to abuse, Swiss lawmakers have established comprehensive compliance regulations that are detailed in the Criminal Code and the Anti-Money Laundering Act. These regulations are in line with international standards such as the FATF’s 40+9 Recommendations and the EU Anti-Money Laundering Directives. For financial service providers these regulations entail detailed know your customer and anti-money laundering checks of the highest standard. The same is true for other due diligent actors who are tasked with combating financial crime and corruption.

Especially for multinational corporations operating in Switzerland, adherence to local compliance standards is of the utmost importance. However, staying on the legal, regulatory, and ethical straight and narrow can at times be a difficult balancing act. By embedding behavioural change and appropriate incentive structures throughout the business, compliance professionals address emerging risks. When it comes to actively promoting compliant behaviour, there are a variety of options at their disposal, but not all compliance standards are created equal. Below, we propose an innovative approach to anti-corruption and money laundering that multinational corporations operating in Switzerland can utilise to stay on the safe side. After all, internal nuisances can have severe, negative consequences ranging from fines to incarceration for an enterprise and its members.

Research has shown that corruption continues to be an international issue, which is present in many corporations. Of course, this does not exclude Switzerland. One can assume that the estimated number of undetected cases is quite high, seeing as those involved in corruption and white-collar crime usually have no incentive to uncover it. The underlying problem here is information asymmetries between employees working at lower hierarchical levels and top management and owners. The latter, however, are the ones baring most of the risk, and hence have an interest in abolishing non-compliant behaviour.

Based on a qualitative study involving ten compliance experts, we propose that Swiss corporations should restructure their incentive structures to combat non-compliance. Especially when conducting business abroad, employees may be tempted to bribe a foreign public official to close a deal and receive a bonus. Instead of incentivising performance alone, Swiss corporations could implement a performance matrix that considers both sales and compliance. In order to receive a bonus, employees would need to reach a certain score in both areas, otherwise their bonus payment will be reduced or cancelled. In addition, it is important that companies have appropriate whistleblowing channels in place.

To encourage compliance and educate employees on its importance, Swiss corporations can collaborate with law firms and legal experts to conduct employee training and establish appropriate codes of conduct. The seasoned experts of our law firm are well-prepared and have the necessary expertise and experience to reliably assist corporate clients in these matters.

At Teichmann International (Schweiz) AG, we place value on qualities such as transparency, integrity, and trustworthiness. Combined with our uncompromising determination for excellence, this conviction has made our law firm eastern Switzerland’s number one address in all matters compliance. Our white-collar crime department is best known for its compliance research (especially in the areas of money laundering, corruption, whistleblowing, terrorist financing, and sanctions) as well as its handling of complex, high-profile money laundering investigations that frequently involve multiple jurisdictions and necessitate significant expertise and connections to an international network of experts.

Due to our proven expertise in the area of money laundering, lawyers from all over the world have called us for assistance in instances involving incriminated assets. In money laundering cases, our company has represented clients all around Switzerland and internationally. Bank owners, entrepreneurs, and politically exposed individuals are among our clients.

In addition to representing clients in high-profile cases, our firm provides international legal advice and assistance, as well as conducting investigations on behalf of corporate bodies and assisting in crisis management and reputation protection. This includes internal investigations of compliance breaches by employees and executives. Furthermore, to eliminate white-collar crime, our departments assist firms in developing an appropriate code of conduct, providing compliance trainings and workshops, and building secure and effective whistleblowing channels. Our white-collar crime department also counsels organisations and individuals on complex criminal law matters, which usually entail fraud or asset tracking and freezing. Moreover, we counsel businesses regarding insider trading, antitrust legislation, fraud, and other issues.