Swiss Blocking Statute: update on do’s and don’ts under the threat of criminal sanctions

Embedded in Art. 271 of the Swiss Criminal Code (SCrC),[1] the Swiss Blocking Statute provides for a criminal sanction in case of a breach thereof. Under this provision, it is an offence to carry out (i) an act reserved to a public authority performed in favour of a foreign State, (ii) on Swiss territory, (iii) without legal entitlement and/or ad hoc authorisation from the Federal Department of Justice and Police (FDJP) and (iv) with a wilful intent to act. Acts falling within the public authority include typically service or taking of evidence in support of foreign proceedings.

As a political offence, Art. 271(1) SCrC is prosecuted ex officio by the Office of the Attorney General of Switzerland (OAG) upon prior authorisation by the Swiss Federal Government (Art. 66 of the Swiss Act on the Organization of the Federal Criminal Authorities).

Depending on the circumstances, the Swiss Blocking Statute may prevent parties located in Switzerland from collaborating with foreign authorities in the context of pending proceedings abroad. As such, the Swiss Blocking Statute is often raised as a defence to requests of taking of evidence issued by foreign courts. However, some jurisdictions like the UK or the US tend to disregard it on the assumption that the Swiss Blocking Statute is only theoretical and leads to no prosecution in practice.[2]

This assumption has however been proven false by recent cases which led to prosecution and resulted in lengthy and costly proceedings before the Swiss Federal Supreme Court.

The most relevant case is that of the CEO of Swisspartners, a Zurich company, who was convicted by the OAG for an offence under Art. 271(1) SCrC and sentenced to a conditional monetary penalty of 160 days of CHF 1’650 each (i.e. CHF 264’000) and a probation period of two years for having allegedly self-reported 109 “US-Tax subjects” clients to the US Department of Justice in view of obtaining a Non Prosecution Agreement for Swisspartners. He objected against the penal ordinance and the case was brought before the Swiss Federal Criminal Court (FCC). By decision of 9 May 2018,[3] the FCC acquitted him, finding that when acting, he had relied on two legal opinions provided by a law professor as well as a Swiss law firm stating that providing data to the DOJ should not necessarily trigger the application of the Swiss Blocking Statute, noting however that this was a grey area and arguments for the applicability of Art. 271(1) SCrC to the case at hand could not be excluded so that a residual risk of breach remained. The FCC therefore held that the CEO did not have the intent to commit a criminal offence.

The decision of the FCC was reversed on appeal by the Swiss Federal Supreme Court[4] which held that the legal opinions, although “cautiously optimistic”, did not expressly rule out a possible infringement of the Swiss Blocking Statute and considered that there was residual risk of a violation of Art. 271(1) SCrC. The Swiss Federal Supreme Court further expressed concerns as to the independence of the legal opinions, knowing in particular, that the Swiss law firm was entrusted with other matters for the same company. Consequently, the Swiss Federal Supreme Court ruled that the CEO should not have relied on the legal opinions but should have remained cautious as to the red flags contained therein. The case was again remanded to the FCC and is still pending.

Recent OAG statistics have also shown that prosecution for violations of the Swiss Blocking Statute is a concrete risk. Between 2014 and 2018, the OAG opened twelve criminal proceedings for breach of Art. 271(1) SCrC, which resulted to date in the issuance of:

• Two indictments (i.e. requests for trial before the FCC);
• Four penal ordinances (with sentences to conditional penalties of 40 to 120 days amounting from CHF 30 to 1’000 each, and immediately payable fines from CHF 300 to 500, plus costs proceedings); and
• Three acquittals.

Such cases related to the direct service of foreign judicial documents (in particular, summonses to appear before foreign courts, foreign claims for payment and foreign bankruptcy decisions) by private individuals (some of them foreign lawyers) to companies and/or individuals located in Switzerland, as well as to the hearing of witnesses on Swiss soil by foreign individuals (some of them being foreign public officials).

These decisions, as well as the Swisspartners’ case show that Swiss criminal prosecution authorities do not take breaches of the Swiss Blocking Statute lightly. Sanctions for breach of the Swiss blocking statute are therefore not theoretical and caution is recommended, in particular where a company or an individual located in Switzerland is required to participate in civil proceedings abroad involving coercive measures and/or the collection of evidence which is not directly and immediately available to the concerned party.

As a precaution, it is advisable to request an ad hoc formal authorisation from the FDJP, as provided for in Art. 31 of the Ordinance on the Organization of Swiss Government and Administration (OOSGA), before taking any step which may result in a breach of the Swiss Blocking Statute. Said procedures are usually handled promptly by the FDJP and a decision can be obtained in a few weeks in some cases. Recent case law shows in fact that the FDJP rejected multiple authorisation requests on the grounds that the contemplated acts did not fall within the scope of the Swiss Blocking Statute,[5] thus excluding any risk of criminal sanction for the parties involved.

In conclusion, it is better to be safe than sorry. As shown by recent case law, risks of breach of the Swiss Blocking Statute are not taken lightly by Swiss authorities and should be assessed carefully to avoid criminal sanctions.

References 

[1] Decision of the Federal Criminal Court dated 25 April 2013 para. 4.2.3 (case reference: BB.2012.133); decision of the Federal Criminal Court dated 29 January 2013 para. 2.1 (case reference: SK.2012.20) confirmed by decision of the Swiss Supreme Court dated 22 July 2013 para. 1.4 (case reference: 6B_235/2013); decision of the FDJP dated 10 April 2014 published in JAAC on 26 January 2016, 2016.3 (p. 32-37).

[2] Decision of the FDJP dated 12 February 2014 published in JAAC on 26 January 2016, 2016.4 (p. 38-43)

[3] Case reference: SK.2017.64

[4] Decision of the Swiss Federal Supreme Court dated 4 December 2018 (case reference: 6B_804/2018)

[5] Decision of the FDJP dated 10 April 2014 published in JAAC on 26 January 2016, 2016.3 (p. 32-37), decision of the FDJP dated 14 February 2014 published in JAAC 2016.4 (p.38–43), decision of the FDJP dated 11 April 2016 published in JAAC 2016.7 (p. 56–61), decision of the FDJP dated 27 October 2016 published in JAAC 2016.8 (p. 62–70).