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White collar crime Q&A
Are there any new regulations or court decisions that have affected your practice?
We have increasing SCC and FCPA proceedings, as well as the Bribery Act in Great Britain. Many subsidiary companies in the US or UK will have to obey the new regulations and behave in compliance.
When considering the specific fields of tax evasion and tax fraud in relation to Germany and Switzerland, a point of interest is the treaty signed in both countries with an amnesty and a clause on how to deal to with tax evasion. The treaty allows people to remain unknown to the German tax authorities if Switzerland is taking care of the payment of the taxes. It is not clear in the German legislative process if there will be consent with all parties involved. The Swiss public, and banking institutions in particular, are very curious about the outcome, which will lead to many clients asking if they should make use of the German amnesty rules possible under the tax laws, or if they should choose the anonymous solution offered by the treaty. It is a question of numbers and the amount of payment on one hand, and anonymity on the other.
Heiko Ahlbrecht, Wessing & Partner, Germany
There has been an improvement in the money laundering regulations because of new European legislation ... It is to be implemented in a French vote, giving the regulations new power.
The French Supreme Court has recently decided that people have the right to be assisted by a lawyer from the beginning of the custody period, which was not the case before.
Sophie Scemla, Heenan Blaikie, France
In January, a new package concerning financial and economic crimes became law. One important change is a new deposition about tax crimes and new anti-money laundering laws, with the new crime penalising self-laundering. The second important change is that corporations and legal entities, not just physical individuals, will have criminal liability in Argentina. Due to this, some international banks with offices in Argentina have decided to leave the country, as … these banks were unable to deduce if their activity of private banking would be considered a crime.
Roberto Durrieu Jr, Estudio Durrieu Abogados, Argentina
There have recently been some amendments regarding the prosecution authority established in 2009. The new organisation, now called the White Collar Crime and Anti Corruption Prosecution Authority, was set up in 2011. It has gained more importance, handles much bigger cases, is better staffed … and now has more powers. They have extended the competencies for the authority so it can be responsible for any white collar crime case in Austria that causes damage incurring costs over €5 million.
In relation to human resources, the idea was to involve trained auditors and forensic accountants, in addition to lawyers and prosecutors, in order to match the prosecution authority's knowledge with the defendant's side.
Bettina Knötzl, Wolf Theiss, Austria
The new code of criminal procedure that came into force on January 1 2011 is having a lot of impact on the profession … The set-up and framework have changed to the effect that there is only one uniform code for all of Switzerland, and therefore the same rules are applied everywhere. It also means federal jurisdictions are now gaining momentum, and are more important than they were beforehand. In various cases of white collar crime, the Federal Court system will be dealing with federal prosecutors rather than local prosecutors. In addition, a few of the idiosyncrasies of local procedure have disappeared. For instance, we no longer have trial by jury in Geneva. Investigation matters will no longer be presented through civil magistrates, but instead will be presented by prosecutors. The whole concept of criminal procedure is dominated by the figure of the prosecutor.
Paul Gully-Hart, Schellenberg Wittmer, Switzerland
What are the main concerns you are hearing about from your clients?
The top three concerns are fraud, prevention of money laundering, and prevention of tax offences. Our criminal justice system is very active in this field, as they want to work on prevention and avoid any problems, particularly tax offence problems.
Roberto Durrieu Jr, Estudio Durrieu Abogados, Argentina
The speed of proceedings is not high enough.
Bettina Knötzl, Wolf Theiss, Austria
One great concern is the anti-corruption legislation dealing with international corruption. They want to implement compliance programmes to make sure that employees respect [worldwide] anti-corruption regulations.
Sophie Scemla, Heenan Blaikie, France
Three big concerns include business relationships between German companies and countries with embargos at the company level; how to deal with corruption and bribery; and losing employees (sometimes a whole company) with intellectual knowledge of the business model to another company. Every year we have four to five cases in this area, and the same questions are presented regarding business secrets, breach of trust and embezzlement. Another point is a growing tendency to take a look at M&A transactions from a criminal point of view.
Heiko Ahlbrecht, Wessing & Partner, Germany
One important topic is corruption. A second topic is stock trading confidentiality and insider trading. Insider trading has been a problem in the last two years, with a big focus on fair stock trading.
Cato Schiřtz, Schjřdt, Norway
Cyber crime is the biggest concern. It is considered a new area of white collar crime although it has been around for some time. Only recently are businesses seeing the effect of what international syndicates can do. It is difficult for businesses to manage this, as it is very difficult to track syndicates when remote access to email boxes and internet sites are all that are available. In addition there is the problem of dealing with privacy issues where hacking is concerned.
Another concern is the new procurement fraud. Financial statement fraud is also a concern at the moment due to the state of the economy and the creative accounting being employed by people.
Dave Loxton, Werksmans, South Africa
The main concern for clients on the defence's side is the issue of the unbalanced playing field regarding disclosure. A second issue is the severity of penalties in terms of jail time and excessive fines. The third area is the issue of the corresponding penalties of disqualification of directorship, and the uncertainty involved.
Hamidul Haq, Rajah & Tann, Singapore
What are the main trends you are currently seeing with regard to your practice area?
I think the biggest trend being witnessed is the international cooperation with syndicates in the criminal world. There is cooperation between criminals within cyberspace to target a particular business. There is also the positive trend of more cooperation between law enforcement [agencies] in different jurisdictions.
Dave Loxton, Werksmans, South Africa
Compliance is a hot topic at the moment. Awareness of the importance of a code of conduct and the appropriate training seems to have started in the banking area and progressed to internationally-acting companies. It is now moving down from the big companies to smaller-scale, cross-border-acting companies. Geographic movement is also visible. The issue began in the US, and slowly proceeded to the western part of Europe where the countries all amended their anti-corruption laws. There will be another amendment coming this year in Austria, and that is slowly spreading to our neighbours in the east. This is a slow development, and I believe it will take many years before we are happy with the situation. However, it is a good start.
Bettina Knötzl, Wolf Theiss, Austria
An important trend we have noticed is the acceptance by corporations related to banks, such as financial institutions and brokers, to include experts in prevention of fraud and crime on their board of directors.
Roberto Durrieu Jr, Estudio Durrieu Abogados, Argentina
The fight against international corruption has increased. There are more proceedings dealing with corrupt payments or suspicion of corrupt payments, and there is a new trend towards internal investigations which are usually conducted by large law firms. Corporations are seeking to improve their internal compliance programmes or responding to official investigations, and there is a greater trend toward putting together internal investigations within corporations. There is also a trend toward compliance programmes within banks and corporations (mostly commercial companies).
Switzerland has had to adapt its policy towards other countries in relation to tax evidence, and there is now more exchange with other countries of tax information. Switzerland has agreed to the new standard of the OECD, which has led to more tax exchanges. The country has reviewed a large number of bilateral treaties in tax matters to facilitate the exchange of tax information.
There is now a greater propensity for prosecutors to fight cases, in order to engage in proceedings for money laundering or corruption and international cases of bribery. There is plenty of mutual assistance and regulatory assistance for the exchange of information between regulators.
Paul Gully-Hart, Schellenberg Wittmer, Switzerland
There are many fraud cases in the real estate sector in the Netherlands at the moment, while semi-governmental institutions are also under investigation.
Aldo Verbruggen, Wladimiroff Advocaten, Netherlands
What do you expect over the next 12 months?
I am not expecting new legislation in the coming year. I think we have a system of white collar crime that is perfectly applicable now.
Raf Verstraeten, Eubelius, Belgium
I expect some major investigations that focus on transportation and processing of waste material; international VAT cases; and some major fraud cases in the real estate sector.
Aldo Verbruggen, Wladimiroff Advocaten, Netherlands
Are there any recent deals or developments that are noteworthy? Why?
A development that is noteworthy is the well known case of the Minister of Police being convicted of corruption. The prosecution and conviction of a very high-ranking government official shows that the authorities are prepared to investigate high-ranking civil servants.
Dave Loxton, Werksmans, South Africa |