One topic on the agenda at next week’s OECD Integrity Forum is “Settling Foreign Bribery Cases with Non-Trial Resolutions.” As explained here, a principal reason for a session on settlements is the concern that developing countries are losing out on them. When the bribe-taker is a developing country official and the bribe-payer employed by a transnational corporation, the case is most often resolved through a settlement in the country where the corporation is headquartered. And the developing nation’s interests are often ignored.
A notorious example is the bribery of Nigerian officials by the American company Halliburton. The company settled the case with U.S. authorities for $559 million; years later it settled with Nigeria for $35 million, just over six percent of what the U.S. extracted. Yet which country suffered the most from the bribery? And which one is more pressed for resources?
Countries with civil law legal systems offer a solution that common law nations would well advised to consider: allow the victim government to participate as a party to the criminal proceeding with the right to file a claim for damages and indeed to help in gathering evidence for the prosecution. Swiss law provides one example employed by several countries which have been victimized by corruption.
Reflecting the worldwide move to give crime victims a greater say in the proceedings brought against the accused, chapter three of the Swiss Criminal Procedure Code accords victims of a crime in Switzerland a panoply of rights including rights to safeguarding his or her personal privacy, to protection from retaliation for coming forward, and to information about the case against the defendant. Importantly for governments injured by corruption, article 118 of the code gives the victim the right to participate as a private claimant (“partie plaignante”) in the investigation, prosecution, and trial of the defendant. A private claimant can review the evidence the prosecution has gathered, suggest additional lines of inquiry, and submit a claim for damages to be adjudicated as part of the criminal matter.
In a 2012 decision, the Swiss federal criminal court (“Bundesstrafgericht” or “Tribunal pénal federal”), ruled that the government of Tunisia could be admitted as a private claimant in the case arising from the massive corruption perpetrated by its recently deposed President Zine El Abidine Ben Ali. On January 19, 2011, days after Ben Ali had fled the country, the Swiss federal prosecutor opened a case against one of Ali’s associates alleging that the associate had laundered the proceeds of corruption in Swiss banks and participated in a criminal organization headed by Ben Ali. An order freezing the associate’s Swiss assets was issued for if either charge were proved, the assets were subject to forfeiture.
On October 21, the Tunisian government asked the prosecutor to admit it as a private claimant in accordance with article 118. The prosecutor agreed but gave the Ali associate until November 10 to object. Although the associate did, the prosecution nonetheless granted the request. The associate appealed.
The appellant raised two claims in opposition to admitting the government of Tunisia as a private claimant. The first was that it was not a “victim” as that term is defined in the Swiss Code of Criminal Procedure, and hence could not invoke article 118, and second, that were it admitted, the government would be able to circumvent the tight reign of secrecy that cloaks Swiss criminal proceedings. (Indeed, the secrecy reaches even to the names of the parties in a published decision. The appellant in the decision here is identified only as an “Ali associate.”) The appellant claimed that once the government of Tunisia was granted access to the information in the prosecution’s file, it would use it to pursue criminal cases in Tunisia.
The court easily rejected appellant’s claim that the government of Tunisia was not entitled to “victim” status under Swiss law. If appellant were found either to have laundered corruption proceeds in Switzerland or to have been a member of Ben Ali’s criminal organization, Tunisia would have been robbed of state resources and the government of Tunisia a victim of the robbery.
On the use of information from the Swiss investigation to open cases in Tunisia, the Tunisian government had anticipated this objection and in its request for admission as a private claimant had stated that it would not. The government had separately submitted a request for mutual legal assistance to Swiss authorities and represented it would only use information received through that channel. While acknowledging the representation, in its decision the court directed “the Republic of Tunisia to provide the federal prosecutor with a formal and unqualified commitment not to use, directly or indirectly, the information obtained in the course of the present criminal proceedings, or other related criminal proceedings, for the needs of any criminal, civil or administrative procedure in Tunisia.”
Making the victim government party to a criminal case brought in the court of another country is one way to assure that its rights are protected and its interests considered in any settlement. It surely merits consideration by nations without such a procedure, and governments victimized by corruption need to be on the alert to participate in cases in countries where such a procedure is already in place.
Those looking for more on the Swiss law and jurisprudence will find a wealth of materials by entering “partie plaignante Switzerland” in any search engine.
Thanks for this helpful summary of how Switzerland deals with this vexing problem. A couple of questions for you:
1) Would or should the approach be any different if, in contrast to the Tunisia case, there has not been a change in government/regime? To take an extreme example, should Equatorial Guinea be able to intervene in a case against Teodoro Obiang, on the logic that the Equatorial Guinea was the “victim” of misappropriation by the President and his family?
2) Would or should the same procedure apply in a case that did not involve embezzlement from the victim state itself, but instead involved a foreign firm bribing a government official? These are often conflated in these discussions of sharing recoveries with victim countries, but they’re not the same (and as you know if you’ve read my prior posts on the subject, I think the conflation is a big problem). You open the post talking about the Halliburton case in Nigeria, but that didn’t involve the US recovering any money stolen from the state of Nigeria — it involved the US imposing fines on a US-listed company that had paid bribes to Nigerian officials. In the Switzerland-Tunisia case, as I understand it, the Tunisian government asserted that state resources had been stolen by Ben Ali & Co.
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