Legal Developments

21 August 2012 – Confirmation that the forfeiture of the Swiss bank account of a Brazilian Judge was not statute-barred Switzerland, Brazil

Former President of the Regional Labour Court of Sao Paulo Nicolau dos Santos Neto had been convicted in Brazil in 2002 for fraud, embezzlement, corruption, unfaithful management and money laundering in the context of the works of the new court building he supervised between 1992 and 1998, for a total cost of US$165 million, of which at least US$86 million was embezzled and US$6.8 million was paid to a Geneva bank account owned by dos Santos between 1991 and 1994. In parallel with the Brazilian criminal proceedings, the Attorney General of Geneva initiated criminal proceedings for money laundering in 2000, to which the Federative Republic of Brazil participated as party suing for damages (represented by FraudNet member for Switzerland, Monfrini Crettol & Associés, Geneva). Upon the conclusion of the investigation, the Attorney General of Geneva issued in 2009 a non-conviction based forfeiture order against the bank account and allocated the forfeited assets to Brazil as the victim of the crimes. The order was opposed and appealed against by dos Santos, who notably claimed that the forfeiture was statute-barred. In a decision 6B_688/2011 of 21 August 2012 (in French), the Federal Court, Switzerland’s supreme court, ruled that when assets in Switzerland which are the proceeds of crimes committed abroad are forfeited, the applicable statute of limitation is that of the predicate offence under the law of the jurisdiction where that predicate offence took place. Visit our Resources and Publications pages for material on the same topics: Corruption, Forfeiture, Money Laundering, (from FraudNet member for Switzerland, Yves Klein, of Monfrini Crettol & Associés, Geneva).

7 June 2012 – StAR launches Grand Corruption Database project

The Stolen Asset Recovery Initiative of the World Bank and United Nations Office on Drugs and Crime (StAR Initiative ) has launched the Grand Corruption Database project, which compiles large-scale corruption cases that were filed between 1980 and 2011. The database is part of the StAR study, The Puppet Masters: How the Corrupt Use Legal Structures to Hide Stolen Assets and What to Do About It and covers cases that involve the misuse of at least one legal entity or legal arrangement to obscure beneficial owners, and conceal the origin and/or destination of stolen assets worth at least US$ 1 million. It mentions several asset recovery case on which FraudNet members are currently working: Abacha Case, Ben Ali Case, Mubarak Case, Duvalier Case, Maluf Case, Trinidad and Tobago Piarco Airport Case, etc. Visit our Resources and Publications pages for material on the same topics: Corruption, Money Laundering, Companies, Trusts (from FraudNet member for Switzerland, Yves Klein, of Monfrini Crettol & Associés, Geneva).
14 May 2012 –President of Ukraine signs new Code of Criminal Procedure Ukraine

The President of Ukraine, Viktor Yanukovych, signed the new Code of Criminal Procedure of Ukraine that had been adopted by the Parliament on April 13, 2012. Newly adopted legislative act will substitute the previous Code of Criminal Procedure of 1960 (as amended up to date) and will enter into force in six months (on November 20, 2012). The new Code is aimed at improvement of the criminal procedural rules and effective protection of the rights of the participants in criminal proceedings, in particular by introducing the adversarial principal already to the pre-trial stage of such proceedings. It means that both the prosecution and the defence shall have equal rights in standing their legal positions and in exercising of their procedural rights. In general, the new Code brings many changes to the recent procedural rules and provides for a number of innovations. Among other things, the new Code introduces: (1) cancellation of such procedural stage as commencement of the criminal matter and remodelling of the pre-trial phase; (2) jury trial; (3) new preventive measure such as a house arrest; (4) new procedural deadlines; (5) conduct of the interrogation and identification through videoconference, etc. The Code also introduces such notion as “criminal offenses” (in addition to “crimes”) and a possibility for simplified procedure of their consideration (where the court may render a decision without participation of the parties). In addition, the Code adopts the possibility to execute a criminal reconciliation (settlement) agreement between a victim and a suspect or an accused and also an agreement on pleading guilty with the prosecution. It shall be also noted that adoption of the new Code resulted in introduction of the respective changes to numerous legislative acts, most of which will come into effect along with the new Code.
30 April 2012 – 41st session of the Working Group V Session of UNCITRAL on Insolvency

The next Working Group Session of UNCITRAL Working Group V on Insolvency will be held at the United Nations facility in New York on April 30, 2012, through May 4, 2012. FraudNet member for the USA Christopher J. Redmond, of Husch Blackwell LLP, Kansas City, will be attending the session as a member of the United States Delegation. Discussion will include definition of Centre of Main Interests (COMI) and Collective Proceedings, as well as Directors' obligations in the period approaching insolvency, and the setting up of an online annotation system, as a supplement to the Guide to Enactment. Click here for UNCITRAL’s page with material for the session. Visit our Resources and Publications pages for material on the same topics: Cross-Border Insolvency, Director & third party liability (from FraudNet member for the USA Christopher J. Redmond, of Husch Blackwell LLP, Kansas City).
18 January 2012 – the Constitutional Court of Ukraine confirmed lawfulness of the criminal procedural rules on review of the criminal case file Ukraine

The Constitutional Court of Ukraine has recently adopted the decision by which it confirmed the lawfulness of the changes made to the Code of Criminal Procedure of Ukraine (Article 218) with regard to review of the criminal case files by the accused person and his/her criminal defense attorney. Among other things, the Constitutional Court emphasized that the accused person and his/her criminal defense attorney can not be limited in time while reviewing the criminal case file; however, if it becomes evident that such review is aimed at deliberate delay of the criminal proceedings, the investigator upon approval of the prosecutor or the prosecutor has the right to request the court to determine the term for review of the criminal case files. This court decision could be further appealed by the prosecutor, the accused or his/her criminal defense attorney within three days from the day when such decision was rendered.

By law, the decision of the Constitutional Court of Ukraine is final and obligatory for execution on the whole territory of Ukraine.
18 January 2012 - the Law on Amendments to Certain Legislation Acts on Humanization of Responsibility for Economic Crimes became effective Ukraine

On December 13, 2011, the President of Ukraine has signed the Law on Amendments to Certain Legislation Acts on Humanization of Responsibility for Economic Crimes, which became effective since January 18, 2012. This Law, among other things, establishes decriminalization of particular economic crimes by changing them to the administrative offences that now are to be envisaged by the Code on Administrative Offences of Ukraine. More specifically, the crimes removed from the Criminal Code of Ukraine include, inter alia, avoidance of the profit return obtained in a foreign currency, illegal opening or using the foreign currency accounts abroad, concealment of financial insolvency, fictitious bankruptcy etc.

The Law also substituted criminal sanctions (i.e. imprisonment) for committing particular economic crimes with fines. This, in particular, relates to the following crimes: illegal activities with documents for money transfer, payment cards and other means required to access the bank accounts; tax evasion; illegal disclosure of information constituting the commercial and bank secrecy; fictitious business activities etc.

The Law also introduces changes to some procedural rules applied in criminal proceedings (i.e. detention, preventive measures, etc).
1 January 2012 - Second Additional Protocol to the European Convention on Mutual Assistance in Criminal Matters Entered into Force Ukraine

Protocol was ratified by Parliament on June 16, 2011 and became effective in Ukraine on January 1, 2012. Along with ratification of the above Protocol, Parliament introduced significant changes to the Code of Criminal Procedure of Ukraine with respect to international cooperation in criminal matters.
3 November 2011 – The StAR Initiative publishes a report on the use of corporate vehicles in corruption cases

The Stolen Asset Recovery Initiative of the World Bank and United Nations Office on Drugs and Crime (StAR Initiative ) has published a report on the use of corporate vehicles in cases of corruption, titled The Puppet Masters: How the Corrupt Use Legal Structures to Hide Stolen Assets and What to Do About It, by: Emile van der Does de Willebois, J.C. Sharman, Robert Harrison, Ji Won Park, Emily Halter. Several FraudNet members participated in the elaboration of the report by sharing their insight with the authors. The 284-page report may be downloaded here or ordered in paper form here. Visit our Resources and Publications pages for material on the same topics: Corruption, Money Laundering, Companies, Trusts (from FraudNet member for Liechtenstein, Siegbert Lampert, of Lampert & Schächle Attorneys At Law Ltd, Vaduz and Switzerland, Yves Klein, of Monfrini Crettol & Associes, Geneva).
1 July 2011 – New Anti-Corruption Legislation Entered into Force Ukraine

Law of Ukraine “On the Principles of Prevention and Counteraction of Corruption” was adopted by Parliament on April 7, 2011.The above law entered into force on July 1, 2011. Articles 11 and 12 of the above law (related to financial control and special verification of personal information of individuals applying for positions in the state or municipal authorities) will enter info force on January 1, 2012. Along with the above law, Parliament adopted a number of amendments to the Code of Criminal Procedure of Ukraine, Criminal Code of Ukraine, Code of Ukraine on Administrative Offenses and to the Law of Ukraine “On State Service” related to responsibility for violation of its provision to ensure its implementation.
22 June 2011 - Financial Services Authority (FSA) report on Banks’ management of high money laundering risk situations United Kingdom

The Financial Services Authority (FSA) released a report on Banks’ management of high money laundering risk situations - How banks deal with high-risk customers (including PEPs), correspondent banking relationships and wire transfers (click the link to download the report). According to Tracey McDermott, Acting Director of Enforcement and Financial Crime at the FSA: “The review found that some banks appeared unwilling to turn away, or exit, very profitable business relationships, including with Politically Exposed Persons (PEPs), where there appeared to be an unacceptable risk of handling the proceeds of crime. Among other findings, three quarters of the banks sampled failed to take adequate measures to establish the legitimacy of the source of their customers’ wealth and the source of the funds to be used in the business relationship” (click here for the FSA press release). According to the Global Witness’ press release, ”Many of the failings identified by the FSA are the same as those it found ten years ago after £1 billion stolen from Nigeria by Sani Abacha came through London banks. This reflects terribly on the FSA’s softly-softly approach over the last decade, and makes it very clear why Egypt is now seeking the return of corrupt Mubarak funds from the UK. Neither dictatorship nor corruption can occur without banks willing to help” Visit our Resources and Publications pages for material on the same topics: United Kingdom, Compliance, Corruption, Money Laundering, Abacha Case, Mubarak Case. (from FraudNet member for Switzerland Yves Klein, of Monfrini Crettol & Associes, Geneva).
1 June 2011 – Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism Entered into Force Ukraine

Convention was ratified by Parliament on November 17, 2010 and became effective in Ukraine on June 1, 2011. The above Convention will replace Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime in relations between the parties to it. Under Ukrainian law the Convention becomes a part of Ukrainian legislation.
10 May 2011 – Access to Public Information Law and the Revised Information Law entered into force Ukraine

Law of Ukraine “On Access to Public Information” and revised Law of Ukraine “On Information” were adopted on January 13, 2011 and entered into force on May 10, 2011. The Public Information law, inter alia, sets forth definition of public information and provide for the right to request and receive such information from public authorities and other administrators, save for classified one (confidential, secret, for internal use) in prescribed by law instances.
5 May 2011 - Transparency International publishes its Progress Report on the Enforcement of the OECD Anti-Bribery Convention Brazil

According to Transparency International (TI), Brazil is considered to be one of the countries that had the worst performance in regard of the ones that signed the OECD Anti-Bribery Convention. Just last year, Brazil had four surveys on this matter. Click here for the article (in Portuguese) and here for TI’s page on its Progress Report on the Enforcement of the OECD Anti-Bribery Convention (click the link to download TI’s 2011 report). Visit our Resources and Publications pages for material on the same topics: Brazil, Corruption (from FraudNet member for Brazil Antenor Madruga, of Barbosa Mussnich & Aragao Advogados).
31 March 2011 - Bribery Act 2010 Official Guidance Published United Kingdom

The Bribery Act 2010 is due to come into force throughout the United Kingdom on 1 July 2011. It consolidates the existing law and creates new offences. In particular, it is now an offence for a commercial organisation to fail to prevent bribery. Organisations which carry on business in the UK must ensure that they have adequate procedures in place. These procedures should be designed to prevent any associated person from undertaking conduct illegal under the Act and should be proportionate to the risks faced by the organisation in question. The Ministry of Justice has published updated guidance to assist commercial organisations: click here to view the guidance. Visit our Resources and Publications pages for material on the same topics: United Kingdom, Corruption. (from FraudNet member for Scotland Douglas Milne, of Morton Fraser, Edinburgh)
9 March 2011 – Revised Enforcement Proceeding Law Entered into Force Ukraine

New version of the Law “On Enforcement Proceeding” aimed to improve the entire process of enforcement was adopted by Parliament on November 4, 2010 and entered into force on March 9, 2011. The changes introduced relate, inter alia, to authority of the enforcement officers, opening of the enforcement proceeding, lodging a complaint against actions or failures to act of enforcement officers and increase of the enforcement fee.
2 February 2011 - Initiation of RIAA forfeiture proceedings against the Duvalier assets Switzerland

The Federal Council has asked the Federal Department of Finance (FDF) to initiate proceedings for the forfeiture of the Duvalier funds frozen in Switzerland, based on the Federal Act on the Restitution of Assets of Politically Exposed Persons obtained by Unlawful Means (RIAA), which entered into force on 1 February 2011. The Federal Administrative Court (FAC) will be in charge of these proceedings. Visit our Resources and Publications pages for material on the same topics: Switzerland, Corruption, Forfeiture, Duvalier Case. Click here for the press release (from FraudNet member for Switzerland Yves Klein, of Monfrini Crettol & Associes, Geneva).
1 February 2011 - Federal Act on the Restitution of Assets of Politically Exposed Persons obtained by Unlawful Means (RIAA) enters into force switzerland

The Federal Act on the Restitution of Assets of Politically Exposed Persons obtained by Unlawful Means (RIAA) has entered into force. The purpose of the RIAA is to facilitate the returning of assets frozen in Switzerland to so-called “failing states” following the failure of the process of international mutual assistance to produce a satisfactory result. Click here for the page of the Swiss Federal Department of Foreign affairs dedicated to potentate funds and containing links to the relevant laws and material (in English). Visit our Resources and Publications pages for material on the same topics: Switzerland, Corruption, Forfeiture. (from FraudNet member for Switzerland Yves Klein, of Monfrini Crettol & Associes, Geneva)
31 January 2011 – The Council of the European Union freezes assets of former Tunisian President Ben Ali – European Union

The Council of the European Union decided to freeze with immediate effect for a duration of twelve months any assets that might in Switzerland belonging to, or controlled by, former Tunisian President Zine El Abidine Ben Ali and his associates. The 31 January 2011 decision 2011/72/PESC, targeting only Ben Ali and his wife was amended on 4 February 2011 by the implementing decision 2011/79/PESC (OJ L 31, 5.2.2011, p. 40) and the Council Regulation (EU) No 101/2011 (OJ L 31, 5.2.2011, p. 1), to which a list of 48 targeted persons is attached. The regulation is based on article 215 of the Treaty on the Functioning of the European Union. Visit our Resources and Publications pages for material on the same topics: European Union, Tunisia, Corruption, Forfeiture, Ben Ali Case (from FraudNet member for Switzerland Yves Klein, of Monfrini Crettol & Associes, Geneva).
31 January 2011– The Council of the European Union freezes assets of former Tunisian President Ben Ali European Union

The Council of the European Union decided to freeze with immediate effect for a duration of twelve months any assets that might in Switzerland belonging to, or controlled by, former Tunisian President Zine El Abidine Ben Ali and his associates. The 31 January 2011 decision 2011/72/PESC, targeting only Ben Ali and his wife was amended on 4 February 2011 by the implementing decision 2011/79/PESC (OJ L 31, 5.2.2011, p. 40) and the Council Regulation (EU) No 101/2011 (OJ L 31, 5.2.2011, p. 1), to which a list of 48 targeted persons is attached. The regulation is based on article 215 of the Treaty on the Functioning of the European Union. Visit our ResourcesandPublications pages for material on the same topics: European Union, Tunisia, Corruption, Forfeiture, Ben Ali Case (from FraudNet member for Switzerland Yves Klein, of Monfrini Crettol & Associes, Geneva).
19 January 2011 – The Federal Council freezes assets of former Tunisian President Ben Ali - Switzerland

The Federal Council decided to freeze with immediate effect for a duration of three years any assets that might in Switzerland belonging to, or controlled by, former Tunisian President Zine el-Abidine Ben Ali and his associates (click here for the press release). Click here for the text of the 19 January 2011 order (in French), together with the list of more than 40 persons and entities targeted by the freeze order, which was amended on 4 February 2011 (here – in French). The order is based on Article 184.3 of the Swiss Constitution, on international relations, according to which “Where safeguarding the interests of the country so requires, the Federal Council may issue ordinances and rulings. Ordinances must be of limited duration”. Click here for the webpage of the Federal Department of Foreign Affairs on the Freezing of Assets in Switzerland at the behest of the Federal Council. Visit our Resources and Publications pages for material on the same topics: Switzerland, Tunisia, Corruption, Forfeiture, Ben Ali Case. (from FraudNet member for Switzerland Yves Klein, of Monfrini Crettol & Associes, Geneva).
17 January 2011 - Recovery proceedings against the assets of Paulo Maluf Jersey

Fraudnet members for Jersey Stephen Baker, of Baker and Partners, St Helier, and the United Kingdom Andrew Witts, Lawrence Graham, London, act on behalf of the Federal Republic of Brazil and Municipality of Sao Paulo in efforts to recover assets allegedly the proceeds of corruption of former Mayor of Sao Paulo Paulo Maluf held through Jersey. Disclosure orders were obtained against Jersey Financial Institutions. Proceedings have been instituted and the trial is due to be heard in January 2012. Visit our Resources and Publications pages for material on the same topics: Jersey, Brazil, Corruption, Maluf Case (from FraudNet member for Jersey Stephen Baker, of Baker and Partners, St Helier)
1 January 2011 - New Code of Penal Procedure Switzerland

A new Code of Penal Procedure has entered into force, unifying the until then 26 different cantonal and federal codes of penal procedure. The law enhances the rights of the victim to participate in the investigation and introduces a formal plea bargaining procedure requesting an agreement with the victim on compensation. Click here for the text of the law. Visit our Resources and Publications pages for material on the same topics: Switzerland, Forfeiture, Criminal proceedings. (from FraudNet member for Switzerland Yves Klein, of Monfrini Crettol & Associes, Geneva)