Week 7 Flashcards
Which four aspects belong to the business environment?
- Economical aspects
- Cultural aspects
- political aspects
- legal aspects
The legal aspect is important but it comes from the political. Overall the legal aspect is close to all other apsects.
Which are the two areas of compliance?
- National and International Laws
- formal voluntar rules (codes like code of conduct) and informal voluntary rules
Six sort of rules: Law
In given jurisdiction, these rules apply to everybody. Like laws on human rights, personal and marital affairs, property & estate matters ect.
Exp. OR
Six sort of rules: Regulations
Are laws that only effect specific situations & industries.
Exp. regulations on environmental protection, construction and instustry regulations on banking and finance or pharmaceuticals.
The more money people make, the more regulations they have
Six sort of rules: Contracts
rules on which company agrees with another party with view to making & implementing a transaction. Agreement between min. 2 parties.
Exp. mandates, employment contracts, procurement contracts ect
Six sort of rules: Self-regulations (formal, voluntary rules, Codes)
contractual rules comprise rules of self-regulation which certain industires, like banks, lay down between players. Self-regulation plays major role in areas where industry is under statutory law.
Companies are regulating their self more and more. It is easier to self-regulate before some tells you how to act.
-> ISO14001
Six sort of rules: Governance rules (informal, voluntary rules)
Those rules which every company puts in place to organize and govern its own affairs.
Exp. policies, guidelines, norms, ect. (z.B. Kleidervorschriften)
-> Code of conduct
Six sort of rules: soft laws and ancillary rules (informal, voluntary rules)
Not set in stone by lawmaker, regulator, internal authorities or agreed with counterpart. Rather, these rules emante from moral and ethical condiserations, instury standards, best practices, norms and standards beyond regulatory requirements, reputational considerations and demands by NGOs.
-> good behaviour
Unvalid infront of court of law.
Stakeholder
is any person that has influence on the company (customer, employee, ect.)
Doing business nationally (national production, supply, workforce, customers, ect.)
One legal framework applies
Doing business internationally (purchase, supply, production, customers, workforce, management, ect. involve different nations and nationalities)
Foreign law may be applicable.
Exp. environmental law, real estate law, consumer protection, investor protections, labor law, taxes.
These laws are not uniform.
International business - legal structures
- Import / Export
- Licensing / Franchising
- Cooperation / Joint-ventures
- Foreign branch / subsidary
Corruption
Any dishonest or fraudulent behavior wherein someone uses their position of power to benefit themselves at the expense of others.
It includes many dishonest practices, such as:
➢ Embezzlement (Veruntreuung): theft or funds placed in one’s trust or belonging to one’s employer.
➢ Fraud (Betrug): wrongful or criminal deception intended to result in financial or personal gain.
➢ Nepotism (Vetternwirtschaft): favoring relatives or friends, especially by giving them jobs.
➢ Abuse of power.
➢ Collusion (Kollusion): secret agreement or cooperation for an illegal or deceitful purpose.
* Discussions about products, product development, pricing, technologies are forbidden
* Sharing information between suppliers who are competitors is unethical and, in many countries, violates the law. However, you can tell the first supplier that we have found better prices elsewhere without revealing the price or identity of the second supplier
Bribery
Form of corruption
offering, promising, giving or soliciting of advantage as inducement for an action which is illegal, unethical or a breach of trust.
Active bribery: offering, promising or giving a bribe.
Passive bribery: requesting, agreeing to receive, or accepting a bribe.
-> only one form of corruption
Most relevant anti-corruption legisaltion
➢ Swiss Criminal Code (SCC)
➢ US Foreign Corrupt Practices Act (FCPA; 1977)
➢ UK Bribery Act (2010)
➢ United Nations Convention against Corruption (UNCAC; 2005)
➢ OECD Convention on Combating Bribery of Foreign Public Officials (1999)
The US law is important for example because Americans need to pay taxes in the US even they live in CH.
Acitve bribery of swiss public officals
Art. 322ter Swiss Criminal Code (SCC)
Any person who offers, promises or gives a member of a judicial or other authority, a public official, an officially-appointed expert, translator or interpreter, an arbitrator, or a member of the armed forces an undue advantage, or offers, promises or gives such an advantage to a third party in order to cause the public official to carry out or to fail to carry out an act in connection with his official activity which is contrary to his duty or dependent on his discretion, shall be liable to a custodial sentence not exceeding five years or to a monetary
penalty.
Undue advantage (according to SCC)
➢ Material or immaterial:
- Cash
- Stocks
- Works of art
- Study fees, tuitions
- Invitations
- Watches
- Medical treatments
- Donations
➢ In person or via third parties:
- Agent
- Advisers
- Fake firm
- Retailer
The advantage is undue if the offender is not authorized to accept it.
The Swiss Criminal Code does not establish general quantitative or qualitative
limitations on hospitality expenses such as gifts, travel, meals, entertainment.
Passive bribery by swiss public officals (acceptance of bribes)
Art. 322quater SCC
Any person who as a member of a judicial or other authority, as a public official, officially-appointed expert, translator or interpreter, or as an arbitrator demands, secures the promise of or accepts an undue advantage for that person or for a third party in order that he carries out or fails to carry out an act in connection with his official activity which is contrary to his duty or dependent on his discretion, shall be liable to a custodial sentence not exceeding five years or to a monetary penalty
Bribery of swiss public officals (granting or acceptance of advantage)
Art. 322quinquies SCC
Any person who offers, promises or gives a member of a judicial or other authority, a public official, an officially-appointed expert, translator or interpreter, an arbitrator or member of the armed forces an undue advantage for that person or for a third party in order that the person carries out his official duties shall be liable to a custodial sentence not exceeding three years or to a monetary penalty.
Art. 322sexies SCC
Any person who as a member of a judicial or other authority, as a public official, officially-appointed expert, translator or interpreter, or as an arbitrator, demands, secures the promise of, or accepts an undue advantage for himself or for a third party in order that he carries out his official duties shall be liable to a custodial sentence not exceeding three years or to a monetary penalty.
–> here only something gets accelerated with money but nothing illegal is done. Exp. I pay money to a offical that I get my passport faster
(acitve and passive) bribery of foreign public officals
Art. 322septies SCC
Any person who offers, promises or gives a member of a judicial or other authority, a public official, an officially-appointed expert, translator or interpreter, an arbitrator, or a member of the armed forces who is acting for a foreign state or international organization an undue advantage, or gives such an advantage to a third party, in order that the person carries out or fails to carry out an act in connection with his official activities which is contrary to his duties or dependent on his discretion shall be liable to a custodial sentence not exceeding five years or to a monetary penalty.
any person who as a member of a judicial or other authority, a public official, an officially-appointed expert, translator or interpreter, an arbitrator, or a member of the armed forces of a foreign state or of an international organization demands, secures the promise of, or accepts an undue advantage for himself or for a third party in order that he carries out or fails to carry out an act in connection with his official activity which is contrary to his duty or dependent on his discretion shall be liable to a custodial sentence not exceeding five years or to a monetary penalty.
Active bribery of private individuals
Art. 322octies SCC
1 Any person who offers, promises or gives an employee, partner, agent or any other auxiliary of a third party in the private sector an undue advantage for that person or a third party in order that the person carries out or fails to carry out an act in connection with his official activities which is contrary to his duties or dependent on his discretion shall be liable to a custodial sentence not exceeding three years or to a monetary penalty.
2 In minor cases, the offence is only prosecuted on complaint.
–> just because everybody is doing something illegal it dosn’t become legal
Passive bribery of private individuals (accepting bribes)
Art. 322novies SCC
1 Any person who as an employee, partner, agent or any other auxiliary of a third party in the private sector demands, secures the promise of, or accepts an undue advantage for himself or for a third party in order that the person carries out or fails to carry out an act in connection with his official activities which is contrary to his duties or dependent on his discretion shall be liable to a custodial sentence not exceeding three years or to a monetary penalty.
2 In minor cases, the offence is only prosecuted on complaint.
! corporate criminal liabilit - liability under the criminal law
–> important for the exam
Art. 102 SCC
1) If a felony or misdemeanor is committed in an undertaking in the exercise of commercial activities in accordance with the objects of the undertaking and if it is not possible to attribute this act to any specific natural person due to the inadequate organization of the undertaking, then the felony or misdemeanor is attributed to the undertaking. In such cases, the undertaking is liable to a fine not exceeding CHF 5M.
2) If the offence committed falls under articles 260ter, 260quinquies, 305bis, 322ter, 322quinquies, 322septies paragraph 1 or 322octies, the undertaking is penalized irrespective of the criminal liability of any natural persons, provided the undertaking has failed to take all the reasonable
organizational measures that are required in order to prevent such an offence.
3) The court assesses the fine in particular in accordance with the seriousness of the offence, the seriousness of the organizational inadequacies and of the loss or damage caused, and based on the economic ability of the undertaking to pay the fine.
4) Undertakings within the meaning of this title are:
a) any legal entity under private law;
b) any legal entity under public law with exception of local authorities;
c) companies;
d) sole proprietorships.
–> If an employee is found guilty then also the company will be considered if they have done anything to prevent the offence.
US Foreign corrupt practices act (FCPA; 1977)
The FCPA:
- prohibits the bribing of foreign public officials
- requires publicly traded companies to maintain accurate books and records¨
Scope:
➢ Exterritorial (i.e., anywhere in the world)
➢ Applicable to US persons and companies, as well as to foreign individuals or
companies using US instrumentalities (e.g., phone call, e-mail, text, fax, wire
transfer from, to or through the USA), or while physically present in the USA.
Penalties (regarding bribes):
- For individuals
➢ Monetary penalty up to USD 100K and imprisonment up to 5 years
- For companies
➢ Monetary penalty up to USD 2M
–> If you are guilty in Switzerland and for example this was payed in USD you can also be accused (angeklagt) in the US.
