About the Authors

321

The Anti‑Bribery and Anti‑Corruption

Review

Law Business Research

Third Edition

Editor

Mark F Mendelsohn

The Anti-Bribery andAnti-Corruption Review

The Anti-Bribery and Anti-Corruption ReviewReproduced with permission from Law Business Research Ltd.

This article was first published in The Anti-Bribery and Anti-Corruption Review - Edition 3

(published in November 2014 – editor Mark F Mendelsohn).

For further information please emailNick.Barette@lbresearch.com

The Anti-Bribery and

Anti-Corruption

Review

Third Edition

EditorMark F Mendelsohn

Law Business Research Ltd

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The publisher acknowledges and thanks the following law firms for their learned assistance throughout the preparation of this book:

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ACKNOWLEDGEMENTS

Acknowledgements

ii

PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP

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STUDIO LEGALE PISANO

YOON & YANG LLC

iii

Editor’s Preface ..................................................................................................viiMark F Mendelsohn

Chapter 1 AUSTRALIA ...............................................................................1Robert R Wyld and Jasmine Forde

Chapter 2 BRAZIL ....................................................................................24Adriana Dantas and Luiz Eduardo Alcantara

Chapter 3 CANADA .................................................................................38Mark Morrison and Michael Dixon

Chapter 4 CHINA .....................................................................................50Susan Munro

Chapter 5 ENGLAND & WALES ............................................................63Shaul Brazil and John Binns

Chapter 6 FINLAND ................................................................................75Kai Kotiranta

Chapter 7 FRANCE ..................................................................................87Kiril Bougartchev, Emmanuel Moyne and Sébastien Muratyan

Chapter 8 GERMANY ............................................................................102Thomas Richter

Chapter 9 GREECE ................................................................................112Ilias G Anagnostopoulos and Jerina (Gerasimoula) Zapanti

CONTENTS

iv

Contents

Chapter 10 INDIA ....................................................................................122Shiraz Rajiv Patodia and Priyanka Sharma Goswami

Chapter 11 ITALY .....................................................................................136Roberto Pisano

Chapter 12 JAPAN ....................................................................................149Masato Suzuki, Takashi Domon and Takaki Sato

Chapter 13 KOREA ...................................................................................164In Jong Chang and Kyoung Ho Hong

Chapter 14 MEXICO ................................................................................178Oliver J Armas, Luis Enrique Graham and Thomas N Pieper

Chapter 15 NETHERLANDS ..................................................................190Aldo Verbruggen and Tessa van Roomen

Chapter 16 NORWAY ...............................................................................204Tarjei Thorkildsen, Jon Christian Thaulow and Atle J Skaldebø-Rød

Chapter 17 RUSSIA ...................................................................................217Vladimir Melnikov and Sergei Eremin

Chapter 18 SOUTH AFRICA ...................................................................227Darryl Bernstein and Nikita Shaw

Chapter 19 SPAIN .....................................................................................243Jesús Santos Alonso, María Massó Moreu and Ana Torres Pérez-Solero

Chapter 20 SWEDEN ...............................................................................259Peder Hammarskiöld, Joakim Sundbom and Sandra Hein Kaznova

Chapter 21 SWITZERLAND ...................................................................271Roman Richers and Martin Karl Weber

v

Contents

Chapter 22 TURKEY ................................................................................281Orçun Çetinkaya, Filiz Toprak Esin and Bensu Aydın

Chapter 23 UNITED STATES .................................................................292Mark F Mendelsohn

Appendix 1 ABOUT THE AUTHORS .....................................................317

Appendix 2 CONTRIBUTING LAW FIRMS’ CONTACT DETAILS ...333

vii

EDITOR’S PREFACE

This third edition of The Anti-Bribery and Anti-Corruption Review presents the views and observations of leading anti-corruption practitioners in jurisdictions spanning every region of the globe. The worldwide scope of this volume reflects the reality that anti-corruption enforcement has become an increasingly global endeavour, resulting in a challenging environment for anti-corruption practitioners and the clients they advise.

Over the past year, a growing number of countries enacted or amended significant anti-corruption and anti-bribery legislation and, perhaps more importantly, increased their enforcement of those laws. This volume touches upon a wide range of such legislative developments. A few highlights include: Latvia’s May 2014 accession to the Organisation for Economic Co-operation and Development Anti-Bribery Convention, the German Federal Cabinet’s May 2014 resolution to adopt the Act on the Ratification of the UN Convention against Corruption, and the European Parliament’s April 2014 adoption of the Directive on Disclosure of Non-Financial and Diversity Information by Certain Large Companies and Groups, which will require covered companies to disclose information on their policies, risks and results regarding anti-corruption and bribery issues.

In the United States, enforcement authorities continue to vigorously enforce the Foreign Corrupt Practices Act (FCPA), with the past year’s cases showing both an increase in the number of charges against individuals and a continued focus on corporate conduct. The investigation and enforcement focus cuts across a  range of industries including: pharmaceutical and medical device companies, the financial, mining and aviation industries, and the energy sector. In January 2014, the Department of Justice (DOJ) and the Securities and Exchange Commission announced settlements with Alcoa Inc and its subsidiary Alcoa World Alumina LLC. These settlements, involving $384 million in criminal fines, administrative forfeitures and disgorgement, constitute the fifth largest FCPA settlement in US history. In September 2014, Marshall L Miller, Principal Deputy Assistant Attorney General for the DOJ Criminal Division, announced his office’s intention to ‘vigorously employ proactive investigative tools that may not have been used frequently enough in white-collar cases in past years: tools like wiretaps, body wires, physical surveillance and border searches’. These investigative tools appear to have

Editor’s Preface

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been employed during the recent investigations of French citizen Frederic Cilins and a  group of executives at BizJet International, a US-based subsidiary of the Lufthansa Corporation. Companies and their counsel continue to struggle with the issue of whether or not to self-report potential violations of the FCPA in light of the enforcement climate and concerns regarding the risk/reward calculus. And, as in previous years, we have continued to see the uncovering of bribery in mergers and acquisition diligence as well as an increase in various forms of private litigation related to FCPA investigations.

The foreign bribery landscape grows increasingly complicated for multinational companies, as China, the United Kingdom, Norway and Canada, among other countries, have each launched significant investigations and brought a  substantial number of corruption actions in the past year related to international business transactions. The growing number of enforcement actions around the world are supported by a significant trend toward greater international cooperation in anti-corruption enforcement efforts. In a 17 June 2013 keynote address, then DOJ Acting Assistant Attorney General Mythili Raman commented: ‘Through our increased work on prosecutions with our foreign counterparts and our participation in various multilateral fora like the OECD and United Nations, it is safe to say that we are cooperating with foreign law enforcement on foreign bribery cases more closely today than at any time in history.’

I wish to thank all of the contributors for their support in producing this volume. I appreciate that they have taken time from their practices to prepare chapters that will assist practitioners in navigating the complexities of foreign and transnational business.

Mark F MendelsohnPaul, Weiss, Rifkind, Wharton & Garrison LLPWashington, DCNovember 2014

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Chapter 20

SWEDEN

Peder Hammarskiöld, Joakim Sundbom and Sandra Hein Kaznova1

I INTRODUCTION

Sweden has a  long-standing tradition of criminalising corruption in Sweden.2 Today, Sweden is perceived as one of the least corrupt countries in the world, ranking for example third among the 175 countries included in the Corruption Perceptions Index issued by Transparency International in 2013.3 Nonetheless, cases of corruption are recurrently being discovered in Sweden and anti-corruption issues have attracted growing interest over the past years.

The anti-bribery provisions in Swedish law are set out in the Swedish Penal Code (the Penal Code) and apply equally to domestic and foreign bribery. The legislation was last revised and amended in 2012. As a consequence, the penal provisions on bribery are now assembled under one chapter, Chapter 10, ‘On Embezzlement, Other Acts of Breach of Trust and Bribery’. Pursuant to general principles of Swedish criminal law, only natural persons can commit crimes, but companies can be penalised with corporate fines (see Section II, infra).

As part of the recent review of the anti-corruption legislation, the legislation was supplemented by a ‘Code on gifts, rewards and other benefits in trade and industry’ (the Business Code). The Business Code was prepared in collaboration with representatives

1 Peder Hammarskiöld is senior partner, and Joakim Sundbom and Sandra Hein Kaznova are partners at Advokatfirman Hammarskiöld & Co.

2 As early as the Middle Ages some of Sweden’s provincial laws contained anti-corruption provisions, which applied to judges, county sheriffs and bailiffs. Leijonhufvud, Madeleine, ‘Corruption – A Swedish Problem?’, Scandinavian Studies in Law Vol. 38, 1999, Stockholm Institute for Scandinavian Law 1957–2009.

3 See also ‘Report from the European Commission to the Council and the European Parliament: EU Anti-Corruption Report’, COM(2014) 38 final, February 2014, Brussels.

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from the business sector and was then adopted by the Swedish Anti-Corruption Institute (the Anti-Corruption Institute).4 While the Business Code does not have status as law, it serves as a complement intended to clarify the legislation on bribery, which is written in very general terms and often difficult to interpret. However, the Business Code is generally stricter than the Swedish Penal Code. The intention is that anyone following the Code should be able to count on his or her actions being legal.

The Ethics Committee of the Anti-Corruption Institute may for a fee render an assessment of whether or not a contemplated action is compatible with the Business Code. The assessments are published on the institute’s website, www.institutetmotmutor.se.

II DOMESTIC BRIBERY: LEGAL FRAMEWORK

i The offences of bribe-taking and bribe-giving

Bribery and some ancillary offences are addressed in Chapter 10 of the Penal Code. Section  5(a) penalises bribe-taking, described as receiving, accepting a  promise of or demanding an undue benefit for the performance of the recipient’s duties. Under Section 5(b), the mirror image of the offence of bribe-taking, the act of giving, promising or offering an undue benefit, defined as bribe-giving, is punishable. The provisions prohibiting bribery rest on three conditions, outlined below.

ii The receiver

Any ‘employee or person performing an assignment’ can be the recipient, or intended recipient, of a bribe pursuant to the Penal Code, irrespective of whether the engagement is in the public or private sector. As regards the criterion of ‘assignment’, it may be based on a contract, election, appointment or a duty. Thus, self-employed entrepreneurs are also covered by the anti-bribery provisions.

iii The connection between the benefit and the receiver’s position

There must also be a connection between the recipient’s professional position and the presumptively improper reward. The prosecutor does not need to prove a  fraudulent intent or that the reward has actually influenced the recipient’s actions. It is sufficient that, based on an objective assessment, there was a  risk that the reward could have affected the recipient.

iv ‘Improper’ benefit

Further, the nature of the benefit must be examined, as only ‘improper’ benefits are prohibited. It is not always easy to draw the line since the concept of ‘improper’ benefit is not defined in the Penal Code and there are no fixed monetary limits. An overall assessment of all relevant circumstances must be made in each case. The Business Code seeks to provide some guidance. It distinguishes between on the one hand benefits that typically influence decisions or the manner of completing work tasks, which are

4 Institutet mot mutor, IMM.

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improper, and on the other hand benefits that are typically beneficial to a relation, but do not influence decisions nor actions, which are permissible.

Pursuant to the Business Code, the assessment of whether or not a  benefit is improper should take the following factors into account:a the value of the benefit;b the recipient’s professional position;c the connection between the benefit and the recipient’s professional duties; andd the group of recipients and the forms for offering the benefit.

The risk of a benefit being considered improper of course increases with the value of the benefit and the frequency with which it is given to a certain recipient. Also benefits that do not have any financial value can, depending on the circumstances, be considered improper. This could, for example, be the case with benefits like attractive memberships, honours and awards.

The value of the benefit must further be put in relation to the receiver’s integrity and susceptibility to influence, based on factors such as position, work tasks, age and economy. Even an insignificant gift can be in the risk zone of being deemed improper if the recipient holds a particularly sensitive position; for example, if he or she is exercising public authority or carrying out public procurement.

Examining the connection between the benefit and the recipient’s professional duties means analysing to what extent the benefit can be said to fulfil a useful professional purpose for the recipient. A lunch may, for example, serve for discussion of work-related matters and a field trip may provide valuable insights that cannot be had at the office.

A benefit, like an invitation to an event, is more likely to be acceptable if the invitation is approved by or directed to the employer or directed to an undefined group of persons, rather than to selected individuals.

There is no exemption permitting facilitation payments.

v Negligent financing of bribe-giving

Following a  legislative reform in 2012, negligent financing of bribe-giving is now an offence pursuant to Chapter 10 Section 5(e) of the Penal Code. Typically this offence targets corruption via an agent, consultant or other intermediary. A company that provides funds to a  third party acting on behalf of the company must hence take appropriate measures to ensure that the third party does not infringe the anti-bribery provisions.

vi Trading in influence

As of 2012, Chapter 10 Section 5(d) of the Penal Code prohibits the act of ‘trading in influence’. This offence covers situations in which an undue benefit, or the promise of a benefit, is given to, offered, received or demanded by someone who is, for example, a  relative or friend of a person exercising public authority or public procurement, to exercise influence on such decisions or acts.

vii Breach of trust

Breach of trust is penalised in accordance with Chapter 10, Section 5 of the Penal Code. The crime occurs when a person who by reason of a position of trust has been given the

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task of managing his or her principal’s financial affairs, accepts a promise of or receives a reward, which is to benefit another person’s interest, and in this way abuses his or her position of trust and thereby causes the principal damage.

viii Penalties

Penalties for violation of the offences of bribe-taking and bribe-giving include fines or imprisonment for up to two years, while a gross offence is punishable by imprisonment for at least six months and up to six years. Trading in influence and negligent financing of bribe-giving are punishable by a fine or imprisonment for up to two years.

An employee found guilty of bribery will most likely be subject to additional sanctions consistent with Swedish labour law (e.g., salary reduction or dismissal).

ix Corporate fines and debarment

As noted above, only natural persons can commit crimes pursuant to Swedish criminal law. However, if a crime has been committed in the conduct of a company’s business activities, corporate fines may under certain conditions be imposed on the company. Although corporate fines do not in the formal legalistic sense constitute a  criminal sentence, the effect is the same.

Corporate fines can be imposed as a consequence of a crime being committed in the course of business activities if either of the following situations are at hand; (1) the company has not done what could reasonably have been expected to prevent the crime or (2) the crime has been committed either by a person who has a leading position in the company in terms of powers to represent the company or make decisions on its behalf or who has a particular duty with respect to the control or monitoring of the business (Chapter 36 Section 7 of the Swedish Penal Code). Corporate fines may, however, not be adjudicated where the crime is directed at the company itself.

Corporate fines may amount to no less than 5,000 kronor and no more than 10 million kronor.5 The fines may be reduced if, for example, the company has reported the crime voluntarily or taken action to prevent the crime or reduce the harmful effects of it. Sweden has no system of plea bargaining, settlement agreements or similar alternatives to ordinary criminal proceedings. However, where the corporate fines claimed by the prosecutor are small, a  trial in court can be avoided through an order for summary penalty if the company accepts liability.

Further, Chapter 36 of the Penal Code contains general provisions regulating forfeiture of property used as an auxiliary means in the commission of crime. The proceeds of a crime, such as illicit payments, may be declared forfeited unless this would be manifestly unreasonable.

A violation of anti-corruption provisions may also lead to debarment from public procurement in line with Chapter 10 of the Public Procurement Act.

5 Corresponding to approximately €1,083,000 or $1,400,000, based on exchange rates in September 2014. The amounts have been criticised by, for example, the OECD Working Group on Bribery for being too low to deter companies from corrupt practices.

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x Trading prohibitions

Furthermore, in accordance with the Trading Prohibition Act, a trading prohibition may under certain conditions be issued against board members and managing directors of a company that has been involved in criminal activities. The effect of a trading prohibition is that the director is barred, for a period of three to 10 years, from operating any business, holding a directorship in an undertaking, or being employed by the business operation where the person has previously failed to fulfil his or her obligations.

As far as civil sanctions are concerned, a  contract established through corrupt activities may under certain circumstances be declared invalid pursuant to the principles and provisions in the Swedish contract law, inter alia Sections 33 and 36 of the Contract Act.

xi Political contributions

On 1 April 2014, a new act on transparency in the financing of political parties6 entered into force. The act obliges all political parties that participate in elections to the Swedish or the European parliament to disclose their funding, in a yearly report to the Swedish public authority, the Legal, Financial and Administrative Services Agency.7 Also the contributions received in campaigns for individual members of the parliament should be disclosed by the member’s party. The report should, among other things, include all contributions received from individuals, corporations, organisations, trusts, etc., whether national or foreign. Where the value of a contribution exceeds more than one half of the national ‘price base amount’,8 the identity of the donor should be disclosed, as well as information about the amount and form of the contribution. Also anonymous contributions, and the total number of anonymous contributions, must be reported. The parties’ yearly reports will be published on the website of the Legal, Financial and Administrative Services Agency, with the exception of the names of donors who are natural persons.

III ENFORCEMENT: DOMESTIC BRIBERY

i The enforcing bodies

Following the recommendations issued by GRECO,9 a new unit within the Swedish Prosecution Authority, the National Anti-Corruption Unit (NACU), was established in 2003. Eight specialised prosecutors and three economic auditors handle criminal cases of bribe-taking and bribe-giving as well as other ancillary offences by conducting

6 Lag (2014:105) om insyn i finansiering av partier (Law (2014:105) on the Transparency of Funding of Parties).

7 Kammarkollegiet.8 The amount is established yearly, in accordance with the Swedish Social Insurance Code. In

2014 the full amount is 44,600 kronor.9 The Group of States against Corruption, the Council of Europe’s anti-corruption

monitoring body.

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investigations and bringing to court actions against domestic and foreign corruption within the public and private sectors. In addition, since 2012 a special investigations unit within the Swedish Police, the National Corruption Group, has assisted the prosecutors at the NACU in investigations of suspected cases of bribery.

ii The prevalence of corruption in Sweden

The Swedish National Council for Crime Prevention has examined reported and detected corruption in Sweden based on 648 closed cases that the NACU received between 2003 and 2011.10 Pursuant to the council’s report, corruption, although present throughout the country, is primarily found in the large cities and the suburban municipalities of large cities. The three industries that emerge in the report as most exposed to corruption are construction and civil engineering, manufacturing and wholesale, and retail. Moreover, the report demonstrates that the majority of the cases occurred in the public sector.

Agencies within the central government sector, which the report considered to be particularly vulnerable to corruption, were the Swedish Armed Forces, the Prison and Probation Service, the Road Administration, the Air Navigation Services and the higher education institutions, as well as state-owned companies.

iii Recent corruption cases

The Stockholm District Court has recently issued a  judgment in a  high-profile case, described as the biggest corruption scandal in Sweden.11 A  former property manager at the Swedish Prison and Probation Service accepted bribes, paid through a property consultant, in the amount of 11.4 million kronor for awarding a certain construction company several contracts to build new prisons, instead of carrying out a  public procurement. The manager was convicted of two charges of gross bribe-taking and one charge of bribe-taking of normal degree and sentenced to three years and two months in prison. The property consultant was indicted on two charges of complicity to gross bribe-taking as well as on two charges of bookkeeping crime, one gross and one of normal degree. He was sentenced to three years in prison and received a  seven-year trading prohibition.

Several public corruption cases in municipalities have come to light during the past few years. The majority of the cases have involved the construction and civil engineering industry, management of facilities and infrastructure, technical administration and social services.

A large corruption scandal was revealed in Gothenburg in April 2010. It concerned among other offences bribery, fraud, unlawful disposal, breach of trust and misuse of office committed by local government officials in collaboration with privately owned construction companies offering excessive benefits to the municipal officials. One of the conclusions drawn from the Gothenburg case is that public contracts with private entrepreneurs must be more transparent and that there must be an independent municipal audit.

10 National Council for Crime Prevention, Reported Corruption in Sweden, 2013:12, Stockholm.11 Stockholm District Court, judgment 2 September 2014 in criminal case No. B 17241-12.

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IV FOREIGN BRIBERY: LEGAL FRAMEWORK

Once Swedish jurisdiction is established, foreign bribery is punishable under the Penal Code in the same manner as domestic bribery. As with domestic corruption, the enforcing agency is the NACU (see Section III.i, supra) at the Swedish Prosecution Authority.

Pursuant to Chapter 2 of the Penal Code, Swedish courts have jurisdiction over crimes committed abroad if the act was committed by Swedish citizens, foreign citizens domiciled in Sweden or, in the case of certain particularly serious crimes such as war crimes, if the crime was committed by foreign citizens visiting Sweden.

However, a  fundamental prerequisite for prosecution is the principle of dual criminality. In addition to being penalised under Swedish law, an offence must be criminalised under the law of the country in which it has allegedly been committed. Moreover, it must be noted that the expiry of the statute of limitations in the foreign jurisdiction prevents further prosecution in Sweden. When assessing whether or not a  benefit is inappropriate in a  case of alleged corruption, Swedish courts take into consideration local case law and trade practices from the jurisdiction where the act was committed.

V ASSOCIATED OFFENCES: FINANCIAL RECORD KEEPING AND MONEY LAUNDERING

Allegations of bribery may often originate in or entail other ancillary economic crimes such as inter alia bookkeeping crime, tax evasion, misappropriation of funds, fraud, misuse of office or breach of trust.

i Financial record keeping

The Annual Accounts Act and the Bookkeeping Act are the two most important accounting acts in Sweden. The Bookkeeping Act obliges corporations and many other legal entities12 to maintain regular accounts of all business transactions, to preserve records of the accounts up to and including the seventh year following the expiry of the calendar year in which the accounting year was closed, and to close the accounts with an annual report each financial year.

Wilful or careless neglect in maintaining proper accounts may constitute a bookkeeping crime pursuant to Chapter 11, Section 5 of the Penal Code, punishable with imprisonment for up to two years. Should the violation be assessed as gross, imprisonment for not less than six months and not more than four years is to be imposed.

In addition, there are other provisions on maintaining and preserving accurate corporate books, periodic financial statements and external auditing, arranged under the Swedish Companies Act, the Auditing Act, the Income Tax Act and the Money Laundering Act (see below).

12 Natural persons doing business are also subject to the Bookkeeping Act.

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ii No tax deductibility for bribery payments

Pursuant to Chapter 9, Section 10 of the Income Tax Act domestic and foreign bribes or any other illicit payments are not deductible. However, for a long time bribes to foreign companies were tax deductible in Sweden. It was not until 1999 that the deductibility for bribes paid abroad was abolished.

iii Money laundering

The Swedish Act to Prevent Money Laundering and Financing of Terrorism (the Money Laundering Act) implements the corresponding EU directive.13 Anyone doing business encompassed by the Swedish Money Laundering Act, including among others credit and financial institutions, law firms,14 accountants, auditors, tax advisers and real estate agents, is under an obligation to monitor transactions and report suspicions of money laundering or terrorist financing to the police Finance Intelligence Unit. This would include, for example, proceeds of bribery. Violations of the Money Laundering Act are only sanctioned by fines but will also have a negative impact in respect of licences or permits to operate business.

VI ENFORCEMENT: FOREIGN BRIBERY AND ASSOCIATED OFFENCES

As many Swedish companies are multinational and do business in countries where corruption is more common, they are vulnerable to bribery abroad.15 Historically though, Sweden has unfortunately not prioritised the work against corrupt practices abroad. This is something that has been criticised in the Organisation for Economic Co-operation and Development (OECD) evaluation of Sweden’s implementation and application of the OECD Anti-Bribery Convention.16 Between 1997 and 2012 only one case of foreign bribery was successfully prosecuted, despite several allegations against Swedish citizens operating abroad. However, the attitude is changing and Sweden is making efforts to combat foreign bribery.

In a  landmark case in 2012, two former executives of Volvo Construction Equipment International AB, a  subsidiary of Volvo AB, were found guilty of having violated UN sanctions on Iraq,17 by their involvement in payments to the Iraqi regime

13 Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing.

14 There are certain exemptions related to providing criminal defence.15 Transparency International, ‘Exporting Corruption: Progress Report 2013: Assessing

enforcement of the OECD Convention on combating foreign bribery’.16 OECD, ‘Phase 3 Report on Implementing the OECD Anti-Bribery Convention in Sweden’,

June 2012, p. 17.17 The case has attracted much attention, but it is often wrongly reported that the executives

were convicted of bribery, which they were not. No such charges were brought.

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in connection with sales contracts concluded under the Oil-for-Food programme. The executives received suspended sentences and fines.

Another case that received publicity was the conviction of two former executives of the consulting firm Sweco in July 2013. The former executives were indicted on charges of inter alia bribe-giving related to Sweco’s involvement in a public procurement process for a public water supply project in Ukraine, funded by Sida and the World Bank. They received suspended sentences. The judgment was appealed in August 2013 and is still pending at the Svea Court of Appeal.

In 2012, a high-profile investigation was initiated against the Swedish-Finnish telecommunication company TeliaSonera AB’s transactions in Uzbekistan under suspicion of inter alia gross bribery and complicity in gross bribery. The case is still ongoing.

VII INTERNATIONAL ORGANISATIONS AND AGREEMENTS

Sweden is a  signatory to several international anti-corruption conventions, including, for example, the UN Convention against Corruption, the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, various EU instruments, the Council of Europe Criminal Law Convention on Corruption, the Council of Europe’s Civil Law Convention on Corruption, the Council of Europe’s Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and GRECO.

VIII LEGISLATIVE DEVELOPMENTS

In recent years, Sweden has taken steps to comply with the recommendations and instructions from the OECD Working Group on Bribery. A steady rise in the enforcement of corruption has been observed and Sweden’s efforts to enforce its legislation against foreign bribery have been recognised by the OECD Working Group on Bribery. Nonetheless, there are still some areas of concern that, according to the Working Group, need to be addressed.18

According to the OECD, the Penal Code’s provisions on corporate fines should be amended, since the maximum level of fines is too low to be an effective deterrent. For this purpose, Sweden has declared its intention to appoint a committee of enquiry in the autumn of 2014.19 The main task of the committee will be to ensure that the framework on corporate fines is effective and in line with the OECD Anti-Bribery Convention.

The OECD has also recommended that Sweden take urgent measures to ensure that dual criminality for the purpose of applying national jurisdiction in relation to foreign bribery can be established regardless of whether the statute of limitations in the foreign jurisdiction has expired or the level of sanctions is lower in the foreign jurisdiction. The government has not yet initiated any review of those rules.

18 OECD, ‘Sweden: Follow-up to the Phase 3 Report & Recommendations’, August 2014, p. 4.19 OECD, ‘Sweden: Follow-up to the Phase 3 Report & Recommendations’, August 2014, p. 4

and the ‘EU Anti-Corruption Report’ (p. 10).

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Further, Sweden has recently taken initiatives to facilitate whistle-blowing. In November 2013 a state enquiry proposed legislation to extend the Swedish rules on the right to communicate information for the purpose of publication, so that this right will also apply equally to employees in private entities that provide publicly funded services in the fields of education, health care and social services20 (see also Section IX, infra).

In May 2014, another state enquiry presented proposals for an act on strengthened protection for whistle-blowers. According to the proposal, employers will be prohibited from retaliating against an employee who makes public serious wrongdoings, in accordance with certain procedures. The freedom from retaliation is to be sanctioned by a  right for the employee to claim damages for unlawful retaliation.21 The enquiry further proposes that the Work Environment Act be amended so that all employers will be required to make sure that there are routines for internal reporting of serious wrongdoings, in proportion to their organisation’s needs.22

IX OTHER LAWS AFFECTING THE RESPONSE TO CORRUPTION

i Whistle-blowing in general

Although, as noted above, work is ongoing to strengthen whistle-blower protection, Sweden has not yet introduced legislation specifically targeting whistle-blowing.

Employees in the public sector23 enjoy a  constitutional right to communicate information, of any kind, anonymously for the purpose of publication in print or other media, even if the information is classified under the Public Access and Secrecy Act. Only information that is classified by qualified secrecy is exempt from this right. The employees’ right to communicate information for the purpose of publication is further protected by rules that prohibit the employer from making enquiries into the identity of the person reporting.

Employees in general enjoy relatively strong protection in Swedish law. Pursuant to the Employment Protection Act, an employer must have a just cause and objective grounds to terminate an employment. Internal whistle-blowing is not objective grounds for termination, as long as the criticism is communicated objectively and not aimed at harming the employer.24

External whistle-blowing might, in principle, conflict with the employee’s duty of loyalty and secrecy towards the employer. Still, it may not constitute just cause for termination if: (1) the reported information concerns serious wrongdoings or crimes;

20 SOU 2013:79, ‘Stärkt meddelarskydd för privatanställda i offentligt finansierad verksamhet’.21 SOU 2014:31, ‘Visselblåsare: Stärkt skydd för arbetstagare som slår larm om allvarliga

missförhållanden’, pp. 32–36.22 SOU 2014:31, pp. 32–36.23 This includes the state administration, municipal administration and companies owned by

the municipalities but not state-owned companies. See also Section VIII, supra, regarding possible future extensions.

24 See, for example, AD 1962 nr 27, AD 1982 nr 110, AD 1986 nr 95, Ad 1994 nr 79, AD 1997 nr 57, AD 2006 nr 103, AD 2007 nr 53.

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(2) the employee has reported the information internally first, but the employer has chosen not to responded adequately; and (3) the purpose of the reporting is to correct the situation and not to hurt the employer.25

Over the past years, many large Swedish companies have chosen to implement whistle-blowing systems. However, the far-reaching Swedish rules on data protection may make such systems difficult to implement.

ii Whistle-blowing and data protection

The Data Inspection Board is the public authority entrusted with monitoring compliance with, among other laws, the Personal Data Act. The Data Inspection Board has issued rather strict guidelines on how companies may process personal data in whistle-blowing systems without having to apply for special permission from the Data Inspection Board.26 For example, information about criminal offences may only concern persons in key positions or a leading position within the same company or group and it must be limited to serious improprieties concerning accounting, internal accounting controls, auditing matters, bribery, banking and financial crime, or other serious improprieties concerning the company’s or the group’s vital interests or the life or health of individual persons, such as, for instance, serious environmental crimes, major deficiencies regarding security at the place of work and very serious forms of discrimination or harassment.27

X COMPLIANCE

There is growing consensus among Swedish companies on the necessity of adequate compliance measures with the aim of preventing and detecting corrupt practices, and corporate compliance programmes are now commonplace among large companies.

As mentioned above, the Swedish Penal Code contains general provisions regarding corporate fines, which are applicable in cases of bribery committed in the course of a company’s business. Adequate compliance measures can affect the company’s exposure to fines under these rules in two different ways.

First, they can be a defence in certain situations, (e.g., in cases where lower level employees have committed the bribery offence (see Section II, supra)).

Secondly, under certain circumstances a corporate fine can be reduced in cases where the company has tried to prevent or limit the negative effects of the crime and in cases where the company has voluntarily reported the crime to appropriate authorities.

25 AD 1986:95; Glavå, Mats, Arbetsrätt, pp. 602–606, 2nd edn, 2011; Helmius, Ingrid, JD, ‘Providing an Alternative to Silence: Towards Greater Protection and Support for Whistleblowers in the EU: Country Report: Sweden (September 2012)’, p. 3.

26 Data Inspection Board, ‘Guidelines for companies: Responsibility for personal data processed in whistleblowing systems’, October 2010, available at www.datainspektionen.se.

27 Ibid.

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There is no authoritative guidance available on what constitutes an effective anti-corruption compliance programme, but the Business Code deals briefly with measures to prevent bribery and improper influences and gives some guidance on the contents of a  policy to prevent corrupt practices (Section  11 of the Business Code). However, the Business Code does not provide any guidance on effective compliance measures – or adequate procedures – in the broader sense.

XI OUTLOOK AND CONCLUSIONS

Although Sweden is generally perceived as a  ‘clean’ country with adequate legislation against corruption, recurring scandals as well as international comparisons and evaluations by the OECD Working Group and the EU have stressed the need for further improvements. In response, the government has taken several initiatives during the past years, such as the adoption of revised and amended legislation in 2012, ongoing legislative work to improve protection of whistle-blowers and instructions to the prosecutors to encourage the prosecution of foreign corruption cases.28 It can also be expected that the levels of corporate fines will be raised within the next few years.

Pursuant to the EU Anti-Corruption Report, some of the areas that require further attention are the transparency of the financing of political parties, transparency in municipalities’ and counties’ contracts with private entrepreneurs, monitoring of compliance at local government level and ensuring that the liability of legal persons for foreign bribery is triggered in cases where the offence is committed through individuals or legal entities that are not Swedish.29 The newly introduced crime regarding negligent financing of bribes is intended to address the problems of intermediaries but may not suffice where the bribery is committed by someone representing a foreign subsidiary.

Another issue that is being debated is the fact that Sweden does not yet have any rules restricting the possibilities for former politicians or other government to take up positions in private enterprises, once they have left their official assignments. In the current legal situation, a  former minister, for example, may without any ‘cool down period’ accept employment in industries that were included in his or her former ministerial portfolio. No official initiative has yet been taken to rectify this unsatisfactory situation.

28 OECD, ‘Sweden: Follow-up to the Phase 3 Report & Recommendations’, August 2014.29 ‘Annex Sweden to the EU Anti-Corruption Report’, Brussels 3.2.2014, p. 10.

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Appendix 1

ABOUT THE AUTHORS

PEDER HAMMARSKIÖLDAdvokatfirman Hammarskiöld & CoPeder Hammarskiöld is the senior partner at Hammarskiöld & Co and specialises in M&A, litigation, corporate governance and corporate investigations. Mr Hammarskiöld has participated in several of the most significant transactions in Sweden in the past few years and is very active in the area of corporate governance, working for both Swedish and foreign companies. Over the years he has taken an active part in the Swedish anti‑corruption debate and regularly advises Swedish and international companies in this area.

Mr  Hammarskiöld is the author of numerous articles in legal journals and magazines.

JOAKIM SUNDBOMAdvokatfirman Hammarskiöld & CoJoakim Sundbom is a partner and head of compliance and investigations at Advokatfirman Hammarskiöld & Co. Mr  Sundbom has extensive experience of assisting companies in investigations and audits and in compliance work, in relation to anti‑corruption and to other areas, in particular antitrust. Mr Sundbom counsels clients on a range of matters in these fields, both non‑contentious and contentious, including in litigation. Mr  Sundbom is an experienced adviser in a  wide variety of industries including, for example, the telecoms sector, manufacturing industries and consumer products markets, and in the markets of Sweden’s regulated monopolies. Mr Sundbom is recognised as a  leader in the area of competition and antitrust law by all major surveys of the legal profession and is listed in Who’s Who Legal: Competition Lawyers and Economists.

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SANDRA HEIN KAZNOVAAdvokatfirman Hammarskiöld & CoMs Sandra Hein Kaznova is a partner at Hammarskiöld & Co. Her practice focuses on domestic and international arbitration, commercial litigation, anti‑corruption compliance, corporate investigations, company law and corporate governance. She represents national and international clients in a wide range of business sectors and has undertaken internal anti‑corruption investigations in Sweden and abroad, including, for example, in Eastern Europe and Asia.

Ms Hein Kaznova is the author of various articles on company law and corporate governance in Swedish and international publications and has also served as secretary in an enquiry conducted within the Swedish trade ministry regarding the governance of state‑owned companies.

ADVOKATFIRMAN HAMMARSKIÖLD & COSkeppsbron 42PO Box 2278SE‑103 17 StockholmSwedenTel: +46 8 578 450 00Fax: +46 8 578 450 99peder.hammarskiold@hammarskiold.sejoakim.sundbom@hammarskiold.sesandra.hein‑kaznova@hammarskiold.sewww.hammarskiold.se