Facts

Parties and procedural history:

The complainants are X. (as economic controller and managing director of Y. AG) and Y. AG, based in SocRA. The public prosecutor’s office of the Canton of SocRA filed charges for multiple violations of the Federal Act against Unfair Competition (UCA) (Art. 23 in conjunction with Art. 3 lit. b and h UCA).

Factual background:

Between November 1994 and April 1997, Y. AG sent out several waves of deceptive invoices resembling offers to recipients in various countries (including the United Kingdom, Australia, Finland, Sweden, Belgium, Italy, and Turkey). The forms suggested outstanding invoices for entries already made in international telex and telefax directories, aiming to induce recipients to pay approximately CHF 1,300. In total, 43 complaints were received from abroad, including criminal complaints. The then Federal Office for Industry, Trade and Labour (FOITL, now SECO) filed a criminal complaint against the responsible parties of Y. AG on 24 May 1995.

Procedural history:

  • 7 December 2001: The single judge of the Canton of SocRA convicted X. of unfair competition to a suspended prison sentence of 45 days. The assets seized at Y. AG (a fixed-term deposit of CHF 200,000 and current account credit of CHF 3,716.72) were confiscated pursuant to Art. 59 para. 1 SCC.
  • 3 July 2002: The criminal court of the Canton of SocRA acquitted X. on appeal and ordered the return of the seized assets.
  • 18 December 2002: The Federal Court partially upheld the public prosecutor’s office’s nullity appeal, quashed the judgment of 3 July 2002, and referred the matter for reconsideration. It found that the sales methods were not particularly aggressive (Art. 3 lit. h UCA), but the forms were misleading (Art. 3 lit. b UCA). It also examined the statute of limitations issue and denied the application of the new, more lenient statute of limitations law.
  • 28 March 2003: The criminal court of the Canton of SocRA convicted X. of unfair competition (sending the forms in November 1994, January 1995, and November 1995) to a fine of CHF 15,000 and ordered the confiscation of CHF 40,000 as well as a state claim for CHF 165,804.45.

Legal remedies: X. and Y. AG filed a federal nullity appeal seeking the annulment of the judgment and referral of the matter for reconsideration.

Considerations

On the confiscation of assets in relation to offences requiring a complaint (Art. 59 SCC):

The complainants argued that in the case of offences requiring a complaint, the confiscation of assets (Art. 59 para. 1 SCC) and substitute confiscation (Art. 59 para. 2 SCC) were excluded if a valid criminal complaint was lacking. The lower court and the Federal Court rejected this objection. While the criminal complaint was indeed a procedural prerequisite whose absence precluded prosecution, it did not preclude the confiscation of assets. Confiscation was a measure, not a secondary penalty, and served the public interest in preventing criminally obtained enrichment. The UCA protected fair competition in the interest of all parties involved, not merely the individual aggrieved party. Therefore, confiscation was permissible even in the absence of a valid complaint, provided the underlying offence was objectively and subjectively criminally relevant. This applied regardless of whether the complaint was invalid for legal or factual reasons or whether the aggrieved party mistakenly assumed official prosecution. Confiscation served preventive purposes and ensured that criminal conduct did not pay.

On the statute of limitations for prosecution and confiscation rights:

The Federal Court clarified its case law on statute of limitations. Where a final cantonal conviction for certain offences had not been or was unsuccessfully challenged with a federal nullity appeal and thus remained materially final, the prosecution limitation period definitively ended with the issuance of the final cantonal decision. This also applied if the challenged judgment was formally quashed for other reasons and the lower court had to reassess the penalty. The same applied to the limitation period for confiscation rights. In the present case, the conviction for sending the forms in November 1995 (Art. 23 in conjunction with Art. 3 lit. b UCA) had been…