Facts

By judgment of 11 January 2002, the Police Court of the Canton of Geneva found the accused (A.X.) guilty of forgery of titles (art. 251 SCC) and lack of due diligence in financial transactions (art. 305ter SCC), sentencing him to six months’ imprisonment and a fine of 25,000 Swiss francs. It also found the accused’s spouse (B.X.) guilty of complicity in lack of due diligence in financial transactions, sentencing her to four months’ imprisonment suspended for three years and a fine of 10,000 Swiss francs.

The spouses X. appealed this judgment to the Criminal Chamber of the Canton of Geneva. By judgment of 5 May 2003, the latter partially allowed A.X.’s appeal, acquitting him of the charge of forgery of titles. It however confirmed his conviction for lack of due diligence in financial transactions, reducing his sentence to four months’ imprisonment suspended for four years and maintaining the fine of 25,000 Swiss francs. B.X.’s sentence was also reduced to three months’ imprisonment suspended for three years, with her fine maintained at 10,000 Swiss francs.

The facts underlying the conviction for lack of due diligence in financial transactions (art. 305ter SCC) are as follows:

  • A.X., active in the financial sector, had maintained business relations for several years with a German lawyer, Mr E., based in Frankfurt.
  • On 25 October 1995, Mr [E.] wrote to A.X. asking him to provide one of his clients, D., a Swiss company limited by shares, with a company. [D.] met A.X. in Geneva in November 1995 and purchased from him for 14,000 Swiss francs the company Y. SA, of which B.X. was the administrator.
  • A.X. did not ask to see D.’s passport, citing a desire not to be indiscreet. No documents were signed at the time of the sale of the company.
  • [D.] told A.X. that he was not acting on his own account, but as a fiduciary for a third party. A.X. then undertook the necessary steps with Bank Z. to open a bank account in the name of [Y. SA], for which [D.] was to have signing authority.
  • On 13 November 1995, the account opening documents were completed and signed by B.X. Form A, dated the same day, designated [D.] as the beneficial owner, with an address corresponding to that of Mr E. Bank [Z.] informed the spouses X. that the election of domicile of the beneficial owner with his lawyer was not admissible.
  • A second Form A, signed by B.X. and dated 22 December 1995, was sent to Mr [E.] and retrieved by the spouses X. during a meeting at the latter’s office, in the presence of D. It was agreed that Mr [E.] would send a copy of D.’s passport to Bank [Z.], which he did the same day.
  • The account was the subject of several transactions pursuant to transfer orders given by D.
  • A.X. filed an appeal in nullity with the Federal Supreme Court against the judgment of 5 May 2003, seeking its annulment. The Geneva Attorney General concluded that the appeal should be dismissed.

Considerations

The Federal Supreme Court examined whether A.X.’s conduct constituted an offence within the meaning of art. 305ter para. 1 SCC, which penalises lack of due diligence in identifying the beneficial owner in financial transactions. The central question was whether correct identification of the beneficial owner, even in the absence of sufficient diligence, excludes criminal liability.

The Court recalled that art. 305ter SCC is a pure special offence (echtes Sonderdelikt), which can only be committed by professionals in the financial sector. A.X., as an employee of a company limited by shares active in the creation and administration of companies and in opening bank accounts, fell within the scope of this provision. The Court also emphasised that A.X.’s criminal liability did not depend on that of Bank [Z.], which was not pursued in these proceedings.

The Court then analysed the scope of the duty of due diligence. It recalled that, according to prior case law (notably ATF 125 IV 139), the offence is constituted as soon as the perpetrator has not verified the identity of the beneficial owner with the required diligence, even if the funds do not originate from an offence. However, the Court clarified that this interpretation must be nuanced: if the beneficial owner is correctly identified, despite insufficient checks, criminal liability is excluded. Indeed, the…