What happens if someone I invited to Schengen area does not leave?

I (EU citizen) acted as a guarantor for non-EU citizens more than 10 times and in hindsight, I would never do that again. I had an expert lawyer on Schengen regulations counseling me and they clearly stated that if anything goes wrong the state authorities will make the guarantor pay for any expenses including, but not limited to, deportation.

You will not be blamed directly for them failing to leave in time, and you will not be held responsible in case they “disappear” somewhere in a Schengen country, or apply for asylum with whatever outcome – but none of this will change your financial liabilities to the authorities. Simply put: if the executive or the state has expenses for the case, they will ask for that money from you, up to a maximum of some amount around € 25.000,–

Your options:

• do nothing and expect a financial loss as stated in worst case. it is likely that the immigration office will contact you when the visa expired and no exit is recorded in SIS. I had one case where the invited party was a day late and on monday after I was asked to see immigration police and explain.
• inform the officer who processed the invitation. they may or may not be helpful, this can be risky
• lawyer up and work out a defensive strategy.

In addition to the answer above, you do not mention your own status in Switzerland. Are you a citizen, long term resident or on a temporary visa?
If you are a citizen probably you have less to worry, but if you are indeed looking for applying for a citizenship, such things could complicate matters.

Switzerland has several instances of denying citizenship including matters which may seem trivial such as refusing to shake hands and being annoying to the local residents.
Your case depends on the severity of the crime your guests are being prosecuted for at their home country. They would not be getting asylum unless they are being prosecuted for causes which are basic human rights in the western world (eg: their sexuality or religion). (They could of course lie to the German authorities to claim asylum somehow.)

If they are being persecuted for criminal charges, this could well end up against you considering you abetted them in escaping. All this of course depends on how much information the Swiss officials would get about this case, but in case they know it, there is no way this would support your cause.

According to the Swiss government’s Information on Declaration of Sponsorship (pdf), a guarantor cannot legally vouch for a guest’s departure from Switzerland. Any statements you may have made purporting to guarantee your guest’s departure from the Schengen area are probably therefore without effect.

If you submitted such a form, you have undertaken to guarantee the payment of certain costs related to your guest, should they arise:

• By signing the declaration of sponsorship, the guarantor undertakes to cover the following costs:
  Costs arising from sickness, accident, return transport and living costs, which would otherwise arise for public welfare or private medical services during the applicant’s stay in Switzerland

• A maximum of CHF 30,000 for individuals or groups and families of up to 10 people who are travelling together.

Since the document appears to cover costs arising from the applicant’s stay in Switzerland, as opposed to the Schengen area, you may even be off the hook if your (former) guest incurs any such costs in Germany.

Without having access to the actual text of the form, it is difficult to say anything more precise. If you can post the text of the guarantee, perhaps as an image of the form with identifying information blacked out, it may be possible to analyze it in more detail.

As you indicate in a comment that you didn’t submit a formal guarantee but rather an informal statement in your invitation letter, the government probably discounted the guarantee from the start. Such guarantees generally do not carry any weight, since a sponsor or host is not really in a position to offer the guarantee.

In most cases, a guarantee says that the guarantor will do something specific if a certain condition is met. For example, when a merchant offers a money-back guarantee of the consumer’s satisfaction, the merchant is undertaking to refund money when the consumer is unsatisfied. The guarantee you gave has no such backing: you haven’t undertaken to do anything in particular if the person does not leave.

You are perhaps right to wonder whether your credibility would be called into question for future visa applications where you are the sponsor. There’s not much you can do about that at this point, except to hope that the Swiss don’t notice. It might also be a good idea not to make any claims about your prospective guests’ plans to leave the Schengen area; that’s normally a matter between the state and the traveler (unless the host has signed the formal declaration of sponsorship, of course).

If the host has not signed the declaration, then the host’s role in the visa application is generally just to confirm the traveler’s itinerary and that the traveler has a place to sleep. The host does not play a significant role in the assessment of whether the applicant will leave the country.