Anti-Corruption 2022

Last Updated December 07, 2021

France

Law and Practice

Authors



Bougartchev Moyne Associés AARPI was formed in January 2017, when Kiril Bougartchev and Emmanuel Moyne joined forces to create a law firm combining all the disciplines of business litigation, and specialising in criminal law. They are supported by a team of around ten lawyers. As litigators recognised throughout their profession, the founders and their team assist public and private enterprises such as banks, financial institutions, insurance companies and their executives, as well as prominent figures in all disputes to which they are a party, whether involving white-collar crime, civil and commercial law or regulatory matters. With wide experience of emergency, complex, cross-border and multi-jurisdictional proceedings, Bougartchev Moyne Associés' lawyers assist their clients both in France and internationally, and with the benefit of privileged relations with counterpart law firms on all continents. Primary practice areas are white-collar crime, compliance, investigations, regulatory disputes, civil and commercial litigation, as well as crisis and reputational injury management.

France has ratified a number of international treaties relating to bribery and corruption, the key ones being:

  • the European Union Convention on the Fight Against Corruption Involving Officials of the European Communities or Officials of Member States (signed by France on 26 May 1997, approved by Law No 99-423 of 27 May 1999 and ratified on 4 August 2000);
  • the Organisation for Economic Co-operation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (signed by France on 17 December 1997, approved by Law No 99-424 of 27 May 1999 and ratified on 31 July 2000);
  • the Council of Europe criminal law convention on corruption of 27 January 1999 (signed by France on 9 September 1999, approved by Law No 2005-104 of 11 February 2005 and ratified on 25 April 2008);
  • the Council of Europe civil law convention on corruption of 4 November 1999 (signed by France on 26 November 1999, approved by Law No 2005-103 of 11 February 2005 and ratified on 25 April 2008);
  • the additional protocol to the Council of Europe criminal law convention on international corruption (signed by France on 15 May 2003, approved by Law No 2007-1154 of 1 August 2007 and ratified on 25 April 2008); and
  • the United Nations Convention against Corruption of 31 October 2003 (signed by France on 9 December 2003, approved by Law No 2005-743 of 4 July 2005 and ratified on 11 July 2005).

The main national legal provisions relating to anti-bribery and anti-corruption are enshrined in the Penal Code and the Code of Criminal Procedure.

Law No 2016-1691, called the Sapin II Law, signed on 9 December 2016 and entered into force on 11 December 2016 with regard to most of its provisions, strove to make further progress in the fight against corruption by providing:

  • the introduction of a new duty to prevent bribery or influence-peddling in France or abroad for chairmen, chief executives and managers of large private and public companies, consisting of setting up a comprehensive compliance programme;
  • the creation of the French Anti-corruption Agency (FAA), an authority in charge of monitoring the quality and efficiency of compliance measures implemented within the companies and public entities concerned;
  • the introduction of the offence of influence-peddling of foreign public officials and a new ancillary penalty consisting of a compliance programme (programme de mise en conformité);
  • the extension of the French judges’ jurisdiction over acts of bribery and influence-peddling committed abroad;
  • the introduction of a new ADR mechanism called a public interest judicial convention (convention judiciaire d’intérêt public), available for legal entities suspected of acts of bribery or influence-peddling, laundering of tax fraud proceeds (extended to tax fraud in 2018, while a possible extension to environmental offences is currently examined by the French Parliament); and
  • the strengthening of the protection of whistle-blowers.

More recently, Law No 2020-1672 relating to the European Public Prosecutor's Office, environmental justice and specialised criminal justice, signed on 24 December 2020 and entered into force on 26 December 2020, provided for:

  • the implementation of the European Public Prosecutor’s Office (EPPO), which shall be responsible for investigating, prosecuting and bringing to judgment the perpetrators of, and accomplices to, criminal offences affecting the financial interests of the European Union which are provided for in Directive (EU) 2017/1371, such as misappropriation of European funds, active and passive bribery, transnational VAT fraud when it involves at least two Member States and when more than EUR10 million are at stake, custom offences and related money laundering;
  • the extension of the public interest judicial convention’s scope (convention judiciaire d’intérêt public), now available for environmental offences;
  • the abolition of the acknowledgment, by legal entities, of facts and criminal qualification on the occasion of the conclusion of a public interest judicial convention at the end of the judicial investigation. The deletion of such a requirement, which only existed within the framework of a judicial investigation, fully asserts the autonomy of the public interest judicial convention procedure in relation to that of “appearance pursuant to a prior admission of guilt” procedure (comparution sur reconnaissance préalable de culpabilité, CRPC).

On 26 June 2019, the FAA and the National Financial Prosecutor's Office released, for the first time, joint guidelines on the application of the public-interest judicial convention in order to encourage legal entities to adopt such a co-operative approach with the French authorities.

In its first decision rendered on 4 July 2019, the Enforcement Committee confirmed that FAA recommendations are not legally binding, even if public institutions and companies are encouraged to follow them. In a second decision handed down on 7 February 2020, it specified that the failure to comply with the FAA’s recommendations, which would add obligations not provided for by the law in force, cannot lead to the imposition of a sanction.

In January 2020, the FAA published a practical guide relating to anti-corruption audits in the context of mergers and acquisitions.

On 12 January 2021, the FAA published new recommendations, structured in three parts. The first part consisted of general provisions relating to the anti-corruption system applicable to all players, based on three pillars: (i) the commitment of the management body, (ii) the knowledge of the risks of corruption to which the entity is exposed (mapping of its risks) and (iii) the management of these risks by means of prevention, detection and remediation measures. The second part concerned companies referred to in Article 17 of the Sapin II Law. It introduced details for each of the procedures constituting their anti-corruption programme, notably risk-mapping and evaluation of the integrity of third parties. In terms of detection, the FAA’s recommendations encouraged firms to set up a unique system for collecting alerts. Finally, the FAA recalled the principle of gradation of sanctions. The third section was devoted to public players referred to in Article 3 of the Sapin II Law. The recommendations detailed the methodology for conducting a corruption-risk map.

In July 2021, the FAA published a new version of its questionnaire for entities referred to in Article 17 of the Sapin II Law, taking into account its new recommendations. Questions are more precise, requiring more detailed answers, notably regarding risks-mapping and assessment of third parties.

The EPPO started its activities on 1 June 2021. It deals with a two-level supranational Prosecutor’s office:

  • the central level, located in Luxembourg, comprises the European Chief Prosecutor and a College of 22 European Prosecutors;
  • the decentralised level is made up of European Delegated Prosecutors (EDP) located in each of the participating EU countries and in charge of investigating, prosecuting and bringing to judgment cases where the financial interests of the European Union are at stake. Among the 88 EDP already appointed, four have been appointed for France.

In France, an unprecedented procedural framework was created by Law No 2020-1672 dated 24 December 2020, mixing investigations (enquête) and judicial inquiry (instruction).

The four EDPs carry out the duties of the Public Prosecutor and those of the Advocate General at the Court of appeal.

Indeed, the EDP replaces the investigating judge (juge d’instruction), who is no longer involved. The EDP can take all appropriate decisions in the judge's place regarding indictment (mise en examen), interviews and confrontations, hearing of witnesses, admissibility of civil claims and hearing of the plaintiff (recevabilité de la constitution de partie civile et audition de la partie civile), transport, letters rogatory (commission rogatoire), forensic investigations, judicial supervision (contrôle judiciaire), search warrants and summons.

However, the power to take a house arrest (assignation à résidence) or to issue arrest warrants (mandats d’arrêt) is assigned to the custody judge (juge des libertés et de la détention), who also keeps jurisdiction on pre-trial custody.

At the end of the inquiry, the EDP will decide on the direction of the case and issue an order in the same way as an investigation judge, under the supervision of a Permanent Chamber, which consists of the Chief Prosecutor and two European Prosecutors. In accordance with the decision taken by the Permanent Chamber, the EDP can close the case, bring the case to judgment before the Paris criminal court or propose alternative measures to prosecution (French guilty plea or deferred prosecution agreement).

Under French criminal law, the prosecution of bribery (corruption) revolves around the status of the person bribed so that a specific offence exists for each type of person. The French legislator has criminalised bribery of domestic public officials (Articles 433-1 and 432-11 of the Penal Code), bribery of domestic judicial staff (Article 434-9 of the Penal Code), bribery of domestic private individuals (Articles 445-1 and 445-2 of the Penal Code), bribery of foreign or international public officials (Articles 435-1 and 435-3 of the Penal Code) and bribery of foreign or international judicial staff (Articles 435-7 and 435-9 of the Penal Code).

The bribe can be defined as any offer, promise, donation, gift or reward unlawfully offered or requested that will induce or reward the performance or the non-performance by a person of an act pertaining to his or her position.

The scope of the bribe is extensive under French law, covering all kinds of advantages without consideration of their magnitude. In a decision handed down in 2018 (Paris Court of Appeal, 10 April 2018, No 16/11182), the Paris Court of Appeal enshrined the bundle of indicators method (méthode du faisceau d’indices) to determine the existence of a corruption pact. Thus, the following indicators were likely to be regarded as relevant in a case where three litigious consultancy contracts were involved: the absence or inadequacy of precise and conclusive documents, the inadequacy of the consultant's material and human resources with regard to the importance of the work claimed, the percentage-based remuneration or the unjustified obtaining of the contract by the consultant's client.

The same Court of Appeal specified that the bundle of indicators identified in this decision is not exhaustive, so that the court may look for other elements to determine the existence of a corruption pact (Paris Court of Appeal, 15 September 2020, No 19/09058).

In each situation, a distinction is made between active bribery and passive bribery, which allows for the separate prosecution of the bribe-giver and the bribe-taker.

Active bribery is the act of (i) unlawfully offering, at any time, directly or indirectly, advantages (as previously listed) to a person (public official, judicial official or private individual) for the benefit of that person or of a third party, to induce that person to perform or refrain from performing, or because that person has performed or refrained from performing, any act pertaining to his or her position, duties, mandate or activities, or facilitated thereby, or (ii) accepting the proposal of a person who unlawfully requests, at any time, directly or indirectly, any such advantages in exchange for these acts.

In contrast, passive bribery is the act whereby a person (public official, judicial official or private individual) unlawfully requests or accepts advantages (as listed above), at any time, directly or indirectly, on his or her own behalf or on behalf of a third party, to perform or refrain from performing, or because that person has performed or refrained from performing, any act pertaining to his or her position, duties, mandate or activities, or facilitated thereby. The mere receipt of a bribe thus constitutes an offence in itself.

Bribery is also punishable when it only involves private parties.

The scope of French anti-bribery law encompasses all managers or employees as well as volunteers and learned professionals, regardless of the entity to which those persons are attached (individual, legal entity, grouping without legal personality).

Influence-peddling (trafic d’influence) is an offence that occurs when any person (whether a private person or official) who has real or apparent influence on the decision-making of an authority exchanges this influence for an undue advantage (offer, promise, donation, gift or reward). The French legislator has criminalised active and passive influence-peddling where the decision-maker is a domestic authority or public administration (Article 433-2 of the Penal Code) or a domestic judicial official (Article 434-9-1 of the Penal Code) or a public official from a public international organisation (Articles 435-4 and 435-2 of the Penal Code) or a judicial official from an international court (Articles 435-8 and 435-10 of the Penal Code) or, following the Sapin II Law, a public official from a foreign state (Articles 435-4 and 435-2 of the Penal Code). Furthermore, the Penal Code provides for specific offences where the influence-peddler is a public official and the decision-maker is a domestic authority or public administration (Articles 433-1 and 432-11-2° of the Penal Code).

In practice, corruption may lead to accounting stratagems seeking to conceal in financial statements the benefits obtained or paid by using false invoices. Therefore, it is also an offence for the chairman, directors, members of the executive or supervisory board, de jure or de facto managers to publish or provide the shareholders with annual accounts that do not accurately reflect the company’s results. Individuals may incur a prison term of up to five years and a fine of up to EUR375,000 and additional penalties (Article L.241-3-3° and Article L.242-6-2° of the Commercial Code); legal entities may incur a fine of up to EUR1,875,000.

Other behaviours involving public officials in the area of corruption may constitute criminal offences under French law: misappropriation of public funds (concussion - Article 432-10 of the Penal Code), unlawful taking of interest (prise illégale d’intérêts - Article 432-12 of the Penal Code), embezzlement of public funds (détournement de fonds publics - Article 432-15 of the Penal Code) and favouritism (favoritisme - Article 432-14 of the Penal Code).

Prosecution may concern other parties than the bribe-giver and the bribe-taker who have variable involvement in the commission of the offence. In particular, under French criminal law, an individual or legal entity who knowingly, by providing aid or assistance, facilitates the preparation or commission of an offence, or induces through any advantage or gives instructions to commit an offence, is considered to be an accomplice to that offence and is subject to the same penalties as the principal perpetrator of the offence (Articles 121-6 and 121-7 of the Penal Code).

Furthermore, individuals and legal entities that engage in the concealment (Articles 321-1 and 321-12 of the Penal Code) or the laundering (Articles 324-1 and 324-9 of the Penal Code) of corruption offences may also be prosecuted.

As of 1 March 2017, the limitation period of corruption acts was increased from three years to six years following the day of commission (Article 8 of the Code of Criminal Procedure).

In addition, the starting point of the limitation period is also delayed for secret (occultes) and concealed (dissimulées) offences to the date on which they could be discovered under circumstances enabling prosecution (Article 9-1 of the Code of Criminal Procedure). Nonetheless, prosecution against offences such as bribery would in any event be time-barred for 12 full years following the day on which the offence was committed.

As a general rule, the perpetrator of an offence can be subject to criminal prosecution in France when:

  • the offence or any of its constituent elements is committed in French territory;
  • the victim is French;
  • the perpetrator is French and a similar offence exists in the country in which it is committed; or
  • jurisdiction is granted to French courts by an international convention to which France is a party.

With regard to bribery and influence-peddling, the third of these conditions was considerably softened by the Sapin II Law. The dual-criminality requirement (Article 113-6 of the Penal Code) was abolished. Since the entry into force of the Sapin II Law, any French person who has committed bribery, whether as a bribe-taker and/or a bribe-giver, or influence-peddling outside French territory, can now be prosecuted in France in all circumstances. Moreover, French courts still have jurisdiction over an indicted foreigner who did not commit any unlawful act in French territory, as long as his or her acts had inextricable links with acts committed by other indicted persons in France (Court of Cassation, Crim. Ch., 20 September 2016, No 16-84.026).

In addition, application by French courts of the principle of non bis in idem regarding countries that do not belong to the EU differs according to the basis of their jurisdiction.

In the case of extra-territorial jurisdiction, this principle applies to foreign decisions and agreements that have become final (Article 113-9 of the Code of Criminal Procedure).

In the case of territorial jurisdiction, the French Court of Cassation rejects its application to foreign decisions and agreements. Whenever one of the constituent elements of the corruption offence has been committed in France, French courts have jurisdiction (Court of Cassation, Crim. Ch., 17 January 2018, No 16-86.491; Court of Cassation, Crim. Ch., 14 March 2018, No 16-82.117; Paris Court of Appeal, 15 May 2020, No 18/03310).

In intra-EU relations, the principle of non bis in idem may be invoked, regardless of the territorial or extra-territorial basis of French jurisdiction.

Legal entities may also be criminally liable for all criminal offences, including corruption offences, provided that the offences are committed on their behalf by their corporate bodies or representatives (Article 121-2 of the Penal Code). Public Prosecutors first have to establish the material existence of the offence committed by an individual and then have to demonstrate that the perpetrator was a body or representative of the legal entity.

However, the liability of legal entities does not preclude individuals from also being liable if they are perpetrators of or accomplices to an offence: prosecution against any individual occurs independently of the prosecution that may be initiated against the legal entity.

There is also a risk of civil liability under Article 1240 and/or Article 1242 paragraph 5 of the Civil Code in the event of a sentence for corruption.

A compensation action may be carried out by any person who has suffered damage resulting from corruption, such as a competitor of the company or by approved anti-corruption associations (Transparency International France, Anticor and Sherpa, so far), which are entitled to act as a civil party in any criminal proceedings relating to corruption (Article 2-23 of the Code of Criminal Procedure).

Even in the event of the conclusion of a public-interest judicial convention (see 4.5 Safe Harbour or Amnesty Programme), legal entities may be required to pay compensation.

In the event of a merger by absorption, the French Court of Cassation ruled for the first time, in a decision rendered on 25 November 2020 (Court of Cassation, Crim. Ch., 25 November 2020, No 18-86.955), that the acquiring company can be criminally liable for an offence committed by the organs or representatives of the absorbed company on behalf of the latter prior to the merger. This new interpretation, in line with the case law of the European Court of Justice, is only applicable to mergers concluded as from 25 November 2020.

The French anti-corruption law does not provide for any specific defence.

Nevertheless, the perpetrator may be exempted from penalties, provided that his or her social rehabilitation has been established, the damage caused by the offence has been remedied and the disturbance arisen from the offence has ceased (Article 132-59 of the Penal Code). The judge has full discretion in granting any such exemption.

As explained in 4.1 Defences, the French anti-corruption law does not provide for any specific defence.

Conviction for corruption is possible, even if the amounts at stake are small. However, this may be considered to be a mitigating factor when the court determines the quantum of the penalty to be imposed.

In France, no sector is ruled out from the scope of corruption.

Co-operation with Investigators

Under French law, there is no special treatment of perpetrators of offences who co-operate with investigators and prosecutors. However, the co-operation of the accused person during the investigation and throughout the proceedings, and, in the case of legal entities, the adoption of compliance measures, may be considered to be mitigating factors by a court when it determines the quantum of the penalty to be imposed.

Self-Reporting

The Sapin II Law introduced the possibility for the perpetrators of, or the accomplices to, an offence of bribery of public officials or judicial staff only (private bribery being excluded) to have their penalties reduced by half if, by having informed the administrative or judicial authorities, they made it possible to put a stop to the offence or to identify other perpetrators or accomplices, if any (Articles 432-11-1, 433-2-1, 434-9-2, 435-6-1 and 435-11-1 of the Penal Code).

Leniency

French anti-corruption law does not provide for any leniency measures, apart from the aforementioned self-reporting regime. However, the court is free to adjust the penalty by reference to various factors.

Admission of Guilt

French law does not yet have an equivalent to the US process of plea-bargaining. However, Law No 2011-1862 of 13 December 2011 extended the scope of the CRPC to corruption offences. Under this procedure, the Public Prosecutor’s Office is entitled to offer directly and without a trial, on its own initiative or at the request of the accused or his or her lawyer, one or more penalties to a natural or legal person who acknowledges the acts of which he or she is accused (Article 495-7 of the Code of Criminal Procedure). If the accused accepts the penalty(ies) proposed, such penalty(ies) still have to be approved by the presiding judge of the High Court (for an example of a recent case where the CRPC was not approved, see 7.6 Recent Landmark Investigations or Decisions Involving Bribery or Corruption). The court judgment is deemed a conviction.

Settlement

According to the circular issued by the French Department of Justice on 2 June 2020, the opportunity of entering into a public interest judicial convention (CJIP) depends on the following factors:

  • the absence of judicial record of the legal entity;
  • the voluntary disclosure of the facts by the latter; 
  • the degree of co-operation with the judicial authority demonstrated by the managers of the legal person (in particular to enable the identification of the persons involved in the corruptive pact in question).

For legal entities, the main benefit of the public interest judicial convention is the absence of any acknowledgement of guilt, contrary to the CRPC procedure, which also implies the absence of any mention in the criminal record. Another interest is to protect them from the risk of exclusion from public procurement procedures to which they are exposed in the event of conviction by a court on the grounds of bribery of domestic or foreign public officials (Article 131-39 of the Penal Code and Article L.2141-1 of the Code of Public Procurement).

Under this procedure, the Public Prosecutor and the investigating magistrate (Article 180-2 of the Code of Criminal Procedure) are entitled to initiate a settlement, respectively before the initiation of prosecution or before the end of the investigation (in the latter case, at the request of, or in agreement with, the Public Prosecutor).

The accused legal entity is then offered the chance to enter into an agreement with (i) the obligation to pay a public-interest fine in proportion to the advantages gained from the offences within the limit of 30% of the annual average turnover calculated on the basis of the last three turnovers available, with the possibility of spreading the penalty over a maximum of one year, and/or (ii) the obligation to set up a compliance programme for a maximum of three years under the FAA’s supervision, and/or (iii) the obligation to compensate any identified victims in an amount and following modalities determined in the convention.

During a subsequent validation hearing, the judge decides whether to validate the proposed agreement. Once validated, the legal entity has ten days to withdraw from the agreement. Since Law No 2020-1672 dated 24 December 2020, each CJIP shall be published on the Ministry for Justice and Ministry for Economy’s websites. The FAA relays these publications on its website for conventions dealing with corruption.

Individuals who commit the offences of active bribery and passive bribery of domestic public officials and judicial staff may be imprisoned for a term of up to ten years, as well as be ordered to pay a fine of up to EUR1 million. The fine may be increased to double the proceeds generated by the offence (Articles 433-1-1°, 432-11-1°, 434-9 of the Penal Code). From 20 September 2019, individuals who commit such offences (i) which affect the revenue collected or the expenditure incurred by any institution or office of the European Union and (ii) in an organised gang may be ordered to pay a fine of up to EUR2 million.

Ancillary penalties may also be imposed, such as the prohibition (i) from holding public office, (ii) from engaging in the professional or social activity in the performance of which, or in connection with the performance of which, the offence was committed, for a period of up to five years, or (iii) from directing, administering, managing or controlling a company in any capacity, permanently or for a period of up to 15 years. Lastly, publication of the judgment may be ordered and the item that was used or was intended to be used to commit the offence, or any item that is a proceed of the offence, may be confiscated (Articles 433-22, 433-23, 432-17, 434-44 of the Penal Code).

Legal entities are liable for a fine of EUR5 million, which may be increased to double the proceeds generated by the offence, and ancillary penalties (Articles 433-25 and 434-47 of the Penal Code). 

Bribery of domestic judicial staff for the benefit or to the detriment of a person who is the subject of criminal prosecution is punishable by a 15-year term of imprisonment (Article 434-9 of the Penal Code).

Bribery of Foreign Officials

Active or passive bribery of foreign public officials or international judicial staff is punishable by penalties which are similar to the ones provided for bribery of domestic officials (Articles 435-3, 435-1, 435-14 and 435-15, 435-9, 435-7 and 435-15 of the Penal Code).

Bribery of Private Individuals

Active and passive bribery of private individuals by individuals is punishable by a five-year term of imprisonment and a fine of EUR500,000, which may be increased to double the proceeds generated by the offence (Articles 445-1 and 445-2 of the Penal Code), as well as ancillary penalties (Article 445-3 of the Penal Code), whereas legal entities are liable for a fine of EUR2.5 million, which may be increased to double the proceeds generated by the offence, as well as ancillary penalties (Article 445-4 of the Penal Code).

Influence-Peddling

Penalties similar to bribery are provided for influence-peddling (Articles 433-2, 434-9-1, 434-9-1, 435-4, 435-2, 435-8 and 435-10 of the Penal Code).

Repeated Offences

In the event of a repeated offence, the maximum penalties incurred are doubled. As regards individuals, this is the case when:

  • the perpetrator of acts of corruption punishable by a term of imprisonment of ten years had been convicted in the past for felony or any misdemeanour punishable by a term of imprisonment of ten years and a period of less than ten years has elapsed between the expiry or prescription date of the first penalty and the date of commission of the new offence (Article 132-9 §1 of the Penal Code);
  • the perpetrator of acts of corruption punishable by a term of imprisonment of more than one year and less than ten years had been convicted in the past for felony or any misdemeanour punishable by a term of imprisonment of ten years and a period of less than five years has elapsed between the expiry or prescription date of the first penalty and the date of commission of the new offence (Article 132-9 §2 of the Penal Code); and
  • the perpetrator of acts of corruption had been convicted in the past for the same corruption offence and a period of less than five years has elapsed between the expiry or prescription date of the first penalty and the date of commission of the repeated offence (Article 132-10 of the Penal Code).

Similar provisions apply to legal entities that have been convicted for a felony or misdemeanour before the commission of acts of bribery (Articles 132-13 and 132-14 of the Penal Code).

Public-interest Fine in the Event of a Public-interest Judicial Convention

According to the aforementioned joint recommendations of the FAA and the National Financial Prosecutor’s Office, the amount of the public-interest fine may be increased in the event of bribery of public officials, when the company has already been convicted of bribery, if it has used its resources to conceal acts of corruption or in the event of repeated and systematic acts of bribery. However, the amount of the public-interest fine may be reduced if the company has spontaneously disclosed acts of corruption before the opening of an investigation and within a reasonable time, if there is excellent co-operation with the Prosecutor and when the company carried out internal investigations, or when it implemented corrective measures.

The discretion of judges to determine penalties is one of the fundamental principles of French criminal law. The judge has thus full discretion to choose, from amongst the penalties applicable to the offence, those he or she deems appropriate and to determine their quantum, with the only restriction being the maximum prescribed by law (no minimum sentences).

However, the judge must in all cases explain the grounds for his or her decision if he or she imposes a prison sentence that is not suspended and provides for no adjustments to the penalty.

Article 17 of the Sapin II Law requires the implementation of a corruption-prevention plan for (i) chairpersons, general managers and company managers, as well as (ii) members of the management boards of public limited companies and (iii) chairpersons and general managers of public industrial and commercial establishments employing at least 500 employees, or belonging to a group whose headquarters has its registered office in France and whose turnover or consolidated turnover exceeds EUR100 million.

Persons subject to this obligation must therefore take measures, under the FAA’s supervision, to prevent and detect the commission, in France or abroad, of acts of corruption or influence-peddling by:

  • adopting a code of conduct, integrated into the internal regulations, and describing the behaviour to be prohibited;
  • implementing an internal alert system (detailed below);
  • establishing a risk map detailing the possible external solicitations according to the sector and geographical areas;
  • implementing a procedure for evaluating customers, first-tier suppliers and intermediaries;
  • carrying out internal or external accounting controls;
  • providing training to the most exposed managers and staff;
  • introducing disciplinary sanctions; and
  • establishing a system for internal monitoring and evaluation of the measures taken.

The legislator has empowered the FAA to assess the quality and effectiveness of the preventive measures and to impose, in the event of non-compliance, graduated sanctions (ranging from warnings to fines of up to EUR200,000 for individuals and EUR1 million for legal entities and injunction procedures to bring internal procedures into line) through its Enforcement Committee, regardless of the communication of any finding of a criminal offence for acts of corruption or influence-peddling to the Prosecutor.

In its second public decision handed down on 7 February 2020, the FAA Enforcement Committee provided procedural and substantive clarifications. Firstly, it recalled that grievances brought before the Enforcement Committee must be set out "in a sufficiently clear and precise manner so as to leave no doubt as to their content and scope". Failing this, it would be up to the Enforcement Committee to declare the proceedings null and void.

On the merits, the FAA director alleged that a company and its representative had failed to comply with Article 17 of the Sapin II Law by (i) not having a risks'-mapping in accordance with the requirements of this article, (ii) not having a code of conduct complying with the requirements of this article and (iii) not integrating the specific control points required by this article into the company's accounting control procedures. He requested the Enforcement Committee to order the company and its general director to adapt their internal procedures by 30 June 2020. In the event of non-compliance with these obligations, he proposed that a penalty of EUR1 million be imposed on the company and EUR100,000 on the general director. As regards the risks'-mapping grievance, the FAA Enforcement Committee specified that the failure to comply with the FAA’s recommendations, which would add obligations not provided for by the law in force, cannot lead to the imposition of a sanction. In the case at hand, it considered that the elements on which the FAA director relied were not sufficient to establish, at the date on which it sat down, that there had been such a breach. In contrast, the Enforcement Committee ruled that the company had committed two breaches (relating to the code of conduct and the accounting control procedures). In view of the importance of the improvements already made, the Enforcement Committee found that these breaches did not justify, at this stage of the proceedings, the imposition of a financial penalty. Thus, it ordered the company to comply with its obligations by respectively 1 September 2020 and 31 March 2021.

Then, on 7 July 2021, the FAA Enforcement Committee ruled on the compliance, by the company, with the injunction to draw up a code of conduct ordered on 7 February 2020. The Committee noted that the measures taken by the company are such as to make its code of conduct accessible to all its employees and partners and concluded that the company had met the requirements of Article 17 of the Sapin II Law. Therefore, the Enforcement Committee found that no further injunction, financial penalty or publication order should be issued against the company.

In the public sector, Article 40 of the Code of Criminal Procedure requires all public officials and civil servants who, in the performance of their duties, become aware of a felony or misdemeanour to inform the Public Prosecutor’s Office and provide it with all information in relation thereto. For instance, in 2020, the FAA notified three cases to the National Financial Prosecutor's Office and to Basse-Terre and Bordeaux Public Prosecutors' Offices concerning acts of bribery, embezzlement of public funds, favouritism or unlawful taking of interest, revealed during a control.

In the private sector, statutory auditors are required, under criminal penalties (Article L.820-7 of the Commercial Code), to report to the Public Prosecutor criminal acts of which they become aware. They are also required to report to Tracfin, the agency charged with dealing with illegal financial circuits, transactions involving sums that they know, suspect or have good reason for suspecting originate from an offence punishable by a prison sentence of more than one year or that contribute to financing terrorism (Article L.561-2 12° of the Monetary and Financial Code).

The Sapin II Law of 2016 went a step further in granting protection to whistle-blowers. Under this new system, they benefit under certain conditions from immunity against retaliatory measures by their employer (Article L.1132-3-3 §2 of the Employment Code) and against criminal prosecution for breach of secrecy (Article 122-9 of the Penal Code).

To be eligible for immunity, the person reporting an unlawful act needs firstly to match the definition of the whistle-blower as provided for in the Sapin II Law (Article 6); ie, “an individual who selflessly and in good faith reveals or signals a felony or a misdemeanour, a serious and manifest breach of an international commitment properly ratified or approved by France, or a unilateral act issued by an international organisation on this basis, or a law or a regulation, or a serious threat or harm to the public interest, that he had personal knowledge of.” Secondly, the person needs to comply with the required reporting procedure – the alert is reported in priority to the supervisor, the employer or any designated adviser. In the absence of response from the latter within a reasonable time, this alert can be sent to the judicial authority, the administrative authority or professional bodies. A further lack of response from authorities and professional bodies within three months allows the whistle-blower to make the alert publicly available, unless in the case of serious and imminent danger or risk of irreversible damage (Article 8 of the Sapin II Law).

The Social Chamber of the French Court of Cassation (Court of Cassation, Soc. Ch., 8 July 2020, No 18-13.593) recently granted the benefit of the whistle-blower protection to an employee who had been dismissed for serious misconduct after having filed a complaint against the manager of an agency of the company employing him. The Court of Cassation stated that an employee who has acted without bad faith cannot be dismissed, and specified that bad faith only results from the employee’s knowledge of the falsity of the facts reported.

Moreover, obstruction to whistle-blowers’ action constitutes an offence punishable by one year of imprisonment and a EUR15,000 fine. Defamation complaints against whistle-blowers are also discouraged: the maximum fine that may be imposed on plaintiffs for abusive or dilatory complaints are increased from EUR15,000 to EUR30,000 (Article 13 of the Sapin II Law).

Compliance measures are also imposed on large entities: companies of more than 50 employees, state administrations and municipalities are under an obligation to set up appropriate alert-management procedures to escalate reports from members of the personnel or external staff (Article 8 of the Sapin II Law).

Finally, a specific provision seeks to guarantee the strict anonymity of the whistle-blower and the information provided throughout the reporting process. The unlawful disclosure of such information is punishable by two years of imprisonment and a EUR30,000 fine (Article 9 of the Sapin II Law).

These protective measures, as described in 6.3 Protection Afforded to Whistle-Blowers, against dismissal, obstruction, identity disclosure and criminal prosecution for breach of secrecy can be viewed as sufficient incentives to report misdemeanours. Other incentives, such as financial rewards, do not apply.

The main national legal provisions relating to whistle-blowing are enshrined in the Penal Code (Article 122-9) and the Employment Code (Article L.1132-3-3 §2).

See 1 Legal Framework for Offences.

In French criminal law, the powers to prosecute and convict perpetrators of acts of corruption belong to judicial authorities and are not granted to administrative bodies.

The Public Prosecutor’s Office is empowered to decide whether it is appropriate to institute proceedings, although civil claimants may also initiate prosecution.

On 1 February 2014, a National Financial Prosecutor specialised in economic and financial matters, and more specifically in corruption and tax fraud matters, was created.

Cases investigated and prosecuted by the National Financial Prosecutor are brought to an investigating magistrate in Paris for deeper investigation and/or directly to a dedicated Criminal Chamber of the Paris High Court (32nd Chamber) for trial.

Aside from those specific powers, prosecutors at eight inter-regional specialised courts are also granted expanded territorial jurisdiction over a certain number of economic and financial offences, including some corruption offences, in highly complex matters. After carrying out a pre-trial investigation, the prosecutor may bring the case to an investigating magistrate of the same inter-regional specialised court for deeper investigation and/or directly to a specialised criminal chamber of this court for trial.

The various prosecutorial bodies are assisted by a specialised investigative service, the Central Office for the Fight Against Corruption and Financial and Tax Offences (Office Central de Lutte contre la Corruption et les Infractions Financières et Fiscales, OCLCIFF), created in 2013.

In addition, a number of administrative bodies have been created, dealing with tasks that may relate to corruption issues. An Agency for the Management and Recovery of Seized and Confiscated Assets in criminal matters (Agence de Gestion et de Recouvrement des Avoirs Saisis et Confisqués en matière pénale, AGRASC) was created by Law No 2010-768 of 9 July 2010. The AGRASC’s duties include recovering assets seized in criminal proceedings and conducting pre-judgment sales of confiscated assets when they are no longer needed as evidence or if they may lose value (2,496 goods sold in 2020, representing EUR8.2 million). Tracfin is the sole centre for collecting suspicions reported by the regulated professions subject to the anti-money laundering measures. It receives all reports of suspicions that may concern acts of corruption.

These agencies, as well as the High Authority for Transparency in Public Life,  play a fundamental role in detecting offences, in particular corruption offences. They deal with the Public Prosecutor's Office, which gives instructions to the enquiry services and ensures they co-operate fully.

The FAA (see 6.1 National Legislation and Duties to Prevent Corruption) is entitled to inform the Public Prosecutor about any act of corruption of which it might become aware (Article 3, 6° of the Sapin II Law). In addition, it monitors the proper implementation of the new ancillary penalty that can be imposed by judges on legal entities under Article 131-39-2 of the Penal Code, consisting of setting up a compliance programme.

For the execution of their tasks, its agents are entitled to require communication of any professional document (of any format) or any information held by the entity controlled. They can verify on the spot the accuracy of the provided information and interview any person who might be helpful. Any obstruction may be punished by a fine of EUR30,000 (Article 4 of the Sapin II Law).

In 2020, the FAA carried out 30 new controls, including one “compliance programme” control in execution of a CJIP signed on 29 January 2020 between a major European aircraft manufacturer and the National Financial Prosecutor’s Office and 29 “own-initiative” controls.

Starting from the observation of an unmet need for co-operation with anti-corruption authorities at the operational level, the FAA, the Italian National Anti-corruption Authority and the Serbian Anti-corruption Agency launched an international network of corruption-prevention authorities, the NCPA Network. Their initiative aims to provide an international operational platform for the exchange of technical information and the sharing of good practices.

In May 2020, the FAA, in partnership with the Council of Europe’s Group of States against Corruption (GRECO), the OECD and the NCPA released a joint analysis report entitled “Global Mapping of Anti-Corruption Authorities” based on data provided by 171 national authorities from 114 countries, in order to help anti-corruption practitioners to understand better national anti-corruption agencies' characteristics and needs, as well as to identify common trends and challenges.

The requests for information from the Public Prosecutor or a police officer can be sent to the holder of relevant information “by any means” (Articles 60-1 and 77-1-1 of the Code of Criminal Procedure).

Pursuant to Decree No 2017-329 of 14 March 2017, FAA-empowered agents are provided with an authorisation card when they carry out on-the-spot checks, which can only take place in business premises (excluding the private person's home) and during working hours. The representative of the entity must be informed that he or she can be assisted by the person of his or her choice.

The Public Prosecutor, regardless of its representative who takes action, is free to initiate prosecution against a person suspected of an offence, pursuant to the principle of discretionary prosecution (Article 40 of the Code of Criminal Procedure) and in light of the criminal policy defined by the Ministry for Justice and the General Prosecutor (Article 39-1 of the Code of Criminal Procedure). In a given matter, the Public Prosecutor can discretionarily decide whether:

  • to initiate prosecution, by summoning the accused person directly before a criminal court or by asking an investigating magistrate to carry out deeper investigations;
  • to implement alternatives to prosecution (such as a CRPC or public-interest judicial convention); or
  • to drop the case (Article 40-1 of the Code of Criminal Procedure).

See 7.4 Discretion for Mitigation.

In a decision handed down on 1 March 2021 by the 32nd Chamber of the Paris High Court, a former French President, his lawyer and a former magistrate were convicted of bribery of judicial staff and influence-peddling. In this case, investigations focused on the conclusion of a bribery pact: it was alleged by the Financial National Prosecutor that the magistrate had given information on a procedure pending before the criminal chamber of the Court of Cassation, in exchange for a position at the Monaco Council of State. It was objected by the defendants that the position in Monaco had never been requested and that the Court of Cassation rejected the politician's appeal, a decision which was therefore unfavourable to him.

The Court considered that the evidence of a bribery pact resulted from "a body of serious, precise and concordant indicators resulting from the very close ties of friendship between the protagonists, business relations reinforcing these ties, common interests tending towards the same goal, namely, the obtaining of a decision favourable to the interests of the former French President and telephone taps demonstrating the acts carried out and the counterpart offered".

Whereas the legality of the telephone taps was questioned by the defendants, the Court ruled that “while professional secrecy is an essential guarantee of a fair trial, it is not inviolable” and took into account the majority of the transcripts, since they revealed, in its view, evidence of the lawyer's involvement in criminal offences.

The three defendants were sentenced to three years' imprisonment (two of which were suspended). The former French President and his lawyer appealed this decision (Paris High Court, 1 May 2021, No 14056000872).

In a decision handed down on 10 March 2021, the criminal chamber of the French Court of cassation confirmed the decision of the Paris Court of Appeal, which had convicted several French companies of bribery of foreign officials, for having accepted a 10% surcharge on the price of oil sales contracts concluded in 2002 and 2003 with the Iraqi State in violation of existing UN resolutions at the time. (French Court of Cassation, 10 March 2021, No 19-82.929).

On 5 May 2021, the Paris Court of Appel confirmed the possibility for a company to terminate without notice a commercial relationship because of a breach, by its co-contractor, of its ethical charter requiring the refusal of any act of bribery (Paris Court of Appeal, 5 May 2021, No 19/15680).

In a decision handed down on 16 June 2021, the criminal chamber of the French Court of cassation also confirmed the decision of the Paris Court of Appeal which had convicted a telecommunications equipment manufacturer of bribery of foreign officials to pay a fine of EUR150,000, for having paid bribes of more than 20 million dollars to Costa Rican officials and political figures between 2001 and 2004, under the cover of consultancy contracts, to obtain telephone contracts.

The Court of Cassation held that “in the case of acts committed within the framework of a group of companies of which the convicted company is the holding company, the active bribery of a foreign public official was committed, on behalf of the parent company, through the combined actions of three employees of the company's subsidiaries, de facto representatives of the latter due to the existence of the group's own cross-cutting organisation and the missions entrusted to them” (French Court of Cassation, 16 June 2021, No 20-83.098).

On 29 June 2021, the 32nd Chamber of the Paris High Court found two officers and a former general of the French Air Force guilty of favouritism and concealment of favouritism in the award of two public rental contracts of helicopters for French special forces in 2015 and 2016. The two officers were sentenced to a EUR10,000 fine. The former general, head of the company that obtained the contracts and who was allegedly aware of the Air force's needs and rating criteria before the call for tenders (appel d’offres) was published, was sentenced to an eight-month suspended prison sentence and a EUR150,000 fine. His company was fined EUR300,000 and banned from public contracts for one year. All three defendants appealed against this judgment (Paris High Court, 29 June 2021).

As regards non-trial resolutions, a CJIP was concluded on 9 February 2021 between two companies belonging to a major transport, logistics and communication group and the National Financial Prosecutor’s Office dealing with acts of bribery of foreign officials and complicity of misuse of corporate assets between 2009 and 2011 regarding communications consulting services provided by a subsidiary of the group to the presidential candidates of Togo, in exchange of concessions for container terminals in the port of Lomé. The parent company committed to pay a public interest fine of EUR12,000,000 and to submit, for two years, to the audits that will be carried out by the FAA on the existence and relevance of its anti-corruption programme, it being specified that the costs incurred will be borne by the company up to a maximum of EUR4,000,000.

On 26 February 2021, during a public hearing, the CJIP was validated by the homologating judge of the Paris High Court (Validation order of the Paris High Court, 26 February 2021, No 28/2021).

Three company’s executives appeared at the same public hearing for the homologation of their CRPCs, as individuals are excluded from the legal scope of the CJIP procedure. They admitted their guilt, acknowledged criminal qualifications and agreed to pay the maximum incurred fine of EUR375,000.

However, unlike the CJIP, the judge refused to homologate the CRPCs, considering that the alleged offences “seriously undermined public economic order” and “undermined Togo's sovereignty” (Paris High Court, 26 February 2021).

This case illustrates the difficulty of co-ordinating French negotiated justice procedures. Although Article 495-14 of the French Code of Criminal Procedure provides that parties cannot mention the CRPC that failed nor the content of the negotiation during the subsequent trial, defendants who already admitted their guilt during the CRPC procedure are in practice deprived of their right to defend their case in court, especially when the hearing was highly mediated. The lack of an effective appeal against the refusal to homologate the CRPC reinforces this self-incrimination risk.

On 12 July 2021, a CJIP was concluded between a major French transport company and the National Financial Prosecutor’s Office. In this case, investigations focused on acts of bribery of foreign public officials in Azerbaijan and Uzbekistan in return for public contracts' procurement. The company committed to pay a public interest fine of EUR7,496,000. This convention was validated on 13 July 2021 (Validation order of the Paris High Court, 12 July 2021, No 75/2021).

See Section 5 Penalties.

Key figures for the year 2020 have been published. In 2020, Transparency International ranked France 23rd next to the United States, losing two places since 2018, in its corruption perceptions index in the public sector. France was attributed a score of 69 on a scale of 0 to 100, where 0 is highly corrupt.

According to the 2020 FAA annual report, prosecutors handled 813 proceedings relating to probity offences in 2019. Finally, 332 of the prosecuted probity offences resulted in a definitive conviction.

On 16 December 2020, the Law Commission (“commission des Lois”) of the French National Assembly entrusted two Members of Parliament with a mission to evaluate the Sapin II Law, four years after its entry into force, in order to carry out an in-depth assessment of the main contributions of this law. On 7 July 2021, the information report was released.

The first part was devoted to the prevention and detection of corruption as a whole and especially to the FAA's action. The report considered that private players had appropriated the obligations issued by the Sapin II Law but that the dissemination of the system remained very limited in the public sector. Besides, they noted that the results of the extra-territorial application of these new tools, and in particular the prosecution of acts of corruption of foreign public officials by foreign companies carrying out part of their activity in France, was non-existent. They therefore suggested that the obligations of Article 17 should be imposed on subsidiaries of foreign groups established in France.

The second part concerns the CJIP procedure. In this regard, the authors are not in favour of applying this procedure to individuals because, in their view, such an extension would make it possible to exempt the perpetrators of acts of corruption, thus making corruption a separate category of offences even though they are particularly serious.

The third part was devoted to the protection of whistle-blowers on the occasion of the transposition of the Directive (EU) 2019/1937 of 23 October 2019. 

The fourth part concerned the register of interest representatives implemented by Decree No 2017-867 of 9 May 2017, which placed France among the most advanced countries in this area.

At the same time, the OECD assessment of the evolution of the French set of regulations in the fight against corruption since 2016, scheduled for the end of the year 2021, is particularly awaited.

While France must transpose Directive (EU) 2019/1937 of 23 October 2019 on the protection of whistle-blowers and the OECD is conducting an evaluation of its anti-bribery strategy, France's anti-bribery results are stagnating, the country remaining in the same position as in 2015 in the Transparency International's corruption perceptions index. The authors of the information report observe that, although the Sapin II Law has enabled France to have some of the most ambitious anti-corruption tools, such progress remains insufficient. Therefore, they highlighted improvements to be made, with 50 proposals aiming to breathe new life into the French anti-corruption arsenal. 

Their proposals revolve around the following four priorities:

  • clarify the institutional organisation of anti-corruption policy and develop compliance obligations adapted to public actors, by transferring to the High Authority for Transparency in Public Life (HATVP) the advisory and control functions currently performed by the FAA, in order to create a large independent administrative authority competent in matters of corruption, the “High Authority for Probity”;
  • promote the use of the CJIP procedure: in particular, the authors note that the recent refusal to approve a CRPC negotiated between the National Financial Prosecutor's Office and three individuals (see 7.6 Recent Landmark Investigations or Decisions Involving Bribery or Corruption) showed that, due to the watertightness between the CJIP and CRPC procedures, their simultaneous negotiation does not necessarily lead to a global and coherent settlement of the cases. Therefore, they call for improving the framework applicable to individuals involved in acts of bribery during the negotiation of a CJIP, by creating a specific CRPC procedure, which could only be proposed in the event of spontaneous disclosure of the facts and full co-operation during the investigations.

The report also calls for the extension of the scope of the CJIP procedure to favouritism acts but the authors estimate that further extension to other offences does not seem justified and would risk changing the nature of such a procedure;

  • strengthen the protection of whistle-blowers:

(a) remove the requirement of disinterestedness and clarify the requirement of good faith,

(b) make the hierarchy of information channels more flexible to allow direct referral to the public authorities and

(c) ensure that whistle-blowers are effectively informed of the follow-up to their reports;

  • improve the transparency of public decisions, by assessing at the level of the legal entity the criteria for mandatory inclusion in the register of interest representatives in order to provide citizens with a better understanding of the impact of interest representatives on the normative process.

A draft law incorporating the aforementioned proposals could be examined by the French Parliament from November 2021 onwards. This could lead to a revision of the Sapin II Law.

Bougartchev Moyne Associés AARPI

4, place Saint Thomas d’Aquin
75007 Paris
France

+33 1 42 84 87 77

+33 1 42 84 87 79

kbougartchev@bougartchev-moyne.com www.bougartchev-moyne.com
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DLA Piper LLP is one of very few international law firms with a dedicated compliance, global investigations and white-collar defence, cross-border team with several dozen lawyers who focus on this area. The Paris compliance and global investigations practice comprises one partner, a team of two legal directors and three dedicated associates. The team works closely with DLA Piper lawyers worldwide (Europe, US, Middle-East, Asia Pacific) as well as the other teams in the Paris office (M&A, competition, public affairs, intellectual property and data privacy, labour and employment, banking and finance, tax). The approach of relying on a vast network of international lawyers, in around 80 offices in 40 countries, means that the firm can provide legal assistance to its clients, regardless of their sector of activity or the geographic area in which they operate. DLA Piper always strives to offer robust, rigorous, and operational solutions while delivering quality and respecting high standards in all matters it undertakes. The entire team has quickly upgraded to use the most advanced technologies, such as forensic software to handle broad and multi-jurisdictional investigations successfully.

Anti-corruption in France

France’s stance against corruption and the wider group of offences that fall within the scope of “integrity” violations (probité in French) has been reinforced significantly over the past decade. Whilst France was sometimes seen, for example in some Organisation for Economic Co-operation and Development (OECD) reports, as a country which was not doing enough and lacked the legal instruments to investigate and prosecute such offences, major changes have occurred, particularly during the past five years, which have modernised and shaped its ambitious agenda.

The Development of a New Integrity Paradigm in France

Several regulatory authorities were created in the first half of the 2010s to monitor, investigate and sentence violations in relation to “integrity”. The laws of 11 October 2013 on transparency in public life created the High Authority for Transparency in Public Life (HATVP), from which materialised the need to provide an authority with sufficient powers to control the declaration of assets and interests of public and elected officials. It was followed by the setting-up of the Financial Prosecutor: the “Parquet National Financier” (PNF) by Law No 2013-1117 of 6 December 2013 on tax fraud and serious financial crime and organic Law No 2013-1115 of 6 December 2013 on the Financial Prosecutor. The PNF was explicitly designed to investigate and prosecute the most serious and complex economic crimes, understood as covering four categories of offences: public finances offences, integrity offences (which include corruption and influence-peddling), market abuses and violations in relation to competition laws.

A major addition to the French anti-corruption system came after the enactment of Law No 2016-1691, relating to transparency, the fight against corruption and the modernisation of economic life, on 9 December 2016 (Sapin II Law). Inspired by the legislation that already existed in the US (Foreign Corrupt Practices Act) and in the UK (UK Bribery Act 2010), the Sapin II Law built on features that existed in Anglo-Saxon anti-corruption mechanisms and adapted them to the French judicial system. For instance, the law integrated an important prevention aspect into the anti-corruption framework by requiring companies to adopt robust compliance programmes and, thus, become more proactive in the fight against corruption and influence-peddling. The creation of such compliance programmes became mandatory for companies which have at least 500 employees and a turnover that exceeds EUR100 million. Corporates that fall within the scope of the law have to:

  • design a code of conduct;
  • set up internal alert mechanisms;
  • conduct a risk-mapping system that analyses and provides a hierarchy of risks of corruption within its business sectors;
  • conduct due diligence on entities they do business with, including suppliers and intermediaries;
  • set up internal or external accounting control procedures;
  • provide training on compliance and anti-corruption topics to their personnel who may be exposed to such risks;
  • set up a disciplinary system to sanction violations of the code of ethics; and
  • create internal control mechanisms to audit the measures implemented.

Furthermore, it increased significantly the sanctions available against companies and individuals found guilty of corruption or influence-peddling and it added an extra-territorial reach to the law by integrating into its scope individuals and entities which usually reside in France or have all or part of their activity on French territory. Finally, the law borrowed aspects of the US’ negotiated justice by creating the “Convention Judiciaire d’Intérêt Public” or CJIP (Judicial convention of public interest). Drawing from the Deferred Prosecution Agreement (DPA), a CJIP differs from that mechanism in particular in that it is an instrument open to legal entities only. It was set up to encourage companies to co-operate with the authorities in exchange for a more favourable settlement. In this regard, companies may be offered the opportunity to negotiate with the prosecutor a settlement under which they accept the requirement to pay a fine, often for a very high amount, and to implement a compliance programme, while avoiding criminal charges. The proposal is then submitted to a judge who decides whether to ratify the agreement.

In addition to the previous elements, the Sapin II Law increased the protection of whistle-blowers and also created the French Anti-corruption Agency (AFA), which is in charge of preventing and detecting acts of corruption, influence-peddling, misappropriation of public funds and favouritism.

The Role of the AFA on the Evolution of the French Anti-corruption System

The AFA is responsible for controlling the concrete implementation of efficient anti-corruption measures and compliance programmes within entities that fall within the scope of the Sapin II Law. Entities subject to an AFA control receive a notification from the agency, which provides the subject and scope of the control. Several exchanges, including documentation analysis, interviews, and on-site visits, usually take place between the entity subjected to the control and the agency. The AFA then submits its report and concludes on the efficiency of the compliance programme implemented by the company. The company has two months to respond to the AFA, and to request a meeting with AFA agents if need be. Depending on the case, a warning can be issued to the entity. If the violations are really serious, the case is referred to the Sanctions Commissions of the AFA.

The AFA also has an important normative role in the French anti-corruption system. It provides recommendations and practical guides which, in addition to the Sapin II Law and application decrees, constitute the “French anti-corruption referential”. So far, the AFA has published two recommendations, the first set in December 2017 and the latest on 12 January 2021. The 2021 recommendations marked an interesting shift from the previous requirements as regards the implementation of anti-corruption programmes. The AFA adopted a three-pillar approach centred on (i) the involvement of executives and top managers in designing and implementing a corporate culture that complies with anti-corruption requirements, (ii) a risk-based approach that starts with the companies’ risk-mapping, and which leads to elaborating (iii) risk-management processes to prevent risks, detect potential misconducts, and elaborate sanctions to repress any such misconducts. These processes also include the internal control and audit mechanisms that companies must set up in order to control the anti-corruption measures that are set forth.

The publication of these documents allows companies to have more visibility on what is expected of them with regard to the measures that they should implement and the factors that will be taken into account when the AFA assesses the efficiency of their compliance programmes. It is worth noting that, whilst the agency mentions in its recommendations that these recommendations are not binding on companies that fall within the scope of the Sapin II Law, the AFA also states that entities that apply the mechanisms set out in the recommendations benefit from a presumption of compliance. If a company departs from those recommendations, the burden of proof is automatically reversed and the entity has to justify its approach and present evidence that the anti-corruption mechanisms that it implemented are compliant with the legislation. Thus, the normative power of the AFA and its ability to impose changes in anti-corruption practices cannot be understated.

The Place of Individuals in the Current Legal Framework

Several issues regarding the role of individuals in the current framework remain unanswered. For instance, as previously mentioned, the CJIP is only available to legal entities. Individuals have access to the “Comparution sur Reconnaissance Préalable de Culpabilité”, or CRPC (Convention on prior recognition of guilt), which, unlike the CJIP, requires the individual to acknowledge their guilt in order to be ratified by a judge. The articulation of CJIPs and CRPCs remains a sensitive and complex topic. In February 2021, a court ratified the CJIP concluded with a company, but refused to ratify the CRPC negotiated with several of the company’s executives.

Other areas should be clarified as well. Directive (EU) 2019/1937 of the European Parliament and of the Council on the protection of persons who report breaches of Union law was adopted on 23 October 2019. It provides a harmonised system of protection of whistle-blowers that EU Member States must transpose by 17 December 2021 for provisions in relation to the public sector and companies with more than 249 employees. Provisions regarding companies of the private sector with 50 to 249 employees must be transposed by 17 December 2023. A bill was subsequently introduced in the French Parliament which, inter alia, better defines the concept of whistle-blower (“an individual who reports or discloses, without direct financial compensation and in good faith, information relating to a crime or misdemeanour, a threat or harm to the general interest, a violation or an attempt to conceal a violation of an international agreement”) and sets out more effective reporting mechanisms.

Conclusions

Finally, the role of corporate internal investigations in uncovering and analysing facts in relation to integrity violations is an important topic that is still evolving, specifically with regard to the rights of individuals. It should thus be noted that the anti-corruption framework previously described encourages companies to co-operate with public authorities and to conduct internal investigations to shed light on potential misconducts brought to their attention. Whilst such a practice is not really new, the increase of these investigations and the fact that they have some roots in a different legal system – namely, the US – still proves challenging at times. In particular, rules regarding the admissibility of evidence must be complied with at all times – for instance, especially if an employer wants to terminate an employee following an internal investigation that uncovered compelling evidence of wrongdoing, it is of the utmost importance that all applicable employment laws and data protection laws have been fully observed during the internal investigation process. The same requirements of rigour, loyalty and proportionality must be applied, in particular when conducting interviews with employees in order to preserve the rights of defence and the presumption of innocence, among other essential legal principles in democratic societies.

DLA Piper France LLP

27 rue Laffitte
Paris
75009
France

+33 01 40 15 24 00

+33 01 40 15 24 01

Claire.Massiera@signaturelitigation.com www.dlapiper.com/fr/france/locations/paris
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Bougartchev Moyne Associés AARPI was formed in January 2017, when Kiril Bougartchev and Emmanuel Moyne joined forces to create a law firm combining all the disciplines of business litigation, and specialising in criminal law. They are supported by a team of around ten lawyers. As litigators recognised throughout their profession, the founders and their team assist public and private enterprises such as banks, financial institutions, insurance companies and their executives, as well as prominent figures in all disputes to which they are a party, whether involving white-collar crime, civil and commercial law or regulatory matters. With wide experience of emergency, complex, cross-border and multi-jurisdictional proceedings, Bougartchev Moyne Associés' lawyers assist their clients both in France and internationally, and with the benefit of privileged relations with counterpart law firms on all continents. Primary practice areas are white-collar crime, compliance, investigations, regulatory disputes, civil and commercial litigation, as well as crisis and reputational injury management.

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DLA Piper LLP is one of very few international law firms with a dedicated compliance, global investigations and white-collar defence, cross-border team with several dozen lawyers who focus on this area. The Paris compliance and global investigations practice comprises one partner, a team of two legal directors and three dedicated associates. The team works closely with DLA Piper lawyers worldwide (Europe, US, Middle-East, Asia Pacific) as well as the other teams in the Paris office (M&A, competition, public affairs, intellectual property and data privacy, labour and employment, banking and finance, tax). The approach of relying on a vast network of international lawyers, in around 80 offices in 40 countries, means that the firm can provide legal assistance to its clients, regardless of their sector of activity or the geographic area in which they operate. DLA Piper always strives to offer robust, rigorous, and operational solutions while delivering quality and respecting high standards in all matters it undertakes. The entire team has quickly upgraded to use the most advanced technologies, such as forensic software to handle broad and multi-jurisdictional investigations successfully.

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