Anti-Corruption 2018 Comparisons

Last Updated July 10, 2018

Law and Practice

Authors



Bougartchev Moyne Associés AARPI was established in January 2017 when Kiril Bougartchev and Emmanuel Moyne joined forces to create a law firm combining all the disciplines of business litigation, predominantly in criminal law. The firm is the fruit of more than 20 years of professional experience gained by the two founding partners at Gide and Linklaters, who are supported by around ten lawyers. The team assist public and private enterprises such as large corporate groups, banks and financial institutions, insurance companies and their executives in all disputes, whether involving white-collar crime, civil and commercial law or regulatory matters. With wide experience of emergency, complex, cross-border and multi-jurisdictional proceedings, the firm’s lawyers assist their clients in France and internationally with the benefit of privileged relations with counterpart law firms on all continents. Its primary practice areas are white-collar crime (bribery and related offences), crisis and reputational injury management, civil and commercial litigation, regulatory disputes, compliance and investigations.

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

Since the introduction of the offence of bribery of foreign public officials in Law No. 2000-595 of 30 June 2000, France has adopted numerous reforms to reinforce its anti-corruption legislation, both substantively and procedurally. In particular, Law No. 2007-1598 of 13 November 2007 aimed to expand the scope of criminal prosecution and was then followed by Law No. 2010-768 that facilitated asset seizure and confiscation in criminal matters.

Law No. 2013-1117 of 6 December 2013 intensified the fight against corruption, bringing about a substantial rise in the amount of possible fines and creating the National Financial Prosecutor, a specialised Public Prosecutor responsible for investigating very complex matters or ones that could have a major national or international impact.

In December 2014, although welcoming the above series of reforms, the Organisation for Economic Co-operation and Development ("OECD") still expressed concerns about the French anti-corruption arsenal in its follow-up to the Phase 3 Report on Implementing the OECD Anti-Bribery Convention, criticising “France’s limited efforts” to combat bribery in international transactions and the relatively limited number of French prosecutions and convictions on the grounds of corruption.

The 2016 reform took such criticism into account and strove to make further progress in detecting and punishing corruption, so as to reach the highest European and international standards. Law No. 2016-1691, called the Sapin II Law, was signed on 9 December 2016 and came into force on 11 December 2016 with regard to most of its provisions.

The first notable change resulting from this reform is the introduction of a new duty to prevent bribery or influence-peddling for chairmen, chief executives and managers of companies (or industrial and commercial public establishments) with at least 500 employees, or belonging to a group whose parent company’s headquarters are located in France and having at least 500 employees, and with a turnover or a consolidated turnover above EUR100 million. Such a duty consists in setting up a comprehensive compliance program to prevent and detect acts of bribery or influence-peddling in France or abroad.

Compliance measures, which had to be implemented by 1 June 2017, include: (i) the adoption of a code of conduct, (ii) an internal warning system, (iii) a regularly updated risk mapping where risks of external solicitations would be outlined according to the line of business and the geographic area concerned, (iv) assessment procedures evaluating clients, suppliers and intermediaries based on the risk mapping, (v) accounting controls to spot any act of bribery or influence-peddling, (vi) training sessions for risk-exposed personnel, (vii) a disciplinary policy and (viii) an internal monitoring scheme for all measures implemented.

The Sapin II Law also provides for the creation of the French Anti-corruption Agency (“FAA”),  a dedicated authority that will monitor the quality and efficiency of compliance measures implemented within the companies and public entities concerned. The FAA will be entitled to send warnings to non-compliant company representatives and to refer cases to its Sanctions Commission in order that injunctions or fines (up to EUR200,000 for individuals and EUR1 million for legal entities) be imposed. The FAA has been granted other powers, such as issuing recommendations to public institutions and companies on how to prevent and detect acts of corruption (bribery, influence-peddling, misappropriation or embezzlement of public funds, unlawful taking of interest and favouritism),  informing the Public Prosecutor about any such acts that it might become aware of, or supervising the execution of the new penalty or the judicial convention mentioned below. To that end, FAA agents will be entitled to require the production of any business document, or any helpful information, and to keep a copy thereof.

The third change brought about by the Sapin II Law is the introduction of new offences and penalties in the Penal Code. A new ancillary penalty, laid down in Article 131-39-2 of the Penal Code, can be imposed by judges on legal entities convicted for bribery or influence-peddling. This penalty would oblige the convicted entity to implement a compliance program for up to five years, in line with the measures mentioned above and under supervision of the FAA. Should this penalty not be implemented, Article 434-43-1 of the Penal Code provides that individuals shall be punishable by up to two years of imprisonment and a EUR50,000 maximum fine, while for legal entities the maximum fine is EUR250,000 or the same fine amount as the one imposed for the primary offences. Ancillary posting and publication penalties are also possible. In addition, the Sapin II Law provides for the creation of a new offence, influence-peddling of public officials in a foreign country, thereby putting an end to an anomaly since only bribery had been criminalised so far in connection with foreign public officials (Articles 435-2 and 435-4 of the Penal Code).

Aside from offences and penalties, the Sapin II Law extends the French judges’ jurisdiction over acts of bribery and influence-peddling committed abroad by removing the two usual criteria governing proceedings against French citizens for acts committed outside French territory. Generally, criminal proceedings are only admissible when the act concerned is also viewed as unlawful in the foreign country (Article 113-6 of the Penal Code) and when they are initiated by the Public Prosecutor (Article 113-8 of the Penal Code). In the case of bribery and influence-peddling, these criteria no longer apply (new Articles 435-6-2 and 435-11-2 of the Penal Code).

The Sapin II Law also provides for a new alternative dispute resolution mechanism that was inspired by the US deferred prosecution agreement (“DPA”) and that is solely available for legal entities suspected of acts of bribery or influence-peddling (and also laundering of tax fraud proceeds and related offences). Called the “public interest judicial convention” (convention judiciaire d’intérêt public), this new settlement procedure is an option made available to the Public Prosecutor before the initiation of criminal proceedings and to the Investigating Magistrate before the closing of his investigation, at the request of or in agreement with the Public Prosecutor. The accused legal entity is then offered to enter into an agreement with (i) the obligation to pay a 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 fine over a maximum of one year, and/or (ii) the obligation to set up a compliance programme for three years under the FAA’s supervision, in line with the measures described above. 

Finally, the Sapin II Law offers protection to whistleblowers, who under certain conditions will benefit from immunity against retaliatory measures by their employer and against criminal prosecution for secrecy violations (except with regard to secrets that concern national defence, medical confidentiality and lawyer-client privilege). Any person obstructing the escalation of alerts by whistleblowers shall be punishable by up to one year of imprisonment and a EUR15,000 fine. 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 and guarantee their strict anonymity throughout the process.

Guidelines on the interpretation and enforcement of the legislation

As regards procedural aspects, the circular of 31 January 2014 provides additional detail on the objective and the scope of the jurisdiction of the National Financial Prosecutor, including its interplay with Public Prosecutors acting locally before High Courts (Tribunaux de Grande Instance) and Public Prosecutors acting at a regional level (Juridictions Inter-régionales Spécialisées). 

As to substantial provisions, the French Central Service for Corruption Prevention (Service Central de Prévention de la Corruption, “SCPC”) issued guidelines in March 2015 for French companies to help them in setting up compliance programs. A number of major risks were identified, including gifts, accommodations or entertainment, customer travel, donations, sponsorships and facilitation payments. These guidelines are expected to receive an update as the FAA takes the place of the SCPC. 

International conventions

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 on 26 May 1997 and ratified by Law No.99-423 of 27 May 1999);
  • the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (signed by France on 17 December 1997 and ratified by Law No.99-424 of 27 May 1999);
  • the Council of Europe criminal and civil law conventions on corruption of 27 January 1999 and 4 November 1999, respectively (ratified by France by Law of 1 August 2008);
  • the additional protocol to the Council of Europe criminal law convention on international corruption (signed on 15 May 2003 and ratified by Law No. 2007-1154 of 1 August 2007);
  • the United Nations Convention against Corruption (signed by France on 31 October 2003 and ratified by Law No. 2005-743 of 4 July 2005).

Under French criminal law, the prosecution of bribery (corruption in French) revolves around the status of the person bribed so that a specific offence exists for each type of person. The French legislator has thus 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.

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

The scope of the bribe is very extensive under French law, covering all kinds of advantages without consideration of their magnitude. Pursuant to the SCPC’s recommendations, risk of bribery is posed by accommodation, entertainment, customer travel, donations, sponsorships and facilitation payments. According to the case law, bribes may consist of a non-cash benefit (eg, a car) or a service (eg, a fine wines-tasting session or a safari).

In each situation, a distinction is made under French law 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 listed above) 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 such person has performed or refrained from performing, any act pertaining to his position, duties, mandate or activities, or facilitated thereby, or (ii) accepting the proposal of such person who unlawfully requests, at any time, directly or indirectly, such advantages in exchange for such 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 own behalf or on behalf of a third party, to perform or refrain from performing, or because such person has performed or refrained from performing, any act pertaining to his position, duties, mandate or activities, or facilitated thereby. The mere receipt of a bribe thus constitutes an offence in itself.

Bribery is not only punishable when the bribe-taker is a public or judicial official but also 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).

Corruption practices punished by law have an extensive scope. In practice, corruption may lead to accounting stratagems seeking to conceal in financial statements the benefits obtained or paid by using false invoices. For this reason, it is also an offence for the chairman, directors, members of the executive or supervisory board, or de jure or de factomanagers 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 of the Commercial Code regarding the managers of Sociétés à responsabilité limitée or SARL, Article L.242-6-2 of the Commercial Code regarding the chairman, directors and general managers of Sociétés anonymes or SA); legal entities may incur a fine of up to EUR1,875,000. Furthermore, since the Court of Cassation’s Carpaye ruling of 1992 and Carignon ruling of 1997, the French courts regularly hold that the use by a company chairman, director, member of the board, or de jure or de factomanager of corporate funds only aimed at the commission of an offence such as bribery is necessarily contrary to the corporate interest and constitutes a punishable misuse of corporate assets under Articles L.241-3-4 and L.242-6-3 of the Commercial Code (Court of Cassation, Crim. Ch., 22 September 2004, No. 03-81.282; Court of Cassation, Crim. Ch., 15 December 2004, No. 03-83.474).

Corruption entails far more scenarios than the sole unlawful relationship between two persons – ie, one bribe-giver and one bribe-taker – and prosecution may affect other parties with 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 such 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). For example, an intermediary who had deposited cheques into his own bank account on behalf of a mayor who had accepted bribes was convicted for aiding and abetting bribery (Court of Cassation, Crim. Ch., 20 May 2009, No. 08-87.354).

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.

Under French law, corruption offences are often grouped together under the terms “offences to probity” (manquements à la probité) (eg, Chapter 1 of the aforementioned law of 6 December 2013 and Title I of the Sapin II Law).

However, the exact scope of this category of offences remains quite unclear. In the Penal Code, while some corruption offences and/or offences to probity are grouped within one dedicated section (Des manquements au devoir de probité, Articles 432-10 to 432-16), others are rather spread over different sections according to other criteria, such as “breaches of State authority” or “breaches of public trust”.

The Sapin II Law provides clarity in this regard by delineating the boundaries of the new FAA’s jurisdiction (Articles 1 and 3 of the Sapin II Law). Aside from active and passive bribery (corruption active et passive), the FAA will help to prevent and detect the following other corruption offences and/or offences to probity: 

  • Influence-peddling (trafic d’influence), which occurs when any person (whether 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 (new 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).
  • Misappropriation of public funds (concussion), which occurs when a public official receives, requests or orders to pay as public duties, contributions, taxes or impositions, any sum known not be due, or known to exceed what is due, or when he grants any exoneration or exemption in breach of statutory or regulatory rules (Article 432-10 of the Penal Code).
  • Unlawful taking of interest (prise illégale d’intérêts), which occurs when a public official takes, receives or keeps any interest in an operation or in a transaction, either directly or indirectly, while having the duty of ensuring its supervision, administration, liquidation or payment (Article 432-12 of the Penal Code). 
  • Embezzlement of public funds (détournement de fonds publics), which occurs when a public official/accountant destroys, fraudulently divests or acquires a document or security, public or private sums or any other object entrusted to him by reason of his position or his duties (Article 432-15 of the Penal Code).
  • Favouritism (favoritisme), which occurs when a public official grants an unjustified advantage to a third person, acting thereby in breach of the rules ensuring free access and equality of bidders for procurement contracts and concession contracts (Article 432-14 of the Penal Code).

Under French criminal law, an offence is comprised of: (i) a physical element, which concerns the prohibited act itself, (ii) a mental element, which generally consists of a general intent (dol général), requiring that the perpetrator of the offence be aware that he is acting in violation of the law and possess the will to commit that act, and a special intent (dol special), which requires an intent to pursue a specific goal, and, in certain cases, (iii) a “prior condition” (ie, a necessary prerequisite to commit the offence).

In corruption matters, the offence is established when:

  • A physical element is found. Concerning active bribery specifically, the physical element may consist in the unilateral offering of a corruption pact by the bribe-giver (regardless of any subsequent acceptance) or in his acceptance of the bribe-taker’s solicitation, thereby sealing the corruption pact. Concerning passive bribery, the physical element may consist in the bribe-taker’s request for advantages, regardless of any subsequent acceptance, (ie, unilateral offering to enter into a corruption pact), or in his consent to the bribe-giver’s offer, thereby sealing the corruption pact. Evidencing the corruption pact or the sole unilateral offering of a corruption pact is difficult due to their secrecy. Therefore, investigators and judges, who generally rely upon a “bundle of indicators” method, carefully scrutinise the concrete existence of any reward following the corruption pact.
  • A mental element is established. In bribery matters, it can be deduced from the unlawful nature of the advantage granted or received and the existence of necessarily intentional acts such as requests, proposals, agreements or acceptance (general intent), as well as from the objective to be achieved through the unlawful behaviour – ie, obtaining a monetary or non-cash advantage for the bribe-taker and obtaining the benefit of performance or non-performance of an act for the bribe-giver (special intent). (See also 1.2 Bribery above.)
  • As a prerequisite, the status of the persons involved in the perpetration of the offence falls within the scope of the provision at issue. In particular, bribery offences are conditional upon the position of the person bribed (public official, judicial official, private individual, foreign or international public official, foreign or international judicial official).

While the mere fact of proposing or accepting an unlawful advantage may qualify as an offence, without any requirement that the results expected by the perpetrators actually occur, the recent Sapin II Law has gone a step further. In entities of a certain size (see 1.1 Legal Framework for Offences above), the mere fact that directors or managers did not take the required measures to prevent acts of corruption will now constitute a punishable behaviour.

Until very recently, the limitation period expired three years after the day on which the offence was committed. The recent Law No. 2017-242 of 27 February 2017 brings about the doubling of this limitation period. As a consequence, as of 1 March 2017, the limitation period of corruption acts is increased from three years to six years following the day of commission (Article 8 of the Code of Criminal Procedure).

In principle, as regards bribery, the limitation period will thus expire six years after the date of the request or acceptance (in cases of passive bribery), and six years after the proposal or agreement (in cases of active bribery). However, the Criminal Chamber of the Court of Cassation has ruled that if any different act is performed after this date pursuant to the corruption pact, the period is tolled and begins to run anew from the date of that act (Court of Cassation, Crim. Ch., 27 October 1997, No. 96-83698). As a result, every time the corruption pact is performed over time, the six-year limitation period only starts running as from the last of the fraudulent acts committed.

In addition, the starting point of the limitation period is also delayed for occult (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). In this regard, the legislative proposal adopted on 16 February 2017 enshrined in legislation the ruling of the Court of Cassation, inspired by the principle that limitation periods shall not run against those who are not in a position to take action (contra non valentem agere non currit praescriptio). Yet, fearing the risk of imprescriptibility of offences, the French legislator specified that prosecution against offences such as bribery would in any event be time-barred 12 full years following the day on which the offence was committed.

The legislative proposal adopted on 16 February 2017 also provides a list of procedural acts having the effect of interrupting the limitation period: prosecution acts initiated by the Public Prosecutor or the plaintiff, investigation acts performed by the Public Prosecutor, the judicial police or the Investigating Magistrate/Chamber with a view to seeking and prosecuting the perpetrator of the offence, or any valid judgement (Article 9-2 of the Code of Criminal Procedure).

Geographical reach of the legislation

As a general rule, the perpetrator of an offence can be subject to criminal prosecution in France when: (i) the offence or any of its constituent element is committed in French territory, (ii) the victim is French, (iii) the perpetrator is French and a similar offence exists in the country in which it is committed, (iv) jurisdiction is granted to French courts by an international convention to which France is a party.

With regard to bribery and influence-peddling specifically, condition (iii) was considerably softened by the Sapin II Law. The dual criminality requirement (Article 113-6 of the Penal Code) was abolished. Furthermore, the Sapin II Law abandoned the requirement of Article 113-8 of the Penal Code according to which the prosecution of acts committed abroad could only result from the Public Prosecutor following a complaint lodged by the victim (or any rightful claimant) or an official denunciation from the country concerned. As a consequence, any French person having 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, based on principles relating to the connection between cases or their indivisibility (Articles 203 and 382 of the Code of Criminal Procedure), foreign individuals or legal entities having committed unlawful acts outside France can still fall within the jurisdiction of French courts when they are co-perpetrators, accomplices or launderers of an offence that French courts may hear, or when they engaged in its concealment. French courts still have jurisdiction over an indicted foreigner who did not commit any unlawful act in French territory, as long as his acts had inextricable links with acts committed by other indicted persons in France (Court of Cassation, 20 September 2016, No. 16-84026).

Information on liability

Legal entities may be criminally liable in the same way as individuals for all criminal offences, including corruption ones, it being specified that under French law legal entities are only accountable for offences committed on their behalf by their corporate bodies or representatives (Article 121-2 of the Penal Code). Therefore, in order to hold the legal entity liable for corruption offences, prosecutors first have to establish the material existence of the offence committed by an individual and then to demonstrate that the perpetrator was a body or representative of the legal entity.

That said, 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, so that the annulment of one prosecution would not affect the other one.

Legal entities may also be ordered by the criminal judge to pay compensation for loss or damage arising due to acts of corruption pursuant to Article 1242 paragraph 5 of the Civil Code (formerly Article 1384). In particular, they may face the claims of approved anti-corruption associations (Transparency International France, Anticor and Sherpa so far), which are entitled to become and act as a civil party in any criminal proceedings relating to bribery, influence-peddling, misappropriation of public funds, unlawful taking of interest, favouritism, embezzlement of public funds, concealment and laundering of these offences as well as vote buying (Article 2-23 of the Code of Criminal Procedure).

In general, French criminal law provides for a number of grounds for the exclusion or mitigation of criminal liability, such as mental disorder (Article 122-1 of the Penal Code), physical or moral coercion (Article 122-2 of the Penal Code), legal or factual error (Article 122-3 of the Penal Code), the order of the law or the command of a legitimate authority (Article 122-4 of the Penal Code), state of necessity (Article 122-7 of the Penal Code), minority (Article 122-8 of the Penal Code). Most of these grounds are rather exceptionally applied and we are not aware of any recent and relevant illustration in relation to corruption.

The French anti-corruption law does not provide for any specific defence. For example, having set up a very comprehensive compliance program internally that would go beyond legal requirements does not prevent the company from any prosecution or conviction for bribery.

Nevertheless, even when the perpetrator cannot escape prosecution and conviction, he may be exempted from penalties provided that his 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 such exemption or not.

As explained above, 2.1 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, if the amounts at issue are small, it may be considered to be a mitigating factor by a court when it determines the quantum of the penalty to be imposed.

In France, no sector (even the most sensitive) is ruled out from the scope of corruption.

A few mitigating measures and programs may be applied to persons who engaged in corruption and show to the French judicial authorities their willingness to acknowledge or amend their behaviour.

Co-operation with investigators

Under French law, there is no special treatment of perpetrators of offences who cooperate with investigators and prosecutors. However, the cooperation of the accused during the investigation stage and throughout the proceedings and, in the case of legal entities, the adoption of measures intended to reinforce internal anti-corruption systems, may be considered to be mitigating factors by a court when it determines the quantum of the penalty to be imposed.

Self-reporting

The law of 6 December 2013 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 (Penal Code, Articles 432-11-1, 433-2-1, 434-9-2, 435-6-1 and 435-11-1). At this time, customs officials have a much greater incentive to act as informants because the law exempts them from the penalties, fines and confiscations prescribed by the Penal Code if they report the acts of corruption that they have committed (Customs Code, Article 59).

Leniency

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

In a decision handed down on 15 December 2015, the Court of Cassation held in the 'ill-gotten gains' case that the immunity from jurisdiction that a foreign head of state may have cannot be validly asserted in a case involving an offence that he committed for personal purposes before he took office (Court of Cassation, Crim. Ch., 15 December 2015, No. 15-83.156).

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 ‘appearance pursuant to a prior admission of guilt’ procedure (comparution sur reconnaissance préalable de culpabilité, “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 lawyer, one or more penalties to a person who acknowledges the acts of which he is accused (Code of Criminal Procedure, Article 495-7). If the accused accepts the penalty(ies) proposed, such penalty(ies) still have to be approved by the presiding judge of the High Court. The court judgment approving the penalty(ies) is deemed a conviction. As explained below, the CRPC should be distinguished from the judicial convention introduced by the Sapin II Law.

Settlement

Having again drawn inspiration from a US procedural tool – ie, the DPA – the Sapin II Law introduced the “public interest judicial convention” (convention judiciaire d’intérêt public), a new settlement procedure available for legal entities (Article 41-1-2 of the Code of Criminal Procedure). The main benefit associated with this procedure is the absence of any acknowledgement of guilt, compared to the CRPC procedure where such acknowledgement could lead to an exclusion from public procurement (Article 45 of Order No. 2015-899 of 23 July 2015).

Under this new procedure, the Public Prosecutor and the Investigating Magistrate (Article 180-2 of the Code of Criminal Procedure) are both 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 to enter into an agreement with (i) the obligation to pay a 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 program for three years under the FAA’s supervision.

Bribery of domestic officials

In theory, bribery is severely punished under French law.

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, the maximum penalty for misdemeanours (délits), 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).

Ancillary penalties may also be imposed on such persons. For instance, they may be prohibited from holding public office or 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 they may be barred from France if the offence was committed by a foreigner. This offence is also punishable by a prohibition against exercising a commercial or industrial profession, or 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, such as the temporary exclusion from public procurement, the temporary closure of one or several establishments concerned by the offence and the confiscation of items used for the commission of the offence (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).

In practice, an increasing number of elected officials have been sanctioned. For example, on 19 August 2013, the mayor of a French town was convicted of embezzlement of public funds, favouritism, forgery and passive bribery of a public official, and sentenced to a four-year term of imprisonment, one year of which was suspended, a fine of EUR50,000, as well as being barred from holding office for five years. This conviction became final after the defendant abandoned his appeal. Similarly, in October 2013, the former mayor of a town was sentenced to a four-year term of imprisonment, two years of which were suspended, and a fine of EUR30,000 for passive bribery and breach of trust. He died before the Court of Appeal was able to hear his case (see www.transparency-france.org).

Bribery of foreign officials

It is the intent of the French legislator to punish bribery of foreign public officials as severely as bribery of domestic public officials. Moreover, the required elements of these two offences are nearly identical. Active or passive bribery of foreign public officials is thus punishable by an imprisonment of up to ten years and a fine of up to EUR1 million, which may be increased to double the proceeds generated by the offence (Articles 435-3 and 435-1 of the Penal Code). Active bribery of foreign public officials committed by a legal entity is subject to a fine of EUR5 million, which may be increased to double the proceeds generated by the offence (Article 435-15 of the Penal Code). Ancillary penalties are also provided (Articles 435-14 and 435-15 of the Penal Code).

The penalties provided for active bribery of foreign or international judicial staff are the same as for bribery of foreign public officials (Articles 435-9, 435-7 and 435-15 of the Penal Code). 

However, in practice, few of the convictions handed down in corruption cases were on the grounds of bribery of foreign public officials. The follow-up to the phase 3 report for France, which was published in 2014, shows that since the OECD Convention came into force, only 58 procedures have been initiated for bribery of foreign public officials, of which 24 new procedures were initiated since the publication of the phase 3 report in 2012. It also shows that between 2012 and 2014, only three individuals were convicted, resulting in fines ranging from EUR5,000 to EUR20,000, and that 11 new cases concerning legal entities had been closed with no further action or dismissed, or had ended in discharge.

In an important case involving bribery of foreign public officials in which the trial court had held a legal entity liable to pay a fine of EUR500,000, the Court of Appeal acquitted the legal entity on the grounds that no evidence showed that the company had risked losing the contract and that, therefore, there was insufficient proof that the payments were intended as a bribe (Paris Court of Appeal, 7 January 2015, No.12/08695, which has become final).

Lastly, in a recent judgment that is currently on appeal, the 32nd Criminal Chamber of the Paris High Court convicted an individual, a corporate executive, of active bribery of foreign public officials, tax fraud and laundering tax fraud proceeds, gave him a 30-month suspended prison sentence and ordered him to pay a fine of EUR1.5 million. He had been charged with bribing a minister of a foreign country in order to have an oil exploration permit renewed (Paris High Court, 32nd Criminal Chamber, 3 December 2015, appeal pending).

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

As for bribery, similar penalties are provided for influence-peddling.

In case of influence-peddling involving as decision-maker 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 foreign/international official (Articles 435-4, 435-2, 435-8 and 435-10 of the Penal Code), individuals are liable for a term of imprisonment of up to five years and a fine of EUR500,000 – which may be increased to double the proceeds generated by the offence – as well as various ancillary penalties. 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 various ancillary penalties (Articles 433-25 and 435-15 of the Penal Code). 

Influence-peddling where the beneficiary of the offence is a public official and the decision-maker is a domestic authority or public administration is more severely punished. Individuals are liable for a term of imprisonment of up to ten years and a fine of EUR1 million – which may be increased to double the proceeds generated by the offence (Articles 433-1 and 432-11-2° of the Penal Code). Legal entities are liable for a fine of EUR2.5 million – which may be increased to double the proceeds generated by the offence (Article 433-25 of the Penal Code).

In practice, in a decision dated 30 June 2015 that has become final, a former European elected official was convicted of active influence-peddling for having interceded with the vice-president of a region in order to enable the manager of a construction company to obtain authorisation to operate an asbestos removal site. The company manager was convicted of passive influence-peddling and sentenced to two years of imprisonment to be served under electronic supervision, while the other defendant was sentenced to a six-month suspended prison sentence and a fine of EUR50,000 (Aix-en-Provence Court of Appeal, 30 June 2015, No. 2015/268, appeal before the Court of Cassation declared inadmissible).

Other corruption offences

  • Individuals engaging in embezzlement of public funds (Article 432-15 of the Penal Code) are liable for a term of imprisonment of up to ten years and a fine of EUR1 million – which may be increased to double the proceeds generated by the offence.
  • Individuals engaging in misappropriation of public funds (Article 432-10 of the Penal Code) or unlawful taking of interest (Article 432-12 of the Penal Code) are liable for a term of imprisonment of up to five years and a fine of EUR500,000 – which may be increased to double the proceeds generated by the offence.
  • Individuals engaging in favouritism (Article 432-14 of the Penal Code) are liable for a term of imprisonment of up to two years and a fine of EUR200,000 – which may be increased to double the proceeds generated by the offence.
  • Ancillary penalties are provided for under Article 432-17 of the Penal Code. It should be noted that, following the Sapin II Law, any person found guilty of one of the above offences shall be excluded from eligibility for election, except when the judge decides otherwise in a well-grounded judgement in light of the context of the offence or the background of the perpetrator.
  • Legal entities engaging in one of the above offences are liable for a fine of five times the amount laid down in the Penal Code for individuals (Article 131-38 of the Penal Code) – which may be increased to double the proceeds generated by the offence – as well as various ancillary penalties.

Repeated offences

In the event of a repeated offence, the maximum penalties (imprisonment and fine) incurred are doubled. As regards individuals, this is the case when: (i) the perpetrator of acts of corruption punishable by an imprisonment of ten years had been convicted in the past for felony or any misdemeanour punishable by an imprisonment of ten years and a period of less than ten years has elapsed between the expiration or prescription date of the first penalty and the date of commission of the new offence (Article 132-9 §1 of the Penal Code); (ii) the perpetrator of acts of corruption punishable by an imprisonment of more than one year and less than ten years had been convicted in the past for felony or any misdemeanour punishable by an imprisonment of ten years and a period of less than five years has elapsed between the expiration or prescription date of the first penalty and the date of commission of the new offence (Article 132-9 §2 of the Penal Code); (iii) 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 expiration 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 felony or misdemeanour before the commission of acts of bribery (Articles 132-13 and 132-14 of the Penal Code).

Conclusion

As seen above, the French parliament has provided stiff penalties for acts of corruption. However, the dissuasive effect of these penalties is attenuated by the low number of prosecutions and convictions, and by the fact that the penalties actually imposed in the event of a conviction are significantly lower than the statutory maximums.

The 2015 report of the SCPC shows that, in 2014, there were 44 convictions for passive bribery and 83 for active bribery. Among 241 convictions for offences to probity, 64% imposed a fine, with an average amount of EUR8,246, and 77% imposed a prison sentence. Only 21% of all prison sentences were wholly or in part non-suspended sentences, with an average duration of 13.5 months. 

In any event, judgments issued in 2016 and early 2017 in cases involving breaches of the duty of probity suggest that the courts will be increasingly severe in the future, with more and more recourse to non-suspended prison sentences for economic and financial crimes. For example, former director of Lyon’s judicial police was convicted of bribery and influence-peddling and sentenced to 2.5 years of imprisonment  while the main bribe-giver was sentenced to five years of imprisonment and a fine of EUR100,000 (Paris High Court, 5 July 2016). A former minister of home affairs had his conviction for complicity of embezzlement of public funds upheld in appeal and was sentenced to two years of imprisonment, with one non-suspended (Paris Court of appeal, 23 January 2017), which constitutes an aggravated sentence compared to the fully suspended two-year sentence issued at first instance, with the additional penalties of a EUR75,000 fine and a five-year ban on holding public office. A former minister of the budget was convicted for tax fraud and laundering of tax fraud proceeds and sentenced to three years of imprisonment (Paris High Court, 32nd Criminal Chamber, 8 December 2016, appeal pending).

In that last case, the National Financial Prosecutor, Mrs Eliane Houlette, alleged during the hearing that it was key not to treat white-collar criminals differently from ordinary criminals since it would otherwise strengthen the sense of exclusion perceived in part of the population and convey the idea that powerful figures remain unpunished. This speech tends to sum up the stringent prosecution policy of the National Financial Prosecutor, which led them to call for ten-year prison sentences in the VAT swindling case heard by the Paris High Court in June 2016. The two main accused were eventually sentenced to eight years of imprisonment and a fine of EUR1 million  (Paris High Court, 32nd criminal chamber, 7 July 2016, upheld in appeal).

The discretion of judges to determine penalties is one of the fundamental principles of the French criminal law. The judge has full discretion to choose, from among the penalties applicable to the offence, those he deems appropriate in light of the nature of the acts and the individual background of the defendant. Accordingly, the judge may impose only one of the possible penalties. The judge also has significant discretion to determine the quantum of the penalty, with the only restriction being the maximum prescribed by law (the law does not provide for minimum sentences).

However, the judge must in all cases explain the grounds for his decision if he imposes a prison sentence that is not suspended and provides for no adjustments to the penalty, which partly explains the still relatively low number of non-suspended prison sentences handed down to date in corruption cases.

Furthermore, a basic principle of the French law is that sentences are not consecutive, which means that if several penalties of the same type are possible because more than one offence has been committed, only one penalty of such type may be imposed, up to the highest statutory maximum penalty.

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.

Since the aforementioned law of 6 December 2013, reporting felonies and misdemeanours committed in the civil service is not only a duty, but also a right. The protective system created (and strengthened by the Sapin II Law, as set out below) provides that no measure concerning inter alia recruitment, tenure, training, evaluation, discipline, promotion, assignment or transfers may be taken against any civil servant because he has in good faith reported or testified about acts that are the constituent elements of a felony or misdemeanour of which he becomes aware in the performance of his duties. Any contrary provision or act is automatically null and void (Article 6 terA of Law No. 83-634 of 13 July 1983, the “Le Pors Law”, as amended by Law No. 2013-1117 of 6 December 2013 and by the Sapin II Law).

In the private sector, statutory auditors are required, under criminal penalties if they do not (Article L.820-7 of the Commercial Code), to report to the Public Prosecutor criminal acts of which they become aware, and incur no criminal liability for doing so, including on the grounds of making malicious accusations (Article L.823-12 of the Commercial Code). They are also required to report to Tracfin 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 aforementioned law of 13 November 2007 added a provision to the French Employment Code that prohibits any person from being denied employment or disadvantaged for having reported acts of bribery of which he becomes aware in the performance of his duties (formerly Article L.1161-1 of the Employment Code). This provision, made unnecessary by other subsequent provisions, was repealed by the Sapin II Law.

The aforementioned law of 6 December 2013 indeed provided stronger protection for whistleblowers by extending the protective mechanism regarding bribery to all felonies and misdemeanours that a person reports and of which he becomes aware in the performance of his duties. Such report may be made to any person, including the press (Article L.1132-3-3 of the Employment Code).

The Sapin II Law of 2016 goes a step further in granting protection to whistleblowers. Under this new system, whistleblowers will 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), except with regard to secrets that concern national defence, medical confidentiality and lawyer-client privilege (Article 6 of the Sapin II Law).

So as to be eligible for immunity, the person reporting an unlawful act needs to:

  • match with the definition of the whistleblower 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”;
  • 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 whistleblower to make the alert publicly available.

As an exception, the first step of the process (ie, the notification to the hierarchy) can be bypassed in case of serious and imminent danger or risk of irreversible damage (Article 8 of the Sapin II Law). This might cover the situation where the company is likely to take all measures to cover up the matter and to eliminate the evidence thereof before it becomes public. When in doubt, the whistleblower can seek advice from the national ombudsman (Défenseur des droits), who will direct him towards the relevant contact point (Article 8 IV).

Moreover, obstruction to whistleblowers’ action now constitutes an offence: any person obstructing the escalation of alerts by whistleblowers shall be punishable by one year of imprisonment and a EUR15,000 fine. Defamation complaints against whistleblowers 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 whistleblower 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).

As set out above, whistleblowers are subject to a sophisticated set of protective measures against dismissal, obstruction, identity disclosure and criminal prosecution for breach of secrecy, which can be viewed as sufficient incentives to report misdemeanours. Other types of incentives, such as financial rewards, do not apply; a whistleblower is offered protection provided that his action occurs “selflessly” (Article 6 of the Sapin II Law).

The main legal provisions relating to whistleblowing are found in the Sapin II Law and have not been codified so far.

Specific protection rules applying to private employees are laid down in the Employment Code (Article L.1132-3-3) while the relevant provisions for civil servants are enshrined in the Le Pors Law (Article 6 ter A of Law No. 83-634).

Other criminal law provisions encourage whistleblowing in the public sector (Article 40 of the Code of Criminal Procedure) and discourage any prosecution for breach of secrecy against whistleblowers (Article 122-9 of the Penal Code).

In French criminal law, as a general rule, the powers to prosecute and convict perpetrators of acts of corruption belong to judicial authorities and are not granted to administrative bodies (with the exception of the newly created FAA, which received such powers in relation to compliance obligations).

The Public Prosecutor’s office is the key to prosecution as it is empowered to decide whether it is appropriate to institute proceedings, although civil claimants may also initiate prosecution. The local Public Prosecutor at every ordinary High Court (Tribunal de grande instance), as well as the Investigating Magistrate and the Criminal Chamber of the High Court when the Public Prosecutor brings cases before them, have jurisdiction to handle corruption cases.

However, this general jurisdiction is shared with specific administrative authorities, prosecutorial agencies and specialised courts. On 1 February 2014, a National Financial Prosecutor, specialised in economic and financial matters, and more specifically in corruption and tax fraud matters, was added to the judicial system.

The circular of 31 January 2014 gives a clearer picture of the objective to be achieved – ie, to grant a specialised prosecutorial body jurisdiction over the matters that are the most complex or “likely to generate significant national or international impact”.

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 the specific powers attributed to the National Financial Prosecutor, prosecutors at eight Inter-regional Specialised Courts 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.

These various prosecutorial bodies are assisted by a new specialised investigative service, the Central Office for Fight Against Corruption and Financial and Tax Offences (Office Central de Lutte contre la Corruption et les Infractions Financières et Fiscales, “OCLCIFF”), which was created in October 2013. OCLCIFF has significant resources and specialised officers to act in matters involving offences to probity, tax fraud and, more broadly, financial offences, either on its own initiative or pursuant to a request for judicial assistance (commission rogatoire). In addition, this unit may assist the National Police or National Gendarmerie in their investigations. It is also tasked with leading and coordinating, at the national and operational levels, police investigations in criminal matters and enquiries within its remit. Lastly, it is in a position to continue its investigations abroad, and its relations with foreign authorities are facilitated by the fact that it is “the central point of contact in international exchanges”.

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 the aforementioned law of 9 July 2010. AGRASC’s duties include recovering assets seized in the course of criminal proceedings and conducting pre-judgment sales of confiscated assets when they are no longer needed as evidence or if they may lose value. For example, in the ‘ill-gotten gains’ case, AGRASC auctioned nine luxury cars owned by the son of the President of Equatorial Guinea, which had been seized during the proceedings, for an amount of EUR2.8 million.

Tracfin, the agency charged with dealing with and taking action against illegal financial circuits, is the sole centre for collecting suspicions reported by the regulated professions subject to the anti-money laundering measures. In that capacity, 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, which was created by the laws of 11 October 2013 on transparency in public life, and the Public Finance General Directorate, play a fundamental role in detecting offences, in particular corruption offences. They deal with the office of the Public Prosecutor, which gives instructions to the enquiry services and ensures they co-operate fully.

Until recently, corruption offences might be prosecuted before the criminal courts only. No administrative authority was empowered to impose civil penalties, as the US Securities and Exchange Commission (SEC) may do. The Sapin II Law brought about the creation of the FAA, whose duties are to verify that certain legal entities (as set out above) implement programs to prevent and detect acts of corruption. The FAA is empowered to prosecute and punish legal entities (the proposed fine is EUR1 million) and individuals (punishable by fines of up to EUR200,000) who infringe the prevention and detection obligations prescribed by the law.

Some soft law is available to explain the functioning of prosecution bodies and administrative agencies. For example, as regards the National Financial Prosecutor, the circular of 31 January 2014 gives a clearer picture of the objective to be achieved – ie, to grant a specialised prosecutorial body jurisdiction over the matters that are the most complex or “likely to generate significant national or international impact”.

The National Financial Prosecutor – and consequently the Investigating Magistrates of the financial division of the Paris High Court – were granted inter alia (i) exclusive jurisdiction to investigate and prosecute stock market offences, (ii) concurrent jurisdiction with the ordinary High Courts over the offence of bribery of foreign public officials, as well as the offence of bribery of private individuals if the matter is highly complex due to the large number of perpetrators, accomplices or victims of the offence or due to the offence’s geographical scope, and (iii) concurrent jurisdiction with the Inter-regional Specialised Courts in economic and financial matters and the ordinary High Courts over cases involving bribery in the public sector, influence-peddling, unlawful taking of interests and favouritism, if such matters are particularly complex, and related money laundering activities.

The FAA is entitled to inform the Public Prosecutor about any act of corruption that it might become aware of (Article 3 6 of the Sapin II Law). In addition, the FAA 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 in setting up a compliance program. This monitoring involves periodic (at least annual) reports to the Public Prosecutor (Article 764-44 of the Code of Criminal Procedure). The FAA also has its own power to prosecute and punish (through its Sanctions Commission) representatives and companies or public establishments of at least 500 employees with a turnover exceeding EUR100 million not complying with their compulsory compliance duties pursuant to the Sapin II Law (Article 17). 

(See 5.1Enforcement Body above)

The Public Prosecutor or any police officer authorised by him is entitled to require by any means that documentation and information relevant to the investigation be provided to them. Should the individual or entity holding the documentation or information not respond to the request, this may be punished by a fine of EUR3,750 (Articles 60-1 and 77-1-1 of the Code of Criminal Procedure).

Under specific conditions and, as appropriate, supervision of the Public Prosecutor or the Investigating Magistrate, police officers may carry out investigations at the suspected person’s home (Articles 56, 76 and 95 of the Code of Criminal Procedure) or in any other relevant places, such as vehicles (Article 78-2-3 of the Code of Criminal Procedure), hotel rooms and bank vaults (Article 96 of the Code of Criminal Procedure) to search objects, documents and electronic data relating to the matter and to seize items useful for establishing the truth. 

What is more, the aforementioned law of 6 December 2013 extended the scope of extraordinary procedural measures available for for bribery, influence-peddling, embezzlement of public funds as well as related laundering activities. Now, investigators and prosecutorial agencies may take advantage of measures such as surveillance, infiltration, wiretapping, recording conversations and filming certain premises or vehicles (Article 706-1-1 of the Penal Code).

For the execution of their tasks, the FAA’s 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 maybe punished by a fine of EUR30,000 (Article 4 of the Sapin II Law).

As regards requests for information from the Public Prosecutor or the police officer, they 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). In other words, this request does not have to observe formal conditions.

Pursuant to Decree No. 2017-329 of 14 March 2017, the FAA’s 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 persons’ home) and during working hours. The representative of the entity searched must be informed that he can be assisted by the person of his choice.

The Public Prosecutor, regardless of its representative who takes action (National Financial Prosecutor, prosecutor before one of the eight Inter-regional Specialised Courts, prosecutor before a local High Court), 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 Minister 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 (i) to initiate prosecution, by summoning the accused person directly before a criminal court or by asking an Investigating Magistrate to carry out deeper investigations, (ii) to implement alternatives to prosecution (such as CRPC or public interest judicial convention), or (iii) to drop the case (Article 40-1 of the Code of Criminal Procedure).

The appointment and functioning rules of the FAA tend to provide its agents with autonomy in the exercise of their tasks. The FAA is led by a magistrate (the first director being Charles Duchaine) who is not allowed to receive or solicit any instruction from any administrative or governmental authority regarding its monitoring and prosecution activities. The Sanction Commission has a separate staff and activity (Article 2 of the Sapin II Law). Pending more detail on the procedure before the Sanction Commission, the FAA seems to enjoy wide leeway in deciding whether or not a company should be prosecuted before the Sanction Commission so that injunctions or sanctions be imposed.

(See 5.3 Jurisdiction for the Enforcement Body/Bodies above)

The Sapin II Law has given a modern twist to French anti-bribery legislation, drawing inspiration from the Anglo-Saxon soft law and proven settlement methods applied in the United States.

In view of its very recent implementation, it is obviously too early to give an assessment of the actual benefits brought by this new anti-bribery legislation. Nevertheless, it is regrettable that the new judicial convention was superimposed over the existing CRPC and created a difference in treatment between individuals and legal entities. Legal entities now have the possibility of escaping prosecution by paying a settlement amount while individuals are not granted this way out and are compelled to acknowledge guilt under the CRPC.

Although undoubtedly innovative, the Sapin II Law might also be viewed as an experimental law since some of its new measures have a rather narrow scope of application. For example, the new judicial convention is currently only available for bribery, influence-peddling and laundering of tax fraud proceeds, while criminal proceedings on account of other offences can only be solved by the means of a CRPC or full defence before the court. An extension of the judicial convention mechanism to all economic and financial offences would be very welcome.

Bougartchev Moyne Associés AARPI

4 place Saint Thomas d’Aquin
Paris
France
75007

01.42.84.87.77

01.42.84.87.79

kbougartchev@bougartchev-moyne.com; emoyne@bougartchev-moyne.com www.bougartchev-moyne.com

Law and Practice

Authors



Bougartchev Moyne Associés AARPI was established in January 2017 when Kiril Bougartchev and Emmanuel Moyne joined forces to create a law firm combining all the disciplines of business litigation, predominantly in criminal law. The firm is the fruit of more than 20 years of professional experience gained by the two founding partners at Gide and Linklaters, who are supported by around ten lawyers. The team assist public and private enterprises such as large corporate groups, banks and financial institutions, insurance companies and their executives in all disputes, whether involving white-collar crime, civil and commercial law or regulatory matters. With wide experience of emergency, complex, cross-border and multi-jurisdictional proceedings, the firm’s lawyers assist their clients in France and internationally with the benefit of privileged relations with counterpart law firms on all continents. Its primary practice areas are white-collar crime (bribery and related offences), crisis and reputational injury management, civil and commercial litigation, regulatory disputes, compliance and investigations.

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