Under French criminal law, there are three categories of offences: minor offences (punishable by financial penalties only), misdemeanours (punishable by imprisonment for between two months and ten years) and crimes (punishable by more than ten years' imprisonment). The last two categories are characterised by the following constituent elements being met:
The perpetrator is the person who commits, or attempts to commit, the offence (Article 121-4 of the Penal Code (PC)). The liability and sanctions incurred are identical in both cases. An attempt is committed where, the beginning of its execution having been demonstrated, it was suspended – or failed to achieve the desired effect – solely through circumstances independent of the perpetrator’s will (Article 121-5 of the PC).
In 2017, the limitation period for misdemeanours and crimes was doubled (ie, raised to six and 20 years respectively). These ordinary rules have exceptions in several areas such as drug trafficking or terrorism.
The starting point of the limitation period depends on the nature of the offence, whether it is instantaneous (the limitation period shall begin on the day on which the offence is committed) or continuous (the statute of limitations shall run from the day on which the criminal activity ceased) (Articles 7, 8 and 9 of the Code of Criminal Procedure (CCP)).
However, the starting point of the time limit may be delayed in certain specific cases (eg, when the offence is secret (occulte) or concealed (dissimulée)).
In the latter case, French courts have decided that the limitation period only runs from the day on which the offence could be discovered under circumstances enabling prosecution. This principle was enshrined in 2017 in the CCP (Article 9-1). It is particularly relevant in white-collar crime cases as it regularly applies to, for instance, breach of trust, misuse of corporate assets, bribery or influence-peddling. To avoid any risk of imprescriptibility of offences, prosecution of a misdemeanour is, in any event, time-barred 12 full years after 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 facts are committed in French territory. However, French courts also have jurisdiction to rule on offences committed outside the territory in several other cases.
French law may also apply on the grounds of the nationality of the author or victim.
According to Article 113-8 of the PC, in the cases provided for by Articles 113-6 and 113-7 of the same code, the Public Prosecutor can only begin a prosecution following a complaint lodged by the victim (or any rightful claimant) or an official denunciation from the country concerned.
It should be noted that, with regard to bribery and influence-peddling specifically, the dual criminality requirement, as well as the requirements of Article 113-8 of the PC, were abolished by Law No 2016-1691, dated 9 December 2016 (the Sapin II Law). This means that any French person who commits these offences outside French territory can now be prosecuted in France in all circumstances.
Moreover, based on principles relating to the connection between offences or their indivisibility (Articles 203 and 382 of the CCP), 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.
Legal entities may be criminally liable for all criminal offences, if the offences are committed on their behalf by their corporate bodies or representatives (Article 121-2 of the PC).
However, the liability of legal entities does not preclude individuals from also being liable if they are perpetrators of, or accomplices to, an offence.
The principle of discretionary prosecution enables proceedings against either the legal entity only, the individual(s) only, or both; it being specified that the condemnation of the individual(s) is not a prerequisite to sanction the legal entity and vice versa.
In addition, legal entities as well as individuals may be ordered by the judge to pay compensation for loss or damages arising from the offence they have committed.
Pursuant to the principle of individual criminal liability, in the context of a transaction involving a loss of legal existence (eg, a merger, a total demerger or a dissolution), the successor entity cannot be held liable for the offences committed by the other entity before the transaction if a final sentence has not been ordered before the date of the transaction. Conversely, should a final sentence be pronounced before the date of the transaction, the sanction will be transferred to the successor.
Civil action may be brought before civil courts or, together with the public action (see 2.1 Enforcement Authorities), before criminal courts.
However, in order to claim damages for the loss suffered because of the offence:
The victim of an offence has the right to choose between civil and criminal proceedings. This choice is irrevocable (Article 5 of the CCP), but irrevocability applies only when the victim brought the civil action before the civil courts in the first place (Article 426 of the CCP).
If the civil judge decides before the public action is initiated, the results will be independent. If the public action is initiated before or during the civil proceedings, the criminal res judicata has authority over the civil (Article 4 of the CCP).
Class actions are only possible for a very few consumer law cases (Article L. 623-1 of the Consumer Code).
Finally, accredited NGOs are authorised, in certain circumstances, to exercise the rights of a civil claimant for a certain number of offences, in particular for various corruption offences (Article 2-23 of the CCP).
The judgments issued in recent years in cases involving breaches of the duty of probity suggest that French courts are becoming more severe and tending towards an alignment of French sentences with US ones, with increasing recourse to non-suspended prison sentences and huge financial penalties for economic and financial offences.
On 20 February 2019, the Paris Criminal Court sentenced a Swiss bank to a record fine of EUR3.7 billion – three of its former representatives having been sentenced to fines ranging from EUR200,000 to EUR300,000 and suspended imprisonment sentences ranging from 12 to 18 months – on the grounds of unlawful financial and banking solicitation of French prospects and aggravated money laundering of the proceeds of tax fraud. This decision, which is unprecedented, seems to announce a new penalty ceiling, it being specified that the bank and the three former representatives were condemned to pay EUR800 million for damages to the French state. The sentenced persons filed an appeal against the decision, which is questionable in many ways.
On 13 September 2019, a pre-eminent politician was sentenced to four years' imprisonment as well as ten years of ineligibility for tax fraud. On 18 October 2019, the same politician was sentenced to five year’s imprisonment as well as ten years of ineligibility for aggravated laundering of tax fraud. Both sentences were confirmed by the Paris Court of Appeal, respectively on 4 March 2020 and 27 May 2020.
Use of the Convention Judiciaire d’Intérêt Public
Since the introduction of the French equivalent of the US deferred prosecution agreement (DPA), the "public interest judicial convention" (convention judiciaire d’intérêt public, CJIP), eleven have been concluded with French as well as foreign companies. This is more than the UK's Serious Fraud Office (SFO).
On May 24, 2018, a CJIP was concluded with a French bank concerning bribery of Libyan public officials. This is the first convention negotiated in co-operation with the US Department of Justice (DoJ). Indeed, the two prosecuting authorities co-ordinated their action in order to simultaneously reach the conclusion of a CJIP and a DPA. The French bank has agreed to pay USD1.34 billion to resolve the disputes in the United States and France, the sanctions in France being a public interest fine of approximately EUR250 million and a two-year supervision of its compliance programme by the French Anti-corruption Agency (Agence Française Anticorruption, AFA).
The French and Irish subsidiaries of a major American multinational technology company, which has been the target of a judicial investigation in France for aggravated tax fraud and money laundering since 2015, agreed on 12 September 2019 to pay nearly EUR1 billion to settle all its disputes with the French tax authorities and the National Financial Prosecutor’s Office.
On 31 January 2020, a leading manufacturer in the aerospace sector concluded agreements with the French Parquet National Financier (PNF), the SFO and the US DoJ in order to resolve investigations into allegations of corruption of foreign public officials.
Further to these agreements – the largest ever entered into by the PNF and the SFO – the manufacturer will pay a total of EUR3.598 billion plus interest and costs to the French, UK and US authorities to avoid prosecution.
The powers to prosecute and convict perpetrators of criminal offences belong to the judicial authorities and are not granted to administrative bodies.
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 by way of a civil party complaint (plainte avec constitution de partie civile) (see 2.2 Initiating an Investigation) or direct summons to appear before a criminal court. The local Public Prosecutors at every ordinary High Court (Tribunal judiciaire), 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 criminal cases.
However, this general jurisdiction is shared with specific administrative authorities, prosecutorial agencies and specialised courts.
Prosecutors at eight inter-regional specialised courts – as well as the Investigating Magistrate and the Criminal Chambers of these inter-regional courts – are granted expanded territorial jurisdiction over a certain number of economic and financial offences, in highly complex matters.
Moreover, 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 to deal with those matters that are most complex or “likely to generate significant national or international impact” (Circular of 31 January 2014, JUSD1402887C).
With regard to economic and financial offences, the above-mentioned 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).
In addition, 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) is in charge of the recovering of assets seized in criminal proceedings and of conducting pre-judgment sales of confiscated assets.
Finally, under French law, the main administrative authorities empowered to prosecute specific administrative – but not criminal – offences are the following:
It should be noted that Article 40 of the CCP provides that every constituted authority and every public officer or civil servant who, in the performance of his or her duties, has gained knowledge of the existence of a crime or of a misdemeanour, is obliged to notify forthwith the Public Prosecutor of the offence and to provide him or her with any relevant information, official reports or documents.
A criminal investigation may begin in different ways. In this regard, one must distinguish between the three different forms a criminal investigation can take.
An investigation of flagrance (enquête de flagrance) may be opened when either a crime punishable by imprisonment is in the process of being committed or has just been committed or when the suspect is found in possession of something which would implicate his or her participation in the offence (Article 53 of the CCP). Therefore, such investigations may be opened only by enforcement policy officers informed of a flagrant offence or having directly witnessed it, under the supervision of the Public Prosecutor (Article 54 of the CCP).
A preliminary investigation (enquête préliminaire) may be initiated for any suspected offence either by the Public Prosecutor – following the complaint of a victim, a denunciation, a press article, etc – or by law enforcement officers on their own initiative (Article 75 of the CCP), generally following a criminal complaint.
A judicial investigation (information judiciaire) is led by an Investigating Magistrate following an opening submission (réquisitoire introductif) made by the Public Prosecutor; or a civil party complaint (plainte avec constitution de partie civile), which can only be lodged after an ordinary complaint which the Public Prosecutor lets the victim know he or she will not prosecute; or if a three-month period has run from the filing of that ordinary complaint (Article 85 of the CCP).
In general, law enforcement officers, acting under the supervision of the Public Prosecutor or an Investigating Magistrate, have broad powers to carry out all actions necessary to determine the truth. However, such powers vary depending on the type of investigation carried out and the type of offence.
Police officers may hear any witness who may provide information in one or more interviews, without any duress. If necessary, for the purposes of the investigation, the witness may be retained under duress, for a maximum of four hours (Articles 62 and 77 of the CCP).
Provided there are one or more plausible reasons to suspect that a person has committed or attempted to commit a crime or offence punishable by imprisonment, that person cannot be heard as a simple witness and shall be placed under police custody – with all the guarantees provided by the law for such a coercive measure (Articles 63-1 et seq and 77 of the CCP) – if such a measure is the only way to achieve at least one of the objectives enumerated by law (eg, preventing the person from altering the evidence or material clues or preventing the person from tampering with witnesses or victims and their families or loved ones).
In principle, the person placed under custody may not be held more than 24 hours. However, the detention may be extended for a further period of up to 24 hours on the authorisation of the Public Prosecutor (Articles 63 and 77 of the CCP). For certain specific offences, police custody may exceptionally be subject to two supplementary extensions, each of 24 hours (Articles 706-88 et seq of the CCP).
A law enforcement officer may also order any person, establishment or organisation, whether public or private, or any public services – likely to possess any documents relevant to the inquiry in progress, including those produced from a registered computer or data processing system – to provide those documents (Article 60-1 of the CCP).
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 or office (Articles 56, 76 and 95 of the CCP) or in any other relevant place, such as vehicles (Article 78-2-3 of the CCP), hotel rooms and bank vaults (Article 96 of the CCP) to search and seize objects and documents that could be useful for establishing the truth.
Whereas in investigations of flagrance, police officers may carry out dawn raids on their own initiative without any prior authorisation of the searched party, nor the authorisation of a judge (Article 56 of the CCP), such operations may not be conducted without the express consent of the suspected person or a reasoned order of the “liberty and custody judge” in the course of preliminary investigations.
Finally, for certain white-collar offences – including corruption and influence-peddling offences, tax fraud offences when they are committed by an organised gang, and market abuses offences when they are committed by an organised gang – criminal authorities may take advantage of measures such as surveillance, infiltration, wiretapping, recording conversations and filming certain premises or vehicles (Article 706-1-1 of the CCP).
The practice of internal investigation is still in development in France. It is not governed by any laws, except the ethical rules adopted by the Paris Bar Association to regulate internal investigations led by lawyers and case law.
Moreover, to comply with the Sapin II Law, a company may be encouraged to initiate an internal investigation in order to benefit from the possibility of concluding a CJIP (see 2.7 Deferred Prosecution). Indeed, according to the guidelines published by the National Financial Prosecutor’s Office and the AFA on 27 June 2019, among the conditions taken into account when assessing the possibility of concluding a CJIP, is the opening, by the legal entity, of an internal investigation related to the facts and dysfunctions of the compliance system in question, which should also contribute to the determination of individual responsibilities and identification of the main witnesses.
France is party to many multilateral and bilateral instruments ensuring co-operation in criminal matters.
As a member of the European Union, France is part of several mechanisms that aim at facilitating the exchange of information between European countries. Pursuant to Articles 694-14 to 695-10 of the CCP, a European Investigation Order – requesting the gathering and transfer of evidence – can be executed without additional formalities in any other EU member state.
There are also specific provisions governing the European Arrest Warrant. Under Articles 695-11 et seq of the CCP, such a warrant can be delivered to a foreign counterpart in order to require its assistance in the arrest and presentation to competent authorities of a person accused of a serious offence in France.
On the international stage, France is party to a number of bilateral agreements (MLATs) regulating the co-operation between countries. For example, concerning extradition proceedings, France is a signatory of more than sixty bilateral agreements.
France is also signatory of memoranda of understanding (MOUs).
Several recent high-profile cases demonstrate that European and international co-operation works efficiently.
That being said, it has to be underlined that these mechanisms of co-operation are express derogations from the French “blocking statute”.
Indeed, concerning the transmission of evidence in France to foreign authorities, the blocking statute (ie, the Law No 68-678, dated 26 July 1968) prohibits any person from disclosing documents or information of an economic, commercial, industrial, financial or technical nature intended to constitute evidence for foreign judicial proceedings, except where the disclosure occurs through the mechanisms provided by international treaties or agreements such as the Hague Convention. Such a prohibition is sanctioned as a criminal offence. Indeed, non-compliance with these provisions is punishable by a term of imprisonment of up to six months and a fine of up to EUR18,000 for individuals and EUR90,000 for legal entities.
However, both the effectiveness and the efficiency of this law have been criticised. As a matter of fact, in front of American judges, the blocking-statute defence to discovery has always failed. Foreign judges believe that this Law lacks “hardship” since it has only led to one conviction, in 2007.
Several propositions were made, notably in 2012 and 2019, to improve the French blocking statute.
In the context of the CJIP concluded on 31 January 2020 by a leading manufacturer in the aerospace sector (see 1.6 Recent Case Law and Latest Developments), the PNF took particular care to fully comply with the blocking statute when sharing documents and information with the DoJ and the SFO.
The principle is that public action is initiated and exercised by the Public Prosecutor (Article 1 of the CCP).
However, prosecution may also be initiated by the victim of the offence or by accredited NGOs.
The prosecutor then has the most important role insofar as he or she "receives complaints and denunciations and assesses the appropriate action to be taken" (Article 40 of the CCP). When informed of the commission of an offence, he or she has the option of not prosecuting (dismissal without further action), prosecuting or using an alternative to prosecution.
In the same way as for investigations, administrative authorities (AMF, AdlC, ACPR, etc), or the government authorities themselves (tax authorities, customs authorities, etc), have the power to initiate proceedings in order to impose administrative sanctions on natural or legal persons who fail to comply with their obligations in a particular field.
The Sapin II Law introduced a true settlement procedure, inspired by the US DPA, with no acknowledgment of guilt. Called the CJIP, this new alternative dispute resolution mechanism is only available for legal entities suspected of acts of bribery, influence-peddling, the laundering of tax-fraud proceeds, related offences and (since the Anti-Fraud Law of 23 October 2018) tax fraud offences.
This settlement procedure is an option made available for the Public Prosecutor before the opening of criminal proceedings as well as to the Investigating Magistrate before the closing of his or her investigation, at the request of, or in agreement with, the Public Prosecutor. Should this procedure be initiated, the accused legal entity may be required to:
The victim would retain the ability to claim compensation for his or her loss before the civil courts and the legal entity’s executives, as well as any individual involved, would remain criminally liable before the criminal jurisdictions.
Therefore, negotiating and concluding a CJIP does not close the whole criminal case by itself. In practice, attorneys tend to negotiate in parallel that the charges against the individuals be dismissed when a CJIP is concluded. Public Prosecutors and Investigating Magistrates are very cautious about this and most of the time are eager to prosecute or refer the individuals to the criminal court.
Since the entry into force of the Sapin II law, eleven CJIPs have been concluded for a total amount of fines paid to the French Treasury amounting to more than EUR3 billion.
"Pleading guilty" is recognised under French law through the mechanism of a preliminary admission of guilt (comparution sur reconnaissance préalable de culpabilité, CRPC). This procedure allows the Public Prosecutor’s office, or the Investigating Magistrate, 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 person, either legal or natural, who acknowledges the acts of which he, she or it is accused (Articles 495-7 to 495-16 of the CCP). If the accused accepts the penalty(ies) proposed, the presiding judge of the High Court must then approve such penalty(ies). Use of this procedure results in a criminal conviction because the aforementioned court judgment approving the penalty(ies) is deemed a conviction.
In addition to concealment (see 3.11 Concealment), the main general offences applicable to business are misuse of corporate assets, breach of trust, fraudulent obtaining and forgery. For all these offences, a criminal intent is required.
Misuse of Corporate Assets
French criminal law proscribes the misuse of corporate power or assets, which is defined, with respect to joint-stock companies, as the use of company property or credit, or the misuse of powers or voting rights by a company chairman, director, member of the executive or supervisory board, or de jure or de facto manager, in bad faith and in a manner that he or she knows is contrary to the interests of the company, for personal purposes or to benefit another company or business in which they are directly or indirectly involved (Articles L.242-6 and L242-30 of the Commercial Code (Ccom)). Specific regulations apply to de jure and de facto managers of commercial enterprises with different structures (partnerships limited by shares, simplified joint-stock companies and limited liability companies).
Individuals may incur a penalty of up to five years' imprisonment, a fine of up to EUR375,000 and various additional penalties, while legal persons may incur a fine of up to EUR1.875 million and various additional penalties.
With respect to joint-stock companies and limited liability companies, the use of company property or credit as described above may be punished by a term of imprisonment of up to seven years and by a fine of up to EUR500,000 in cases where the offence was accomplished or facilitated by an agreement concluded with, or an account opened in, a foreign entity, or thanks to the interposition of a natural or legal person, or of any entity or trust or similar institution registered abroad.
Breach of Trust
Under Article 314-1 of the PC, breach of trust is the act of “embezzling funds, securities or any assets that have been delivered in order to be returned, represented or for a specific use”. Individuals may incur a prison term of up to three years, a fine of up to EUR375,000 and various additional penalties, while legal persons may incur a fine of up to EUR1.875 million and various additional penalties. These sanctions may be increased to up to seven years and EUR750,000, notably when the offence is committed by a person making a public appeal with a view to obtaining the transfer of funds or securities, either for his or her own account or as the manager or legally employed or de facto employee of an industrial or commercial company (Article 314-2 of the PC).
The delivery is the prior condition of the offence. The asset must then be embezzled.
This offence is applicable to all intangible assets capable of appropriation. It may therefore be used in the case of a violation of business secrecy.
Under Article 313-1 of the PC, fraudulent obtaining is the act of “misleading a person either by the use of a false name or quality, or by the abuse of a true quality or by the use of deceptive practices, and thereby leading such a person to deliver funds, securities or services or to consent to a deed, operating obligation or discharge”. Individuals may incur a prison term of up to five years, a fine of up to EUR375,000 and various additional penalties, while legal persons may incur a fine of up to EUR1.875 million and various additional penalties.
French criminal law punishes forgery (ie, any fraudulent alteration of the truth that is liable to cause harm), whether created by any means in a written document or through any other medium of expression, the object of which is, or the effect of which may be, to provide evidence of a right or of a situation carrying legal consequences (Article 441-1 of the PC).
Individuals may incur a penalty of up to a three years' imprisonment, a fine of up to EUR45,000 and various additional penalties, while legal persons may incur a fine of up to EUR225,000 and various additional penalties.
Under French criminal law, the prosecution of bribery revolves around the status of the person bribed so that a specific offence exists for each type of person bribed. The French legislator has thus criminalised bribery of:
Regardless of the offence concerned, 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.
Active and Passive Bribery
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 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 or her position, duties, mandate or activities, or facilitated thereby; or accepting the proposal of a 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 or her 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 or her position, duties, mandate or activities, or facilitated thereby. The mere receipt of a bribe thus constitutes an offence in itself.
Domestic public officials
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 PC). Additional penalties may also be imposed on such persons.
Legal entities are liable for a fine of EUR5 million, which may be increased to double the proceeds generated by the offence, and additional penalties (Articles 433-25 and 434-47 of the PC).
Domestic judicial staff
Bribery of domestic judicial staff for the benefit or to the detriment of a person who is the subject of a criminal prosecution is punishable by a term of imprisonment of up to 15 years (Article 434-9 of the PC).
Foreign public officials and judicial staff
Active or passive bribery of foreign public officials and of foreign or international judicial staff is punishable by a term of 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 , 435-1, 435-9, 435-7 and 435-15 of the PC). 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 PC). Additional penalties are also provided (Articles 435-14 and 435-15 of the PC).
Active and passive bribery of private individuals by individuals is punishable by 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 (Articles 445-1 and 445-2 of the PC), as well as additional penalties (Article 445-3 of the PC), 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 additional penalties (Article 445-4 of the PC).
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 abuses 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 PC) or a domestic judicial official (Article 434-9-1 of the PC) or a public official from a public international organisation (Articles 435-4 and 435-2 of the PC) or a judicial official from an international court (Articles 435-8 and 435-10 of the PC) or, following the Sapin II Law, a public official from a foreign state (Articles 435-4 and 435-2 of the PC).
Penalties similar to bribery are provided for influence peddling.
Other behaviours involving public officials which may constitute criminal offences under French law include:
Article 17 of the Sapin II Law requires the implementation of a corruption prevention plan for chairmen, general managers and company managers as well as members of the management boards of public limited companies 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. This represents around 1,800 companies in France. The chairmen and general managers of public industrial and commercial establishments employing at least 500 employees, or belonging to a public group employing at least 500 people, and whose consolidated turnover, or turnover, exceeds EUR100 million will also be subject to this obligation.
Persons subject to this obligation must therefore take measures, under the AFA’s supervision, to prevent and detect the commission, in France or abroad, of acts of corruption or influence-peddling by establishing a compliance programme consisting of the following measures:
The legislator has empowered the AFA to assess the quality and effectiveness of the preventative measures – through the conduct of inspections during which the Agency may have access to any documents and hear any individuals – and to impose, in the event of non-compliance, graduated sanctions (ranging from warnings to fines 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 Public Prosecutor.
The Enforcement Committee of the AFA may impose a financial penalty in proportion to the seriousness of the breaches found and the financial situation of the individual or the legal entity sanctioned (its maximum amount is set at EUR200,000 for individuals and EUR1million for legal entities).
On 4 July 2019, the Enforcement Committee of the AFA rendered its first decision. While the AFA had referred a company and its CEO on the grounds of breaches of the above-mentioned measures, the Enforcement Committee dismissed the case. On 7 February 2020, it rendered its second decision, further to which a company was enjoined to comply with the Sapin II law requirements with respect to its code of conduct and to finalise the implementation of its accounting procedures.
French law provides for a series of offences regulating market abuse and banking operations.
Market abuse can receive both a criminal and an administrative qualification. Thus, it can be investigated, prosecuted and sentenced either by the National Financial Prosecutor's Office (PNF) and the criminal division of the Paris High Court or by the AMF. Article L. 465-3-6 of the Monetary and Financial Code (MFC) introduced a case referral system in order to decide whether the criminal channel or the administrative channel is the most appropriate choice for the punishment of the alleged facts, while prohibiting each of the authorities in question (the AMF’s Board and the PNF) from prosecuting market abuse without obtaining the other’s approval to do so.
That being said, the market abuse administrative offences are those described in Regulation No 596/2014/EU of the European Parliament and Council of 16 April 2014 on market abuse (MAR) whereas market abuse criminal offences are defined and prohibited by Articles L.465-1 et seq of the MFC.
Although there are some minor differences between these two regulations, both prohibit insider dealing (Articles 8 of MAR and L. 465-1 and L. 465-2 of the MFC), unlawful disclosure of inside information (Articles 10 of MAR and L. 465-2 III and L. 465-3 of the MFC) and market manipulation (Articles 12 of MAR and L. 465-3-1 et seq of the MFC).
Enforcement of Market Abuse Regulation
Pursuant to Articles L. 465-1 to Article L. 465-3-4 of the MFC, any individual committing a market abuse or attempting to commit such a criminal offence may face a fine of up to EUR100 million and a term of imprisonment of five to ten years. Legal entities are liable for a fine of up to EUR500 million (Article 131-38 of the French PC) and supplemental penalties provided by Article 131-39 of the French PC.
Before the AMF’s Enforcement Committee, individuals and legal persons convicted for market abuse can be sentenced to pay a financial penalty of up to EUR100 million or ten times the amount of gains generated. For individuals acting under the authority or on behalf of a financial intermediary, the maximum financial sanction incurred is up to EUR15 million or ten times the amount of the profit earned. Even if not provided by law, in market abuses cases, the sanctions pronounced by the AMF’s Enforcement Committee generally represent two or three times the profits earned.
Banking Activity Regulation
Many offences also apply to banking activity (Articles L. 351-1 et seq of the MFC).
For instance, unlawful financial and banking solicitation (ie, financial or banking solicitation by any person who has not obtained a professional licence to do so) is prohibited and sanctioned by a term of imprisonment of up to six months and a fine of up to EUR7,500.
In addition, breaching banking secrecy is also prohibited. It constitutes an offence punishable by a term of imprisonment of up to one year and a fine of up to EUR15,000.
The specifics of criminal tax law can be explained by the dual purpose of this discipline: (i) to punish the tax evader, but (ii) above all to collect the tax due to the state. This leads to justifying certain derogations from the principles of general criminal law and criminal procedure.
The General Tax Code provides for a dual system of sanctions: tax sanctions on the one hand, criminal sanctions on the other, which can be combined depending on the circumstances.
There are many offences relating to tax fraud, often specific to the different types of existing taxes. The main offence remains. above all, the general offence of tax fraud (Article 1741 of the General Tax Code) which can result from several types of behaviour such as:
In addition to recovering the evaded tax, tax fraud is punishable by a term of imprisonment of up to five years, a fine of up to EUR500,000 (and EUR2.5 million for legal entities) – an amount that may be increased to twice the value of the proceeds of the offence – and various additional penalties.
These sanctions may be increased to up to seven years and to EUR3 million – an amount that may be increased to twice the value of the proceeds of the offence – if the offence is committed by an organised gang or in case of aggravating circumstances.
Most companies must provide the court registry with annual accounts, an annual report and an auditors’ report on their annual accounts. Furthermore, listed companies are required to publish several financial information reports, punctually, on a quarterly basis.
It is therefore an offence for the chairman, directors, members of the executive or supervisory board, or 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 (Articles L.241-3-3°, L.242-6-2° and L.249-1 of the Ccom). Legal entities may incur a fine of up to EUR1.875 million.
Listed companies may also be prosecuted before the AMF if they disclose financial information that is false, inaccurate or deceptive (Articles 223-1 and 632-1 of the AMF’s General Regulation). Legal entities, as well as their executives, held liable for dissemination of false information may face a financial penalty of up to EUR100 million or an amount equal to up to ten times the gains generated (Article 621-15 of the MFC).
Unlike countries such as the United States, Japan or Canada, which mainly have formal criminal competition law, French law on anti-competitive practices has largely shifted to administrative law even if some behaviours may still be criminally prosecuted.
Under Articles 101(1) of the Treaty on the Functioning of the European Union (TFEU) and L. 420-1 of the Ccom, prohibited agreements are defined by:
According to European and national case law, the agreement may only constitute an infringement of competition law if it affects the market in a significant way (ECJ, 9 July 1969, Case 5/69 – Court of Cassation, 4 May 1993). In addition, agreements are assessed in concreto. Therefore, while an agreement may contain clauses, which, in abstracto, are restrictive of competition, it may, once placed in its technical, economic and legal context, no longer have an anti-competitive character.
Abuse of a Dominant Position
Under Articles 102 of the TFEU and L. 420-2 of the Ccom, the exploitation of a dominant position is abusive if it has as its object or may have the effect of preventing, restricting or distorting competition.
The existence of a dominant position is a prerequisite for the constitution of the infringement. In addition, the exploitation of this position can be abusive in different ways:
Abuse of Economic Dependence
Finally, pursuant to Article L. 420-2 of the Ccom, the abusive exploitation of a state of economic dependence affecting the functioning or structure of competition is an offence. Economic dependence is a relationship in which one of the partners has no alternative solution if he or she wishes to refuse to enter into a contract under the conditions imposed by his or her customer or supplier (Court of Cassation, 7 January 2004, No. 01.12-477).
Enforcement and Defences
In the event of a breach of competition law, the Competition Authority may issue injunctions to companies, accept commitments from them (Article L. 464-2 of the Ccom) and/or impose financial penalties, which may amount to 10% of the worldwide consolidated turnover of the companies (Article L. 464-2 of the Ccom).
The company can justify the anti-competitive practice by referring to a legal text that would impose such a practice or by demonstrating the efficiency gains achieved through the practice (Article L. 420-4 of the Ccom).
Lastly, Article L. 420-6 of the Ccom criminalises the act of participating in anti-competitive practice and punishes it with a prison term of up to four years and a fine of up to EUR75,000.
The main offences under consumer criminal law are prohibited trade practices, deception and falsification.
Prohibited Trade Practices
Within the category of prohibited trade practices, there are unfair trade practices, which are subdivided into misleading practices and abusive practices. Practices of both subcategories are punishable by a term of imprisonment of up to two years and a fine of up to EUR300,000 (Articles L.132-2 and L.132-11 of the Consumer Code). In addition, prohibited trade practices also include the abuse of an individual’s state of ignorance or weakness, which is punishable by a term of imprisonment of up to three years and a fine of up to EUR375,000 (Article L.132-14 of the Consumer Code).
Article L.441-1 of the Consumer Code prohibits deception. As a prerequisite, a trade contract needs to exist: the perpetrator must commit acts likely to mislead the contractor while intending to deceive him or her. Deception may take place through a third party and may concern:
This offence is punishable by a term of imprisonment of up to two years and a fine of up to EUR300,000 (Article L.454-1 of the Consumer Code). Sanctions may reach seven years of imprisonment and a fine of up to EUR750,000 where the product concerned involves a danger to human and animal health or where the acts were committed by an organised group.
Lastly, Article L.413-1 of the Consumer Code prohibits falsifications. This offence consists in using unlawful manipulation or processing that does not comply with the regulations in force and is likely to alter the substance of the product. Falsification covers three types of products: products used for human or animal consumption, beverages and agricultural or natural products. This offence is punishable by a term of imprisonment of up to two years and a fine of up to EUR300,00 (Article L.451-1-1 of the Consumer Code).
The fines provided for all offences mentioned under this section can also be increased to 10% of the annual average turnover, in proportion to the benefits derived from the offence (Articles L.132-2, L.132-11, L.132-14, L.451-5 and L.454-4 of the Consumer Code). Fines sanctioning misleading practices can also reach 50% of the expenses incurred in carrying out the advertising or practice constituting the offence (Article L.132-2 of the Consumer Code).
Legal persons are also liable for the offences mentioned above. Fines imposed on legal persons can reach five times the maximum fine amount provided for individuals.
Article 226-18 of the PC sanctions the collection of personal data by fraudulent, unfair or unlawful means. This offence is punishable by a term of imprisonment of up to five years and a fine of up to EUR300,000.
Article 226-22 of the PC sanctions the act of disclosing personal data whose disclosure would have the effect of violating the consideration of the person concerned or the privacy of his or her private life, to the knowledge of a third party who does not have the right to receive them. This offence is punishable by a term of imprisonment of up to five years and a fine of up to EUR300,000.
Article 323-1 of the PC punishes the fact of accessing or remaining, fraudulently, in all or part of an automated data processing system. This offence is punishable by a term of imprisonment of up to two years and a fine of up to EUR60,000.
Article 323-3 of the PC sanctions the fraudulent introduction of data into an automated processing system or the fraudulent deletion or modification of the data it contains. This offence is punishable by a term of imprisonment of up to five years and a fine of up to EUR150,000.
In France, the violation of trade secrets is not protected by a specific offence. When such a violation occurs, companies use related offences such as breach of trust, theft, concealment and laundering.
Lastly, treason and espionage (Articles 411-1 et seq of the PC), as well as violations of national defence secrecy (Articles 413-9 et seq of the PC), are punishable.
French customs law gathers together a set of offences that relate to the transport of goods and evasion of the vigilance of the administration. In addition, a second category of offences involves more malicious misconduct, which aims to distort the customs treatment of goods as provided for by the regulations. As a result, there are a very large number of offences regulating the conduct of international trade operators.
One of the most important offences concerns smuggling, which refers to the illegal transport of goods or persons, in particular across borders, in order to avoid paying taxes or bringing prohibited products into a country or, conversely, to remove them despite a ban. The Customs Code provides for a penalty consisting of the confiscation of the disputed goods, a prison sentence of up to ten years and a fine from EUR150 up to ten times the value of the disputed goods, depending on the nature of the said goods.
The Customs Code contains disparate provisions designed to prosecute acts of all kinds, the common feature of these acts being the desire to override the multiple obligations imposed on international trade actors. These acts include:
Criminalised as complicity for a long time, concealment is now an autonomous offence. Under Article 321-1 of the PC, concealment is to conceal, retain or transfer a thing or act as an intermediary in its transfer, knowing that it was obtained through a crime or misdemeanour, or to knowingly benefit in any manner from the proceeds of a crime or misdemeanour.
Concealment therefore implies the commission of a prior offence. It is not limited to the hiding, possession or transmission of something resulting from this offence, it also includes the act of profiting from it. In order to characterise concealment, the agent must know that the thing came from a crime or misdemeanour.
As a general rule, individuals can incur a term of imprisonment of up to five years and a fine of up to EUR375,000. However, when the original offence is punishable by a prison sentence that is longer than that incurred for concealment, the receiver incurs the penalties pertaining to the offence that he or she knew about. If there are aggravating circumstances attached to the original offence, the receiver of the proceeds will only incur the penalties that exclusively relate to the circumstances he or she was aware of.
Moreover, fines may be raised beyond EUR375,000 to up to half the value of the proceeds. Individuals may also incur a number of additional penalties.
Legal persons may incur a fine of up to EUR1.875 million – an amount that may be increased to half the value of the proceeds of the offence – as well as various additional penalties.
The penalties incurred by individuals and legal persons may also be doubled when the concealment is committed:
In France, the perpetrator of the predicate offence cannot be prosecuted for both the predicate offence and concealment. However, his or her accomplice can be prosecuted for concealment.
Under Article 121-7 of the PC, an accomplice is an individual or legal person who knowingly, by aiding and abetting, has facilitated the preparation or commission of a crime or misdemeanour, or any person who – by means of gift, promise, threat, order or by abusing his or her authority or powers – has provoked the commission of an offence or given instructions towards its commission.
Complicity implies a main punishable act and an act of complicity. Moreover, the accomplice must have been willing to commit his or her acts with full knowledge of the main offence.
The accomplice is punished as a perpetrator and incurs the same main and complementary penalties as the main perpetrator.
Articles 324 et seq of the PC prohibit money laundering.
Two forms of behaviours are criminalised:
Money laundering is committed regardless of whether the perpetrator derives any benefit from it. The offence requires the committing of an original offence punishable by law. The offence is also intentional, which implies that the perpetrator must have been aware of the fraudulent origin of the funds.
Individuals can incur a term of imprisonment of up to five years, a fine of up to EUR375,000 as well as additional penalties. These sanctions may be doubled in the case of aggravated money laundering, namely when the offence is committed:
The fine may be increased to half the value of the assets or funds involved in the money laundering.
Moreover, when the underlying offence is punished by a prison sentence which is longer than that incurred for money laundering, the money launderer incurs the penalties pertaining to the offence that he or she knew about.
Legal persons may incur a fine of up to EUR1.875 million – which may be doubled in the event of aggravated money laundering – and additional penalties. The fine may also be increased to half the value of the assets or funds involved in the money laundering.
The 6 December 2013 Law enabled the reversal of the burden of proof concerning money laundering (see 5.1 Burden of Proof).
Obligation to Prevent Money Laundering
The prevention of money laundering imposes a number of obligations on economic and financial actors.
Failure to comply with these obligations may lead to various sanctions.
French criminal law provides for a number of grounds for the exclusion or mitigation of criminal liability, such as:
It should be noted that most of these grounds are rather exceptionally applied, especially in white-collar matters.
The Sapin II Law created a new defence concerning whistle-blowers discouraging any prosecution against them for breach of secrecy (Article 122-9 of the PC).
Apart from that, French law does not provide for any specific defence. For example, setting up a very comprehensive compliance programme 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 or she 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 arising from the offence has ceased (Article 132-59 of the PC). The judge has full discretion in granting such an exemption. In practical terms, it is mostly granted when the offences are minor or when the perpetrator is a first-time offender.
As explained in 4.1 Defences, French law does not provide for any specific defence and/or exception.
Under French law, there is no special treatment for perpetrators of offences who co-operate with investigators and prosecutors. However, it should be noted that the co-operation of the accused during the investigation stage and throughout the proceedings as well as, for instance, the adoption by legal entities of measures intended to reinforce the internal fight against white-collar crime, may be considered to be mitigating factors by a court when it determines the quantum of the penalty imposed.
Concerning self-disclosure, specific provisions regarding anti-corruption law recently entered into force. 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 prison sentence reduced by half if, by having informed the administrative or judicial authorities, they allowed them to put a stop to the offence or to identify other perpetrators or accomplices (Articles 432-11-1, 433-2-1, 434-9-2, 435-6-1 and 435-11-1 of the PC). The same possibility exists for the perpetrators of, or the accomplices to, the offence of tax fraud (Article 1741 of the General Tax Code).
French competition law provides for a leniency procedure carried out by the Competition Authority. As a result, the Authority may grant total or partial immunity from financial penalties incurred by a company participating in a cartel if that company contributes to the proving of that cartel's existence (Article L. 464-2 of the Ccom).
Apart from these specific provisions, French criminal law does not provide for any other rule regulating self-disclosure nor any other leniency measure.
However, it should be noted that co-operation and self-disclosure are part of the criteria taken into account by the Public Prosecutor while assessing the opportunity to enter into a CJIP and/or the amount of the fine to be pronounced.
In the public sector, Article 40 of the CCP requires all public officials and civil servants who, in the performance of their duties, become aware of a crime or misdemeanour to inform the Public Prosecutor’s office and provide it with all the relevant information.
In the private sector, statutory auditors are required, under criminal penalties if they do not (Article L.820-7 of the Ccom), 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 Ccom). 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 MFC).
The Sapin II Law granted a protection to whistle-blowers. Under this new law, 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 PC).
Moreover, obstruction of a whistle-blowers’ action constitutes an offence punishable by a term of imprisonment of up to one year and a fine of up to EUR15,000. Defamation complaints against whistle-blowers are also discouraged: the maximum fine that may be imposed on plaintiffs for abusive or dilatory complaints has been increased from EUR15,000 to EUR30,000 (Article 13).
Compliance measures are also imposed on large entities companies of more than 50 employees, state administrations and municipalities which are under an obligation to set up appropriate alert management procedures to escalate reports from members of staff (Article 8).
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 up to two years' imprisonment and a fine of up to EUR30,000 (Article 9).
Other types of incentives, such as financial rewards, do not exist under French law, except in the field of tax fraud (Article 109 of Sapin II Law).
The presumption of innocence is one of the fundamental principles of French criminal procedure. Therefore, the burden of proof lies on the Public Prosecutor. This principle requires the judge to give the accused the benefit of any doubt as to the substance of the charge (Constitutional Council, 19 and 20 January 1981).
The prosecuting party must, in theory, provide full and complete proof of the existence of the elements constituting the offence.
However, the difficulties regarding the burden of proof have led the legislature and judges to create some kinds of presumption of guilt. In white-collar matters, both money laundering and misuse of corporate assets are concerned. With regard to money laundering, Law No 2013-1117 of 6 December 2013 created a presumption of illegality of assets and income. In other words, the assets or the income are presumed to be the direct or indirect proceeds of a crime or misdemeanour when the material, legal or financial conditions of the investment or concealment or exchange can only be justified by the intent to hide the source of the funds or the actual receipt of such assets or incomes (Article 324-1-1 of the PC). With regard to misuse of corporate assets, consistent case law considers that, where it is not possible to prove that company funds, taken in secret by a manager, have been used solely in the interests of the company, they have necessarily been used in the latter’s personal interest (Court of Cassation, 30 January 2019, No 17-85304).
The discretion of the judge to determine penalties is one of the fundamental principles of French criminal law. The judge thus has full discretion to choose, from amongst the penalties applicable to the offence, those he or she deems appropriate and to determine the quantum of the penalty, with the only restriction being the maximum prescribed by law. The law does not provide 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 (such as, among others, the placement under electronic surveillance) to the penalty.
Furthermore, a basic principle of French law is that sentences are not consecutive: 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.