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Anti-Corruption Law: a Major Bill for France 1 Anti-corruption law: a major bill for France 1 Briefing note February 2016 Anti-corruption law: a major reform for France's anti-corruption legislation As the target of significant criticism from the Organisation for Economic Co- operation and Development (OECD), France must strengthen its approach to combat bribery and corruption. "Sapin II", a draft bill on transparency, anti- corruption and economic modernization, introduces a new framework legislation to prevent, detect and punish corruption in France and abroad. Disciplinary sanctions for breach site investigations, and assume an New measures to of internal rules. intermediary role for whistleblowers While many French companies had by reporting allegations directly to the prevent corruption already adopted efficient measures to public prosecutor. Among its many objectives, the prevent and detect corruption, these proposed legislation will create an nonetheless remained with the "soft obligation for companies (as defined law" of a self-regulated framework. Contours of the below) and their senior management As part of the bill's innovation, French Reform to prevent bribery and risks of companies will be required to corruption implement these measures under the The creation of an obligation This duty will apply (i) to companies close supervision of a new national for large French companies to which employ over 500 employees, agency against corruption (the prevent risks of corruption (ii) to companies belonging to a group "Agency"), invested with many through a duty to implement which employs over 500 employees missions to detect and prevent efficient internal measures. and has a consolidated annual corruption in commercial transactions. The creation of a national revenue of at least EUR100 million Under Sapin II, the new Agency will agency with powers to detect (as well as their directors). Fulfilment replace France's Central Service for and punish failures to of this obligation will force companies the Prevention of Corruption ("Service implement corruption to adopt efficient anti-corruption central de la prevention de la prevention measures. internal procedures including: corruption). Created in 1993, with no A code of conduct that defines investigative or prosecutorial powers, The creation of administrative prohibited acts and behaviours; this entity has little to no enforcement and criminal sanctions imposed and monitored by An internal whistle blowing authority. Unlike its predecessor, the Agency, which would be supervised the Agency. system that enables employees under the joint authority of the French to report code of conduct The possibility for prosecuted ministries for Justice and Finance, will violations; entities to enter into criminal have broader investigative and Due diligence procedures for the settlements with the French sanction powers to fight corruption company's clients and suppliers; authorities, similar to deferred and to impose heavy sanctions for prosecution agreements used Accounting control systems to breach of compliance procedures. For in the US and the UK. avoid fraud, including acts of instance, to fulfil its missions, the concealment or influence Agency will be empowered to obtain peddling; documents of all kinds, conduct on- 2 Anti-corruption law: a major bill for France In addition, the new legislation also New repressive introduces new administrative and measures judicial compliance-related sanctions. First, under Sapin II, the Agency's A first under French law, Sapin II will enforcement committee can impose also introduce the possibility for heavy administrative sanctions to prosecuted entities to enter into companies with internal anti- criminal settlements (called corruption procedures deemed "Convention de compensation insufficient or ineffective. These d'interêt public") with the French sanctions can include fines for up to authorities for allegations of EUR 1 million for the company, and corruption. As part of the settlement EUR 200,000 for individuals, as well agreement, criminal charges would be as injunctions to force the company to dropped by the French authorities in implement effective compliance exchange for (i) the payments of fines programs within a period of time that by the prosecuted entity, and (ii) cannot exceed 3 years. compliance commitments monitored by the Agency or a period that cannot Second, similar to the monitorship exceed 3 years. Under the proposed instated by US authorities, a company law, the settlement agreements will convicted for acts of corruption may need to be ratified by the French face additional criminal sanctions, Court of First Instance. Although the including the obligation to implement, judge's ratification will effectively at its own expense, and within a terminate the criminal prosecution maximum of three years, effective (provided that the entity complies with compliance programs in line with its commitments under the guidance published by the Agency. settlement), it will not extinguish the Fulfilment of these obligations will be possibility for victims to bring civil monitored by the Agency. claims against the entity. In addition to these key measures, Last, the settlement agreement will Sapin II also introduces an offense of not be registered in the entity's influence peddling for foreign officials. criminal record. However, the Agency If entered into force, Sapin II's radical will be entitled to issue a press reforms may raise France's anti- release published on its website. corruption legislation to the same level as other European countries. Distinctively different from the current system in France, which only provides The proposal will be presented to the for a specific guilty plea agreement Council of Ministers on 23 March 2016, before it can be examined by procedure that occurs after criminal the French National Assembly and proceedings have already been Senate. It is expected to enter into initiated, and which imposes a final force over the course of the year. conviction registered in the entity's criminal record, this new settlement is more similar to deferred prosecution agreements used in the United States and, as of recently, in the United- Kingdom as well. Anti-corruption law: a major bill for France 3 Authors Thomas Baudesson Charles-Henri Boeringer Matthieu Juglar Partner Counsel Lawyer E: thomas.baudesson E: charles-henri.boeringer E: matthieu.juglar @cliffordchance.com @cliffordchance.com @cliffordchance.com This publication does not necessarily deal with every important topic Clifford Chance, 1 rue d'Astorg, CS 60058, 75377 Paris Cedex 08, or cover every aspect of the topics with which it deals. It is not France designed to provide legal or other advice. © Clifford Chance 2016 Clifford Chance Europe LLP est un cabinet de solicitors inscrit au barreau de Paris en application de la directive 98/5/CE, et un limited liability partnership enregistré en Angleterre et au pays de Galles sous le numéro OC312404, dont l'adresse du siège social est 10 Upper Bank Street, London, E14 5JJ. www.cliffordchance.com Abu Dhabi ■ Amsterdam ■ Bangkok ■ Barcelona ■ Beijing ■ Brussels ■ Bucharest ■ Casablanca ■ Doha ■ Dubai ■ Düsseldorf ■ Frankfurt ■ Hong Kong ■ Istanbul ■ Jakarta* ■ London ■ Luxembourg ■ Madrid ■ Milan ■ Moscow ■ Munich ■ New York ■ Paris ■ Perth ■ Prague ■ Riyadh ■ Rome ■ São Paulo ■ Seoul ■ Shanghai ■ Singapore ■ Sydney ■ Tokyo ■ Warsaw ■ Washington, D.C. *Linda Widyati & Partners in association with Clifford Chance. Clifford Chance has a best friends relationship with Redcliffe Partners in Ukraine. .
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