The French Ministry of Finance is scheduled to introduce new anti-bribery and corruption laws under the Sapin II Bill (“Sapin II” or the “Bill”) later this year. The new proposals intend to overhaul France’s current anti-bribery and corruption system by introducing a corporate duty to maintain an adequate compliance programme, a new anti-corruption agency to oversee compliance with the new requirements, increased support for whistleblowers, and the removal of certain barriers to prosecuting companies for overseas offences. In addition to their requirements under the U.S. Foreign Corrupt Practices Act (the “FCPA”) and U.K. Bribery Act, global companies that operate in France may need to review their compliance policies to ensure that they meet these new French requirements.
France has been criticised in the past by organisations such as Transparency International and the Organisation for Economic Co-operation and Development and for its low level of corporate prosecutions for bribery and corruption offences, particularly when French companies such as Alstom, Total SA, and Technip SA have accounted for some of the highest value FCPA settlements in the United States.
Sapin II proposes the following key changes to the anti-bribery and corruption regime in France.
- A duty to maintain an adequate compliance programme – This duty applies to companies that employ at least 500 employees (or that are part of a group with at least 500 employees) and have an annual gross profit exceeding EUR 100 million. Companies affected will have to implement a compliance programme which includes a code of conduct, a procedure for receiving and handling whistleblower complaints, accounting controls, and training for employees. The duty also applies on an individual level to senior management of such companies. Failure to implement an adequate compliance programme may result in financial penalties (maximum EUR 200,000 for senior management and EUR 1 million for companies).
- Creation of an anti-corruption agency – Unlike the existing Centre Service for the Prevention of Corruption which has no investigative powers, the new National Agency for the Detection and the Prevention of Corruption (the “Agency”) which will replace it is currently proposed to have powers of investigation, though its powers to impose penalties continues to be a subject of debate between French legislators.
- Prosecution of overseas offences – France’s current system has been criticised for its dual criminality requirements for the prosecution of offences committed overseas. Under the current model, there are two requirements before French prosecutors can launch an investigation into bribery committed outside France: (i) the overseas offence must be an offence in both the foreign jurisdiction in which it was committed and under French law; and (ii) the relevant overseas authority must notify the French authorities of the overseas offence. Sapin II proposes to remove these obstacles to the prosecution of extraterritorial misconduct.
- Greater protection and financial support for whistleblowers – In order to strengthen the whistleblower protections in France and adopt a more U.S.-style approach, Sapin II plans to formally prohibit retaliation against whistleblowers that provide information on misconduct to the Agency and ensure that financial compensation, such as the reimbursement of legal fees, is provided to whistleblowers by the Agency.
- Introduction of DPAs The Bill initially proposed an out-of-court settlement process similar to the DPAs used by U.S. and more recently U.K. prosecutors; however, this proposal was removed from Sapin II in March 2016 but continues to be the subject of ongoing debate.
Both houses of the French parliament, the National Assembly and the Senate considered the bill in their first readings in June and July respectively. The government has fast tracked Sapin II and thus a joint committee consisting of members of both houses of parliament will work to together to finalise the bill. A special parliamentary session is scheduled for September 26, 2016 during which the joint committee will present a version of the Bill to both houses for review. While the Bill continues to generate lively debate among policymakers and legislators in France, analysts expect the final version of Sapin II will be passed this year.