France adopts new bill to fight against corruption
To date, France’s anti-corruption policies have proved less effective than might be expected. In particular, no French company has so far been convicted in France for corruption. However, a new anti-corruption bill has recently been adopted.
Entry into force of the bill
The Projet de loi relatif à la transparence, la lutte contre la corruption et la modernisation de la vie économique, introduced by French Minister Michel Sapin, was finally adopted in November 2016 by the French Parliament. It was then scrutinized by the Constitution Court and the amended text entered into force on 11 December 2016.
By defining new standards of transparency for companies operating in France the “Sapin II bill” aims to address corruption more actively than previously.
Deferred Prosecution Agreements
In order to avoid lengthy court proceedings, the “Sapin II bill” introduces a new sanction mechanism known as the Deferred Prosecution Agreement (convention judiciaire d’intérêt général).
When under investigation or when facing prosecution for corruption, companies will be offered the opportunity to enter into a settlement with the Prosecutor that imposes a financial penalty instead of criminal sanctions.
Though the effectiveness of DPAs is yet to be demonstrated they are clearly a step forward in improving France’s anti-corruption policies.
Creation of an anti-corruption agency
For the purposes of this bill, extensive powers will be vested in a new anti-corruption Agency formed of approximately 70 people (Agence française anti-corruption).
The Agency will provide companies with guidelines on implementing internal anti-corruption procedures, and ensure that companies meet the applicable compliance requirements.
Not only will the Agency have a significant role in the prevention of corruption, but it will also have the authority to impose financial penalties against companies.
Implementation of a whistleblowing mechanism
The “Sapin II bill” will require all companies with more than 500 employees, or companies belonging to a group with more than 500 employees with a revenue higher than 100 million euros, to take preventive measures so as to enable both internal and external whistleblowing (lanceurs d’alerte).
Employees will now, therefore, be in a position to report any suspected fraudulent activity by its company.
Whistle-blowers will benefit from a special protection status from the anti-corruption Agency to ensure they are not penalised by the company for reporting any fraudulent activity.
Establishment of an anti-corruption compliance programme
Companies will be required to implement compliance programmes, establishing codes of conduct, in order to raise awareness among employers and employees (programmes de mise en conformité).
Such programmes will impose sanctions for non-compliance and their effectiveness will be audited by the anti-corruption Agency.
Ince & Co France can assist French companies in designing and implementing an effective compliance regime suitable for their business.