France catches up with UK and U.S. anti-bribery laws: significant reform underway
A significant revamp of French anti corruption laws is underway. If adopted, the "Sapin II" bill (named after the Minister of Finance, Michel Sapin) will place companies under heightened compliance standards and within the ambit of a new regulatory body.
The "Sapin II" bill, which was adopted by the French Assemblée Nationale on 14 June 2016 and is currently being examined by the Sénat is likely to make four major changes.
New obligation to implement anti corruption compliance programmes
A corporation with at least 500 employees and grossing yearly revenue in excess of EUR 100 million (or which is part of a group of companies with at least 500 employees and whose turnover exceeds EUR 100 million) will need to have a compliance and self monitoring programme aimed at detecting and preventing potential corrupt practices. This would involve the implementation of an internal code of conduct, an early warning system against failures to comply with this code, a disciplinary regime for sanctioning such non-compliance, a mapping of the firm's exposure to corrupt practices, training of corporate officers and the operation of internal know your customer/intermediary policies. Compliance responsibility will lie not only with the corporation but also with senior management.
New French Anti Corruption Agency
There will be a new Agence française anticorruption with broad powers to investigate, detect and prevent corrupt practices and influence peddling (on site inspections, staff interviews, etc). Firms will have to disclose any documents requested by the Agency. Its powers would include drawing up recommendations and monitoring a firm's compliance with the new law. The Agency would also be able, via its Enforcement Committee (Commission des sanctions) to compel the implementation of compliance measures, issue sanctions (such as warnings and reprimands) and levy fines for failure to comply with the new law of up to EUR 200,000 for individuals and EUR 1 million for corporations.
New settlement opportunities for corporations under investigation for acts of corruption or influence peddling (convention judiciaire d'intérêt public)
Such a settlement could include: (i) a criminal fine (amende pénale d'intérêt public) of up to 30% of a firm's average annual turnover over the past three years; (ii) an obligation to implement a compliance programme aimed at preventing and detecting acts of corruption or influence peddling for up to three years; (iii) an obligation to compensate victims for any harm suffered. After being approved by a judge, the settlement would prevent any further criminal proceedings unless the settlement is breached. The concept is very similar to U.S. and UK deferred prosecution agreements. Victims can still initiate civil actions for damages. Although the settlement would not be considered as a criminal conviction, it would be published on the new French Anti Corruption Agency's website alongside its approval and the amount of the criminal fine.
More protection for whistleblowers in the financial sector
The new law means that the Autorité des Marchés Financiers and the Autorité de Contrôle Prudentiel et de Résolution must set up new procedures to enable whistleblowers to report potential breaches of legal or regulatory duties by professionals acting under the supervision of the French financial market and banking regulators (ie banks, payment institutions, insurers, investment service providers, investment advisors, clearinghouses, central securities depositories, etc). These regulated entities will need to implement similar internal procedures enabling staff to report potential breaches of professional rules, and would be under a duty to ensure that a whistleblower is not discriminated against in decisions to hire, fire or promote personnel within the organisation.
Allen & Overy Paris will be closely monitoring further developments regarding the Sapin II bill, and can help businesses design internal compliance regimes that are compliant with the new French requirements, plus the UK and the U.S. (if applicable).