The draft bill relating to the fight against bribery and transparency in the economy seems to be finalized at last, in order to be presented to the Council of Ministers on March 23, 2016. It creates a duty to prevent bribery, an additional compliance-related penalty and a criminal settlement process (“convention de compensation d’intérêt public”, the “Settlement”), a French version of the deferred prosecution agreement.
I. The creation of a national agency for the prevention and detection of corruption
The system is based on the creation of a national agency (the “Agency”) invested with many missions.
The first mission of the Agency will consist in conducting risk mapping, defining a multi-year plan of fight against corruption and coordinating the French position in international forums. The Agency will also assume a supporting role (financial where necessary) for whistleblowers.
The second mission will involve public actors. The Agency will be responsible for issuing opinions on the integrity of public persons’ contractual counterparties and will guidelines on international procedures for detection of corruption in public institutions. It will control and advise public institutions on these issues.
The third mission will specifically target the economic operators. The Agency will issue guidelines relating to the newly instated duty to prevent corruption (detailed below) and will monitor compliance. It will be competent to assess the validity of the plans for prevention and detection of corruption which have been implemented, as well as the compliance programs. Finally, it will be responsible for monitoring compliance with the law No. 68-678 of July, 26, 1968 (the “blocking statute”) in relation to foreign compliance procedures.
The Agency will have extensive powers to fulfil its missions: it will be empowered to interview any person of its choosing, obtain documents of all kinds and conduct on-site verifications. It may obtain information regarding both prior court decisions and ongoing proceedings, inter alia in view of issuing opinions on the integrity of public persons’ contractual counterparties.
II. The introduction of a duty to prevent bribery
During the preparatory work, the creation of an obligation of prevention, which would be subject to criminal sanctions, was considered. Such mechanism – which would have resulted in the possibility of criminal conviction even where no acts of corruption were committed – was eventually dropped.
The latest draft has converted this offense into a breach of administrative rules. The duty to prevent risks of corruption will apply to companies employing at least 500 employees and to groups of companies employing at least 500 employees and having a turnover in excess of EUR 100 million (as well as to their directors). They will have to take measures to prevent and detect the commission, in France or abroad, of acts of corruption or influence peddling, namely:
- Adopt a code of conduct;
- Implement an internal whistleblowing mechanism;
- Establish risk mapping (regularly updated and detailing the risks of external requests);
- Implement a procedure to verify the integrity of clients, suppliers, partners and intermediaries;
- Carry out accounting controls;
- Provide training for the company’s executives and the most exposed employees;
- Implement disciplinary sanctions.
The Agency will issues guidelines, compiling best practices in order to guide companies in the implementation of this plan. In case of infringements, the Agency may issue formal notice to the company. It may also refer to the Sanction Commission. The latter may send compliance injunctions and impose penalties (up to EUR 200,000 for individuals and EUR 1,000,000 for legal entities, in addition to possible measures of publicity).
III. The creation of an additional compliance-related penalty
The compliance-related penalty (new Article 131-39-1 of the French Criminal Code) imposed for offenses of corruption or influence peddling will consist in an obligation to implement a compliance program under the control of the Agency, for up to three years. The costs relating to this measure will be borne by the offender (but may not exceed the amount of the fine applicable to the offence). A breach of the compliance program may result in heavy sanctions (two years’ imprisonment and a fine of EUR 400,000 or EUR 2,000,000 for legal entities, which may be increased up to the amounts provided for the initial offence, in addition to possible measures of publicity).
The text also provides for “taking into account” the existence of an anticorruption detection plan as a means of reducing the penalties applied to offenders in cases of corruption.
IV. The criminal Settlement process
As long as prosecution has not been set in motion (i.e. until the end of the preliminary investigation) the prosecutor may offer legal entities accused of offenses of corruption or influence peddling, a Settlement imposing the following obligation(s):
- The payment to the Public Revenue Office (possibly staggered over one year) of an amount proportionate to the profits arising out of the offense, within the limit of 30% of the company’s average annual turnover of the last three years;
- The implementation, under the supervision of the Agency, of a compliance program to ensure the existence and the implementation of the seven requirements listed above in relation to the duty to prevent bribery (code of conduct, whistleblowing mechanism…). The costs will be borne by the legal entity accused, and the plan may last three years.
If the legal entity accepts the Settlement, the prosecutor will refer to the President of the “Tribunal de grande instance” (Civil Court) for approval of the Settlement during a public hearing. The legal entity will have ten days to withdraw after approval. The approval order and the Settlement will be published (with a statement from the prosecutor) on the website of the Agency. The victim will retain the ability to claim compensation for his/her loss before the civil courts. The current draft does not provide for the admission of guilt as a prerequisite to this mechanism. Also, it does not include individuals in the Settlement and public prosecution shall only be precluded once all obligations have been performed (which may last three years), thus exposing companies to the risk of a simultaneous action launched in the meantime by the victim.
The project also provides for the creation of a digital index of the representatives of interests, in order to clearly identify the lobbyists.