In its report of October 23, 2012, the Organisation for Economic Co-operation and Development (the OECD) notes that law enforcement measures implemented by France in fighting international bribery are inefficient in light of the very low number of convictions handed down and the insufficiently dissuasive sanctions in place. Although the OECD underscores the steps recently taken by France in order to ensure the independence of the Public Prosecutor’s Office, it urges France to intensify its efforts and to impose harsher sanctions on legal persons in this area.
As suggested by the Circulaire of the Garde des Sceaux of February 9, 2012, the assessment of France by the OECD1 Working Group on international bribery points to the inadequacies of the French system as concerns combatting International Bribery. Despite a few technical criticisms, the OECD Report underlines the near compliance of the French legislative arsenal with the provisions of the “Convention on Combatting Bribery of Foreign Public Officials in International Business Transactions”. On the other hand, this report is extremely critical with respect to its implementation (1). The OECD urges France to pursue its efforts but also to amend its legislation to strengthen sanctions and intensify the fight against international bribery (2).
1. The OECD’s Main Criticisms of the French System
The examiners’ main criticism relates to the very low number of convictions handed down in French jurisdictions in respect of international bribery.
The Report points out that, since 2000, only 33 penal proceedings have been initiated on counts of bribery of a foreign public official and only 5 convictions have been handed down. Only one of them, not yet final, concerns a legal person, the Safran corporation, convicted by the Paris Regional Criminal Court on September 5, 2012 on charges of bribing a foreign public official and ordered to pay a fine of 500,000 euros. The OECD considers that the number of convictions handed down is insufficient in light of the exposure of French corporations. The examiners also decry the fact that 38 cases did not even give rise to the opening of an investigation in France, even though French corporations were subject to bribery proceedings commenced in foreign jurisdictions.
These figures should however be put into perspective considering the number of convictions handed down in foreign jurisdictions. According to the OECD2, on December 31, 2011, only 2 legal persons had been criminally convicted of bribing a foreign public official in the United Kingdom and 76 legal persons in the United States (28 in connection with “plea agreement” proceedings and 48 in connection with “deferred prosecution agreement” or “non-prosecution agreement” proceedings). Furthermore, these statistics do not account for current and ongoing investigations and proceedings that may relate to facts dating back to the past and may last several years.
Even though the OECD highlights the fundamental role of the Central Anti-Corruption Brigade (Brigade Centrale de Lutte contre la Corruption), it regrets that investigators do not have sufficient resources at their disposal.
The OECD examiners also fault French judicial authorities for not prosecuting parent corporations where subsidiaries have been found guilty of acts of bribery in foreign jurisdictions.
Above all however, the OECD considers that sanctions lack efficiency and are insufficiently dissuasive, notably due to the small amounts of fines and the fact that courts do not order additional sanctions such as the confiscation of the proceeds of the offence. The maximum amount of the penal fine applicable to the bribery of foreign public officials is 750,000 euros for legal persons in France, whereas it is unlimited in the United Kingdom and it is 2 million dollars per offence in the United States. In this regard, it should be kept in mind that penal and administrative fines handed out by United States authorities3 amount in many cases to a total of several tens of millions of dollars: a high-water mark of 1.7 billion dollars was reached in the case of Marubeni Corporation in connection with acts of bribery of foreign public officials in Nigeria.
The Report denounces the monopoly of the Public Prosecutor’s Office in bringing proceedings of bribery of a foreign public official, pursuant to the provisions of Article 435 6 of the Penal Code, and its central role in the conduct of proceedings, suggesting that this hampers the fight against international bribery. However, the Cour de cassation decided, in two recent judgments, that a non-governmental organization could institute proceedings as a civil party (and thus prompt public action) on grounds of abuse of corporate assets and involuntary manslaughter in connection with proceedings related to acts of international bribery, more specifically the cases known as “Biens Mal Acquis” and “Karachi”.
Finally, the OECD considers that the regime for defence secrecy and the superior interests of the State represent obstacles to proceedings.
2. The OECD Urges France to Strengthen and Intensify its Efforts Aimed at Combatting Bribery
Despite its virulent criticisms, the OECD underscores France’s efforts, including in connection with the Circulaires of July 314, and September 19, 20125 to strengthen the independence of the Public Prosecutor’s Office and put an end to the possibility for the Garde des Sceaux to give individual instructions in cases.
The Report salutes the development of French legislation that now makes it possible to seize and confiscate proceeds gained from bribery and to extend procedures based on prior acknowledgment of guilt to the offence of bribery of a foreign public official. The examiners welcome the fact that caselaw has postponed the starting point for the computation of time limits applicable to the offence of bribery to the date of discovery of the offence. The examiners also acknowledge efforts undertaken by the tax authorities to prohibit deductions of bribes paid abroad as well as the importance of TRACFIN, which has proved to be the starting point for several proceedings in international bribery.
Finally, the OECD welcomes the awareness raising and prevention campaigns aimed at fighting international bribery undertaken by large corporations and employers’ organizations. On the one hand, the examiners encourage large corporations to intensify their efforts, including within their subsidiaries abroad, and on the other hand, they encourage SMEs to implement compliance programs. Examiners urge the government to train its agents posted abroad in combatting bribery, as well as develop instructions for investigators, among other things by implementing tools enabling general Prosecutors to identify files likely to be referred to the Paris Regional Court, a jurisdiction specialized in fighting bribery.
In addition to these exhortations of a general nature, the OECD recommends that France amend its legislative system, in order inter alia to:
- Eliminate the requirement of dual criminality;
- Adopt a more flexible notion of the concept of foreign public official and a broader interpretation of the constituent elements of the offence;
- Strengthen applicable sanctions;
- Extend applicable time limits;
- Take measures to ensure that the regime for defence secrecy no longer represents an obstacle to prosecuting international bribery offences;
- Provide greater access to the criminal record of legal persons and ensure that parent corporations are held liable for acts of bribery committed by their subsidiaries abroad; and
- Provide victims with the opportunity of bringing civil suits so as to prompt public action.
The OECD mostly urges French jurisdictions to focus on the fight against bribery by handing out dissuasive sanctions, ordering preventative seizures and confiscating the proceeds of the offences.
The situation raises legitimate concerns in that the OECD Report could encourage public authorities to intensify their fight against bribery, for example by increasing the number of proceedings commenced and handing out harsher sanctions. Corporations should be aware of the reality of this risk and should implement compliance programs aimed at fighting bribery, including within their foreign subsidiaries.
Key points of the OECD recommendations
- Strengthen sanctions to make them more dissuasive;
- Pursue reforms underway to guarantee greater independence for prosecutors and provide adequate resources for investigators in corruption cases;
- Ensure that companies and their subsidiaries cannot avoid criminal liability;
- Clarify existing legislation to ensure that it is not interpreted by prosecutors as imposing requirements that go beyond those of the Convention;
- Ensure that the implementation of the regime for defence secrecy does not impede prosecutions; and
- Encourage reporting by the Central Anti Corruption Brigade to the Public Prosecutor’s Office of suspected cases of transnational corruption by raising awareness of the obligation to report and of the protections guaranteed for whistleblowers.