French legislation known as the Sapin II bill will change the legal framework for prevention and prosecution of corruption in France after its anticipated adoption by the end of the year. The final text has not yet been authorized, but the new provisions will most likely require, for the first time, companies that conduct business in France to implement anti-corruption compliance programs. These programs will be similar to those implemented by UK and US companies. This will be particularly important with the addition of a new, strengthened anti-corruption French agency monitoring the effectiveness of these compliance measures. In addition, the legislation has new protections for whistleblowers who report corruption in France.
France has long participated in international efforts to fight corruption and bribery. France is a signatory to several anti-corruption conventions, including the UNCAC, the OECD Anti-Bribery Convention, the Council of Europe Criminal Law Convention on Corruption and the Council of Europe Civil Law Convention on Corruption, and is a member of the Council of Europe Group of States against Corruption (GRECO). After the OECD was critical of France's lack of prosecution of foreign bribery in 2012 and again in 2014, there was much attention to creating legislation to prosecute international corruption. According to the 2012 OECD report, only five convictions (and only one of those against a company) had been handed down in the previous 12 years. In 2014, the European Commission also published an “EU Anti-Corruption Report” urging the member states to create efficient mechanisms. The French institution tasked with combatting corruption, the Service Central de Prévention de la Corruption (SCPC) joined the call for new legislation in 2013 and published guidelines in 2015 encouraging companies to set up compliance programs to fight against corruption.
The Sapin 2 draft bill, named for French Minister of Finance Michel Sapin, was passed by the National Assembly in June and was modified and passed by the Senate at the beginning of July. A final version of the bill should be voted on by the National Assembly and then enter into force before the end of 2016, so the terms of the legislation may change before they are finalized.
The French legislation addresses a number of areas, but the most significant to companies are 1) creation of a French anti-corruption agency with more powers than the current SCPC; 2) protection of whistleblowers; 3) a corporate duty to prevent corruption and penalties for failing to implement a compliance program; 4) a new criminal offense for corruptly influencing foreign public agents; and 5) a legislatively created option to use a deferred prosecution agreement (DPA) with companies in lieu of criminal prosecution. This French DPA exists in both versions of the Bill but the terms differ and are still subject to debate, so its future in the final legislation is unclear.
The bill focuses on French companies' obligations to prevent corruption by forcing them to put in place compliance programs, many for the first time. Criminal penalties are provided for failing to do so. Under the current version of the bill, a company whose head office is situated in France, employs at least 500 employees in the company or in the subsidiaries, and has a turnover exceeding 100 million euros (in the previous two years), would need to implement the following:
- A code of conduct that defines and illustrates prohibited acts and behaviors;
- An internal whistleblowing system;
- A corruption risk map reflecting major clients, intermediaries, business sectors and geographical areas;
- A system of internal accounting controls to support and monitor compliance with internal rules;
- A training system for executives and those personnel most exposed to corruption risk; and
- Disciplinary sanctions for breach of internal rules.
For many French companies, this will be the first time that they are required to implement an anti-corruption compliance program. For guidance, they could look to lessons learned by US and UK companies facing similar compliance hurdles in the past decade. One lesson learned is to not wait for a problem to arise before building an anti-corruption compliance program. The sooner built, the sooner the program will have more time to grow from the design stage into real maturity and effectiveness, making it more likely to prevent a problem from happening in the first instance, or to prevent a small problem from growing into a bigger one.