There will be further use of new enforcement powers in France, while audits of corporate compliance programmes may add detail to requirements.

In brief

  • With the Sapin II law now in force, the corporate crime enforcement landscape in France has changed beyond recognition.
  • 2018 will see further use of new powers for prosecutors and judges to deal with companies and more negotiated settlements are expected, including for bribery offences.
  • New requirements for companies to have compliance programmes in place will be enforced through audits, the first of which are already underway.

The impact of Sapin II

2017 saw France at last address the Organisation for Economic Cooperation and Development (OECD) and Group of States against Corruption (GRECO) recommendations to implement effective anti-corruption measures.

The Sapin II law, adopted in December 2016, seeks to promote transparency, fight corruption and modernise the economy. Changes required to comply with the new law have already begun in 2017, but 2018 will see important developments both within the French State and within companies operating in France, thanks to new anti-bribery compliance requirements.

New prosecution powers

2017 saw the creation of a national anti-corruption agency (AFA) and the strengthening of the State’s powers through the introduction of new negotiated settlements similar to deferred prosecution agreements. The first negotiated settlement was approved by the High Court in Paris on 14 November 2017, concluded between France’s Public Prosecutors’ Office and HSBC Private Bank Switzerland. It concerned allegations that HSBC enabled its French customers to evade €1.6bn tax, and the bank agreed to pay €300m as part of the settlement. 2018 will see further use of prosecutors’ and judges’ new powers to resolve allegations of financial crime, including in the anti-corruption sphere.

First audits by the AFA

For French companies with more than 500 employees and an annual turnover of over €100m euros, the provision of Sapin II with the most immediate effect is the requirement that they establish and implement anti-corruption compliance measures.

The obligations upon both the companies and their representatives consist of implementing:

  • a code of conduct
  • an internal whistleblowing procedure
  • a register of corruption risk for major clients and intermediaries (risk mapping)
  • a system of accounting control
  • a training system for executives and those personnel most exposed to corruption risk
  • an internal disciplinary penalty system, and
  • an internal system to monitor the implementation of the above measures.

Though the final versions of the AFA’s guidelines are not yet available, the agency has started to conduct audits on companies to check that they have implemented compliance plans in accordance with the new legal requirements. Half a dozen companies are said to be in the process of being audited. The results of these audits may provide useful hints as to what the AFA expects from companies and where it is focusing its attention. We expect to see more audits throughout 2018, with the real possibility of enforcement action where companies are found wanting.

Whistleblowing systems

There is also now an obligation upon companies employing more than 50 employees to create a whistleblowing hotline both for employees and third parties. Whistleblowers should first alert their managers (or other designated person within the company), then a public authority, and only as a last resort the public media. It is perhaps inevitable that more widespread access to whistleblowing facilities will lead to an increase in wrongdoing coming to light, but in 2018 we will see whether a cultural change in reporting is achieved.

Declarations for lobbyists

Lobbyists have to report their existence and the nature and financial scope of their activity to the High Authority for Transparency in Public Life (HATVP).

The aim is to make lobbying transparent to citizens, and to monitor conflicts of interests and influence peddling. The impact upon lobbying on behalf of industry will start to be felt throughout the coming year.

Crime, fraud & investigations: What to look out for in 2018