The Enforcement Committee concluded that the provisions of the Sapin II Law were not violated.
The Enforcement Committee of the French Anticorruption Agency ("FAA") handed down its first decision on July 4, 2019. The decision follows the Agency's three-month audit (October to December 2017) of the involved company's compliance program.
The FAA brought the case to the Enforcement Committee, asserting that the company's compliance program did not meet the requirements set forth in France's landmark anticorruption legislation, referred to as the Sapin II Law. In its long-awaited decision, however, the Enforcement Committee concluded that the company did not violate the provisions of the Sapin II Law.
Extensive Powers of the FAA
Before ruling on the merits of the case, the Enforcement Committee confirmed that the FAA may require that a company under audit disclose any "useful" documents and information, including documents and information predating the effective date of article 17 of the Sapin II Law—June 1, 2017. The Enforcement Committee also confirmed that the FAA is entitled not only to establish the existence of a corporate compliance program but also to audit the program's effectiveness.
Five Alleged Breaches
The FAA charged the company with five violations of the Sapin II Law:
- A deficient methodology to craft the anticorruption risk map;
- A lack of concrete examples of prohibited behaviors in the company's code of conduct;
- The failure to deploy effectively the third-party evaluation procedure;
- The failure to update documentation related to accounting control measures; and
- The absence of a specific mechanism to evaluate the compliance program.
The FAA's Failure to Establish the Alleged Violations
Unlike the FAA, which based its assessment on the company's compliance program as of the time of the audit (October 2017), the Enforcement Committee took into account the compliance program as it existed at the time of the administrative hearing on the alleged violations (June 2019). In dismissing the allegations, the Enforcement Committee noted that the program had gradually improved between 2017 and 2019, and that the company had made continuous efforts to update and deploy the program.
Furthermore, the Enforcement Committee pointed out that the FAA's guidelines on effective compliance programs are not binding. As the Enforcement Committee elaborated, however, if a company chooses to depart from these guidelines, it will have to justify the appropriateness of the methodology it used in implementing the program and demonstrate the program's overall effectiveness.
Click here for the FAA's decision.