Justice Reform: the main features of proposed judicial reforms
French Prime Minister Jean Castex and French Minister of Justice Eric Dupond-Moretti have presented a bill to the French Parliament intended to restore "confidence in the Judiciary" (the "Justice Reform"). This bill contains several reforms, following from a report issued in February 2021. In particular, the Justice Reform includes tighter control over criminal investigations conducted by the police (enquêtes préliminaires), which would (i) be limited to two years from the first investigative action, extendable for no more than one year by decision of the public prosecutor (this possibility is currently unlimited); and (ii) expand the ability of those accused and their counsel to access the case file during these investigations. The Justice Reform also aims to offer better protection for legal privilege. The bill is to be examined at the end of May 2021. [14 Apr 2021]
The European Public Prosecutor's Office is willing to start its investigations on 1 June 2021
The European Public Prosecutor's Office (EPPO) has announced that it is willing to start its work from 1 June 2021. Initially, the EPPO planned to start its work on November 2020 but the deadline has been postponed due to the coronavirus crisis and delays in the appointment of European Designated Prosecutors (EDPs) within EU Members States.
With respect to France, four EDPs have already been appointed by the EPPO (five in total should be appointed). [7 Apr 2021]
AFA 2020 Report
The French Anticorruption Agency (AFA) has published its annual report for 2020, containing an overview of its regulatory activity and some key figures. For example, despite reduced auditing in 2020 due to the coronavirus crisis, the AFA initiated 29 new inspections of private sector companies under the Sapin 2 Law (there have been 84 such inspections since the AFA was created in 2017). The new inspections in 2020 included 11 in companies across the water and insurance sectors according to the new sector-based approach promoted by the AFA. After a review of the state of progress with company anticorruption compliance programs, the AFA noted that because small, medium, and mid-sized companies "do not always have the resources or the expertise necessary to implement effective anticorruption compliance programs" it will "step up its actions aimed at them".
The AFA's report also states that 298 whistleblowing reports were received in 2020. Only one of these was considered serious enough to be forwarded to the public prosecutor's office, however two other reports were issued by the AFA in 2020 on the basis of evidence gathered in the course of its inspections, meaning that a total of 14 reports have been issued by the AFA since 2017.
According to the 2020 annual report, the AFA also concluded a number of cooperation agreements with other French public authorities, such as the police investigations departments and several public prosecutors’ offices. [31 Mar 2021]
Bolloré Group fined €12 million in Togo corruption case
The Paris criminal court has approved a CJIP agreement (convention judiciaire d’intérêt public – the French equivalent of a DPA) between the Bolloré group and the National Financial Prosecutor’s Office (PNF) in lieu of prosecution for corruption. The company agreed to pay a EUR 12 million fine for allegedly having undercharged the Togo government for consultancy work in return for a contract to manage the port of Lomé between 2009 and 2011. Since individuals are not eligible for a CJIP, group chairman Vincent Bolloré and two senior executives, Gilles Alix and Jean-Philippe Dorent, had negotiated a separate guilty plea with the PNF (a comparution sur reconnaissance préalable de culpabilité – CRPC).
However, the plea required confirmation by the Paris criminal court, which chose instead to reject the deal. The court found that the alleged acts had “seriously undermined economic public policy [and] the sovereignty of Togo”. The court therefore said a trial should be held. Since passage of Law No 2019-222 of 23 March 2019, the French Criminal Procedure Code has allowed the courts to refuse to accept a guilty plea if they believe that "the nature of the facts, the personality of the accused […] or the interests of society justify an ordinary criminal trial".
Please note that the proceedings were referred back to the investigating judge (juge d’instruction) by the PNF with respect to the individuals while the CJIP (with respect to the legal person) is currently being appealed on formal grounds before the French Cour de cassation. [26 Feb 2021]
Decision handed down by the Versailles Court of Appeal on the jurisdiction to award preventive actions in respect of French Vigilance Law
In one of the first legal actions in respect of Law No. 2017-399 of 27 March 2017 on the duty of vigilance (the Vigilance Law), initiated in October 2019 against a major French group, several associations and NGOs have filed summary proceedings before the Nanterre Judicial Court (a civil court) against the parent company of this group, on the basis of the Vigilance Law, for failure to comply with its due diligence obligations.
In a decision dated 10 December 2020, the Versailles Court of Appeal considered that there was a direct link between the due diligence plan, its establishment and implementation, and the management of the commercial company in its operations, concluding that the commercial courts held jurisdiction. Consequently, it referred the case back to the Nanterre Commercial Court.
In the context of another legal action initiated in January 2020 against the same French group, the Pre-Trial Judge of the Nanterre Judicial Court, by way of an order dated 11 February 2021, rejected the argument of lack of material jurisdiction, recalling that non-commercial plaintiffs benefitted from the right to choose between commercial and non-commercial courts to initiate legal action against companies. An appeal against this second decision was lodged.
These two contradictory decisions reveal the questions that remain on the substance of the duty of vigilance and the related legal proceedings. Recently, in April 2021, in the context of the Climate Bill, the French Parliament (Assemblée Nationale) adopted several amendments establishing that the competent jurisdiction for duty of vigilance matters would be determined by decree. The French Government indicated that the judicial courts of Paris and Nanterre would certainly be designated as those competent in the matter.
As mentioned elsewhere in this update, there are currently similar initiatives underway at EU level. [11 Feb, Apr 2021]
French government introduces Climate Bill to promote stronger environmental justice
The French Government has introduced a bill "to combat climate change and increase resilience to its effects" (the "Climate Bill"). This bill aims, inter alia, to strengthen criminal penalties for environmental damages; in particular by creating an offence of water and air pollution, and the introduction of a gradation of penalties incurred according to the intentionality of the actions and the seriousness of the damage related to this offence (intentional behaviour leading to serious and lasting damage to the environment would be referred to as "ecocide", and be punishable by aggravated penalties of up to ten years' imprisonment and a fine of up to €4.5 million). The Climate Bill is intended to be passed by May 2021, for final adoption latter this year. [10 Feb 2021]
Release of the new French Anti-Corruption Agency’s guidelines
New guidelines of the AFA have been published in the French Official journal. They follow a public consultation on the initial draft of the text which took place by the end of 2020, in which more than 40 private and public entities participated. The new guidelines differ significantly from those published in December 2017 in that they are more prescriptive and formalistic than the previous version. They incorporate (i) lessons learned by the AFA in the course of the inspections it has been conducting for over three years, (ii) certain principles already identified by the AFA in its publications, and (iii) a number of clarifications contributed by the Sanctions Committee in its first two decisions (as a reminder, Herbert Smith Freehills has successfully advised distribution giant Sonepar in 2019, in the first of these two cases, at the end of which the AFA confirmed that Sonepar was fully compliant with the requirements of the Sapin 2 Law).
The structure of the guidelines has been substantially modified. The first part is devoted to general provisions through the presentation of the three essential pillars of an anticorruption compliance program: (i) management commitment to ethics and compliance, (ii) corruption risk mapping and (iii) management of corruption risks through other measures and procedures to prevent and detect corruption. The second part describes these provisions for private actors subject to the obligation to prevent and detect corruption (according to Article 17 of the Act of 9 December 2016, known as the "Sapin 2 Law") and the third part is dedicated to public actors.
These guidelines will be applicable to inspections initiated by the AFA from July 2021. [12 Jan 2021]