France has been for a long time lagging behind on the field of anti-corruption laws. In 2012, the Organisation for Economic Co-operation and Development raised serious concerns regarding the lack of bribery convictions in France, and stated that France should intensify its efforts to combat the corruption.
This is about to change radically: France has just started examining new draft legislation on the fight against corruption. Discussions before the French Parliament are expected to begin in April 2016, but one could already understand that this is going to be a milestone event in the French history of anti-corruption laws. And a legal revolution. The draft legislation, which has not been publicised yet, is about to be presented to the French State Council (Conseil d’Etat) for legal validation. The legislative process will only start afterwards.
Creation of a proper anti-corruption national agency The French draft legislation foresees the creation of a national anti-corruption agency that will replace the Central Service for the Prevention of Corruption (SCPC) at the Ministry of Justice. This stands as a substantial change in the French anti-corruption regulatory landscape as the SCPC had no investigation and fining powers. The agency would be in charge of sorting out the reports made by whistle-blowers and carrying out related appropriate investigations. It would also be responsible for monitoring the implementation of a specific compliance program. Most importantly, it is expected to be invested with powers of sanctions.
Mandatory requirement of implementation of a compliance program Unprecedentedly, the French law will not only sanction the bribery offence, but will also preventively impose a positive obligation on French companies to implement a compliance program. This is the first clear sign of a legal revolution. The influence of the UK Bribery Act is obvious here. However, the draft legislation targets companies with at least 500 employees and a yearly turnover above €1 million. It is unclear whether these criteria will be alternative or cumulative.
Like the UK Bribery Act, the draft legislation contemplates introducing a criminal offence of failing to implement a compliance program: this could constitute an additional sanction in case of conviction for corruption. The overall process will be monitored by the above-mentioned anti-corruption agency.
So far, whether the draft legislation will contain guidelines similar to those set forth by the UK Bribery Act is unclear.
The implementation of “Sunshine” requirements all across the board: the publication of links of interests with lobbyists A major particularity for the French draft legislation is that it contemplates the creation of a national register of lobbyists. This move is clearly inspired by the French Sunshine Act, according to which French pharmaceutical companies are required to disclose their links with health care practitioners. However, the scope of the draft legislation is much broader, as it aims at involving any industry.
As of today, the draft legislation requires that the representatives of interest groups disclose their identity and the scope of their lobbying activities to the High Authority for transparency in public life (Haute Autorité pour la transparence de la vie publique). This authority is already in charge of receiving, controlling and publicly disclosing the statements of assets of the highest-ranking elected and appointed public officials. Similarly, such information related to the lobbying activities intends to be listed on an online publicly available website.
It is, however, unclear as to who will fall into the definition of a “group of interest”, as it is unclear as to who will be the persons with whom these links will be targeted: the French legislation does not only cover its current state government officials. Likewise, there is no clarity yet about the “links of interest” which will be covered: will it be, like for the French Sunshine Act, agreements such as consultancy agreements, and/or so-called “advantages” that cover the Health care regulation meals, as well as hospitality and gifts?
A true legal status for whistle-blowers The absence of a whistle-blower status was an important lack of the French law which had the consequence of creating an unclear legal framework for whistle-blowers. This can be seen as the first of the two major obstacles that have, as of today, caused ethical hotlines to be disregarded by French employees. The second obstacle is still cultural.
The draft legislation intends to create a legal status for whistle-blowers that would prohibit any dismissal or discrimination of the whistle-blowers in a case where their statements had been relied on by the national anti-corruption agency. They would also be eligible for free legal assistance under the foreseen status.
Possibility of signing off-setting agreements in case of prosecution Another significant change is that French companies which would be convicted for corruption could negotiate with the public prosecutor in order to pay an agreed fine instead of being criminally pursued. This represents another legal revolution in France as it opens the way of negotiating fines with the public prosecutor, as it is done in particular in the United States and the United Kingdom. As things stand today, there is no legal framework for such discussions with the public prosecutor. However, such possibility already exists under French competition law with the leniency program under which companies are encouraged to own up to cartels, since they can be granted either an immunity from prosecution or a reduction of up to 50% of the applicable fines.
Inspired from the Anglo-Saxon model, the introduction of this off-setting agreement breaks the French secular tradition with, on the one hand, the interests of the defendant, and on the other hand, the judicial investigation.
A dissuasive fining arsenal The aforementioned legal mechanism can only work if the sanctions associated with the corruption charges are important. This is not the case as of today, at least compared with the record fines in the United States or the UK in particular. This seems about to change with the draft regulation which contemplates fines up to 30% of the company turnover, which is rather dissuasive.
Applicability of the French law to bribery offence committed in foreign countries Finally, the draft legislation sets forth the extraterritoriality of the French anti-corruption law by facilitating the prosecution of corruption-related offences committed abroad. This will in practice raise concerns related to conflicts of laws.
In any case, a real legal revolution seems to be underway in France. The French Bribery Act will be a major piece of international anti-corruption legislation in 2016.
Client Alert 2016-044