November 10, 2016
On November 8, 2016, the French Parliament adopted a new major statute on transparency, the fight against corruption and the modernization of the economy, better known as the "Sapin 2 Law", by reference to the first Sapin Law of 1993 which improved transparency in politics and public procurements.
With this new statute, broadly inspired by the US and UK regimes, France intends to comply with the highest international standards in the areas of transparency and anti-corruption. The new statute also has an important extraterritorial reach as it provides French criminal courts with the ability to prosecute acts of corruption committed outside of France.
- Creation of the French Anti-Corruption Agency. The French Anti-Corruption Agency will replace the current Central Service for the prevention of corruption. It will have extended powers to control application of the new rules and enforce them. The Agency will include an Enforcement Commission ("commission des sanctions") vested with disciplinary powers and the ability to fine non-compliances (which are in addition to the existing criminal sanctions). The Agency will also assist French corporations in implementing the new arsenal by releasing recommendations.
- Corporations must implement adequate procedures to prevent and detect corruption and trafficking in influence. Corporations (including their subsidiaries), with at least 500 employees and an annual turnover exceeding €100 million, will be required to implement a corruption prevention plan. It will include an internal reporting system, a risk mapping of external solicitations for corruption purposes to which the corporation may be exposed, a code of conduct and training programs for employees most exposed to corruption risks. This risk mapping will be key. It will need to be adapted to the industries and countries in which the corporation operates as well as to its clients, suppliers and intermediaries. It will need to be regularly monitored to take into account changes in business and risks. In addition, appropriate internal control procedures will need to be applied. These will likely require implementation of three types of processes (i) controlling operations, (ii) risks monitoring and managing and (iii) documenting internal controls to ensure compliance traceability.
- Reinforcement of whistleblowers’ protection. The new statute strengthen the protection offered to whistleblowers. It requires the implementation of reporting procedures maintaining the strict confidentiality of the whistleblower. It offers an increased protection against retaliation. It provides, under certain conditions, whistleblowers with financial assistance. It extends whistleblowing protection to situations where the whistleblower has reported "a serious threat or damage to the public interest" and not only a violation of applicable laws.
- New extraterritorial reach of French anticorruption laws. The Sapin 2 Law considerably extends the jurisdiction of French criminal courts. It enables them to prosecute acts of corruption committed abroad by anyone who "carries on its business or a part of its business in France". This will need to be taken into account by foreign companies who conduct even part only of their business in France.
This new regime should definitively contribute in further fighting the criminal risk of corruption within French corporations but also foreign corporations conducting part of their business in France.
The following Gibson Dunn lawyers assisted in the preparation of this client update: Benoît Fleury, Clarisse Bouchetemblé and Manon Lafond.
Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. For further information, please contact the Gibson Dunn lawyer with whom you usually work or any of the following members of the Paris office by phone (+33 1 56 43 13 00) or by email (see below):
Nicolas Baverez ([email protected])
Jérôme Delaurière ([email protected])
Benoît Fleury ([email protected])
Bernard Grinspan ([email protected])
Ariel Harroch ([email protected])
Patrick Ledoux ([email protected])
Judith Raoul-Bardy ([email protected])
Jean-Philippe Robé ([email protected])
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