Newsletter | Volume 1

France has been the target of significant criticism from the international community for perceived weak and infrequent bribery and corruption prosecutions resulting in a significant increase in acquittals, dismissals and case closures in recent years.

Perhaps inspired by the FCPA approach to unearthing the FIFA corruption scandal, the French oversight authorities have presented the framework of legislation that would create a new anti-corruption authority and introduce U.S.-style monitorships into French law.

Compliance enforcement program to avoid sanctions
Now not for long the French government can be perceived as a laissez-faire type of bribery and corruption enforcement. The change is probably a response to the severe sanctions imposed by the U.S. Department of Justice against French companies.

In future French companies (and international companies doing business in France) must prepare and implement an effective anti-corruption compliance program to mitigate enforcement risk and avoid sanctions.

For many years, the Organisation for Economic Co-operation and Development (OECD) has reiterated that France was not in compliance with the OECD Anti-Bribery Convention. Other global oversight authorities have expressed serious concerns with France's enforcement approach. Ins, spite of the repeated reminders to tighten the corruption grip the enforcement situation had not materially improved and France, was blamed for having neglected or mishandled the implementation of the OECD's and other recommendations.

France is the primary target of U.S. scrutiny
According to a new report from Transparency International published last month,[3] which classifies member countries of the OECD Anti-Bribery Convention into four groups ranked by enforcement environment, only four of 41 member countries are considered to have made a robust commitment to investigate actively and prosecute companies that bribe foreign officials. France has perennially ranked in the next-to-lowest tier, reserved for countries with "limited enforcement"; foremost among the reasons cited in the latest report is France's excessive leniency in applying sanctions.

The extraterritorial reach of the U.S. Foreign Corrupt Practices Act (FCPA) and now the UKBA has enabled prosecutors and regulators to sanction foreign companies and individuals for corruption on a global scale. France has been the primary target of particular U.S. enforcement scrutiny, with three of the ten largest FCPA enforcement actions involving French companies.

Enact a new anti-corruption authority
Here are the highlights of the French guidelines to help companies implement and develop effective policies to prevent corruption. The French government has also decided to enact a new anti-corruption authority.

Companies must establish compliance systems that are designed to conform to the highest international anti-corruption standards to prevent and detect corruption in commercial transactions at both national and transnational levels.

The six principles are:

management commitment at the highest level of "zero tolerance";
ongoing risk assessments;
establishment of an anti-corruption compliance program (e.g., drafting of a written policy, designation of a compliance officer, and implementation of an internal whistle-blowing system);
domestic and external control mechanisms;
communication, training and monitoring of the anti-corruption compliance program
establishing a sanctions policy with appropriate disciplinary proceedings.

Dictate the compliance policies of French companies
The widespread bribery and corruption enforcement agency SCPC recommends that all organizations enact an effective system to prevent corruption, especially since foreign anti-corruption laws with extraterritorial reach are increasingly being adopted, and multilateral development banks are requiring ever-greater demonstrations of anti-corruption compliance in connection with the financing. However, these recommendations are not currently legally binding in France, and additional legislative action is required.

This new Anti-Corruption Agency Loi Sapin II (which would replace the current SCPC, which has no investigative power) would dictate the compliance policies of companies, impose administrative sanctions for corporate governance and compliance failings, and offer protection to whistleblowers.

We welcome France in the global community of enforcing zero tolerance and the new agency that would directly or indirectly act as a monitor for companies and sanction company to modifies its policy and behavior about corruption and bribery.