New French Anti-Bribery Law Expected in 2016
The French parliament will implement a new anti-bribery law, to increase transparency in the business sector. France has long been criticised by the Organisation for Economic Co-operation and Development (OECD) and other international oversight authorities for its cynical enforcement of anti-bribery laws.
No legal requirement to adopt control measures
France's Central Service for the Prevention of Corruption (Service Central de Prévention de la Corruption, or "SCPC"), was created in 1993, with a rather limited enforcement role. It has no investigative or prosecutorial powers and can only make recommendations on matters involving alleged corruption. Further even tough corruption is criminal offense, unlike the U.S. and the UK and other jurisdictions, there is no enforcement or legal requirement for businesses to adopt internal measures to prevent the crime.
Due to the absence of robust oversight and enforcement, the U.S. regulators have been active in this jurisdiction - as three of the top ten largest settlements under the Foreign Corrupt Practices Act (FCPA) belong to French companies (Alstom, Total SA, and Technip), and the US government has pocketed the severe fines.
Will adopt anti-corruption framework
The Loi Sapin II is part of a broader legislative package, addressing transparency in economic activities and will be deliberated in the National Assembly in early 2016. It is expected that like I h the UK some years ago much debate and discussion will take place before enactment of the new law.
The US Department of Justice investigations and sanctions of French companies, France has now shown its willingness to adopt its anti-corruption framework and agency, to prevent, detect and punish corruption. This new initiative should permit France to reclaim more autonomy in its enforcement procedures and efforts. It will also relieve the international pressure on the French authorities to comply with global corruption standards.
Design and implementation of compliance programs
The outcome of the new anti-corruption legislation, will require French companies to prepare for this new regime and avoid the unwanted bribery, fraud, and corruption enforcement scrutiny. The most critical area of focus will be the design and implementation of compliance programs. Later focus will be on how to monitor effectively, detect and remediate corruption in commercial transactions across the French companies.
The new law may take some of the tension from the US/FCPA by introducing the concept of monitorships, although the exact form o oversight is still unclear. In the U.S., compliance monitors are typically agreed to by both the company and the regulator. The compliance controls serve to verify that the company follows through on reforms to its compliance program after it has paid a penalty.
To be continued in the next newsletter;
OECD, Phase 3 Report on Implementing the OECD Anti-Bribery Convention in France (Oct. 2012), available at http://www.oecd.org/daf/anti-bribery/Francephase3reportEN.pdf.
OECD, France: Follow-up to the Phase 3 Report & Recommendations (Dec. 2014), available at http://www.oecd.org/daf/anti-bribery/France-Phase-3-Written-Follow-up-ENG.pdf.
Transparency International, Exporting Corruption-Progress Report 2015: Assessing Enforcement of the OECD Convention on Combatting Foreign Bribery (Aug. 2015), available at http://issuu.com/transparencyinternational/docs/